Boeing Brass Pocket Bonus Worth $2.8 Million

The five top executives at The Boeing Co. have become eligible for another $2.8 million in stock options for helping boost the value of Boeing’s stock.

The money is in addition to the $4.9 million in options the five became eligible to receive July 11, when the 20-day average price of Boeing stock closed above $64 a share.

On Wednesday, Boeing stock closed at $67.75 a share. That brought the average price for the previous 20 trading sessions to $67.28 - just above the $67 trigger for the new bonus.

In December 1993, Boeing’s board of directors offered Chairman and Chief Executive Frank Shrontz and President Phil Condit the incentives if they could raise the value of Boeing’s stock, then at about $40 a share.

The board established target prices of $64, $67 and $70 a share. When each target price was reached, Shrontz and Condit became eligible to buy Boeing stock at $40.5625 a share.

The incentives later were extended to Ron Woodard, president of Boeing Commercial Airplane Group; Jerry King, president of Boeing Defense & Space Group; and Boyd Givan, senior vice president and chief financial officer.

On July 11, Shrontz became vested in 100,000 shares. When the $67 threshold was reached last week, he became vested in 50,000 more. He will become vested in another 50,000 shares if Boeing stock averages above $70 a share for 20 days before December 1998.

Shrontz has not yet exercised any of the options. Had he cashed in Tuesday on every option to which he is entitled - 150,000 shares - his net return would have been nearly $4.2 million.

Condit’s incentive was 125,000 shares; he has been vested in 93,750. He has filed documents with the Securities and Exchange Commission indicating he recently exercised 10,000 of the options.

Peter Jacobs, an analyst with Ragen MacKenzie, said Boeing’s higher stock price has been due to aggressive, prudent management, the improving health of the airline industry and investor confidence in the company’s direction.