Boeing workers in North Charleston will share in an $886 million bonus pool the aerospace giant will carve up across the company this month as part of an annual incentive plan tied to financial performance.
This year's payout formula, outlined in internal documents, shows non-management, non-union workers are eligible for payouts ranging from 11.6 percent of their annual pay for "exemplary" performance to nothing for work that's considered "not effective."
The average bonus works out to 8.3 percent of annual pay. Employees will get their bonuses in their Feb. 21 checks while managers — who are on a different incentive plan — will get theirs in early March.
The Seattle Times was the first to report on this year's bonus pool.
A Boeing spokeswoman in North Charleston declined to comment on the incentive pay.
The bonuses follow a record financial year for Boeing, which reported revenues of $101.1 billion, free cash flow of $13.6 billion and $16.01 in core earnings per share. Boeing exceeded its targets in all three categories, which were part of the bonus formula.
"Our record financial performance in 2018 was driven by the commitment and focus of teams across Boeing, and the incentive award payouts for the year are a testament to that hard work," Greg Smith, Boeing's chief financial officer, was quoted as saying in a Boeing document.
"Ensuring that we deliver on our commitments to our customers throughout 2019 will be critical in ensuring we continue to meet our business goals and reward our team," Smith states in the document.
Despite Boeing's record financials, the bonus payout is less than last year.
The company calculates its bonus using a weighted average of operating performance against three key financial targets. That equaled 166 percent this year — a multiplier used in the bonus formula.
Last year, Boeing paid bonuses based on a multiplier equaling a record 187 percent. The drop this year, despite Boeing's record earnings, apparently is due to high targets set for the financial metrics.
Managers, through their separate plan, can receive bonuses much higher than rank-and-file workers — ranging from as much as 16.6 percent of pay for first-level management, 22.4 percent for second-level and 28.8 percent for third-level.
"We have a strong performance culture that rewards employees when we work together to meet and exceed aggressive goals," Heidi Capozzi, senior vice president of human resources, said in the Boeing document.
Union workers negotiate their own bonuses and how they are figured.
Seattle-area Boeing workers who are members of the International Association of Machinists, for example, will get a 5.6 percent bonus this year. Their counterparts in the Society of Professional Engineering Employees in Aerospace, or SPEEA, will receive bonuses of about 6.4 percent of annual salary.
Jon Holden, president of IAM District 751 in Washington state, said the union's bonus plan is more equitable because it is based on benchmarks workers help to decide and can't be influenced by subjective performance evaluations by a supervisor.
"We negotiated the metrics by which we would be measured," Holden said, adding this year's included safety, productivity and quality.
"It's important for our members to be able to understand how they can impact the bonus plan in their daily work," he said. "If you're not able to negotiate that, it becomes arbitrary. It becomes whatever the company wants it to be."
Boeing won't say how many workers are eligible for the bonuses, but the South Carolina workforce now stands at 7,341 workers, or 592 more than a year ago. Globally, Boeing employs more than 150,000.
Boeing recently said it will use a site-specific bonus plan for North Charleston workers in the coming year, rather than one plan that covers workers at all locations.