Make Passengers Safer? Boeing Just Made Shareholders Richer.

Our research, based on publicly available information, strongly suggests that the dedication of Boeing’s senior executives to increasing their company’s profits and stock yield—which also augmented their own compensation—resulted in management decisions that contributed to the two 737 MAX crashes. While much more information remains to be discovered, the reported evidence, still unfolding almost daily, points to executive culpability in the crashes that took the lives of 346 passengers and crew….From the first quarter of 2013 through the first quarter of 2019, Boeing paid out $17.4 billion in dividends, which represented 42 percent of its profits during that period, making it a “true dividend rockstar.” Boeing’s senior executives also spent an additional $43.1 billion on buybacks, carried out as open-market repurchases, equal to a further 104 percent of profits. Boeing had stopped doing buybacks during the financial crisis in 2009 and began again with $2.8 billion in 2013, which it increased to $6.0 billion in 2014 as it began milking its 737 MAX cash cow, extracting not only all of its current profits but also deposits on future deliveries. With buybacks escalating among large U.S. corporations generally, Boeing competed to boost its stock price with $6.8 billion in buybacks in 2015, $7.0 billion in 2016, $9.2 billion in 2017, and $9.0 billion in 2018 (see Figure 1)….Did Boeing’s top management in effect allocate the corporate cash that could have been used to put a clean-sheet replacement in the air to propping up the company’s stock price instead? Why the clean-sheet replacement for the 737NG was a flight path not taken must be a subject for further investigation.

Source: Make Passengers Safer? Boeing Just Made Shareholders Richer.

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