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Boeing's $5,500 bonuses: windfall for region
Seattle Times business reporter
At 1:15 p.m. today, thousands of Boeing workers will be making a quick check of the company's stock price online before starting their holiday weekend.
If Boeing's stock ends the day near Thursday's closing price of $83 a share, employees will receive Boeing shares worth about $5,500, and the regional economy stands to get an infusion from the bonuses.
The windfall, worth hundreds of millions of dollars, will go to an estimated 191,000 full-time, part-time, current and retired employees companywide — 63,000 people in the Puget Sound region — who have worked at Boeing during the past four years. Workers who have been with the company for just a portion of that time will get smaller, pro-rated stock bonuses.
With that much money on the line, some employees have been eagerly waiting for the calendar to flip to June 30, when the payout calculation is made. Boeing recently stopped providing updates about the payout calculations because it didn't want daily figures to become too much of a distraction.
"This is definitely the topic of conversation around work the last couple of months," said Bob Wilkerson, a 737 manufacturing engineer and treasurer for the Society of Professional Engineering Employees in Aerospace. "Most people are talking about how they're going to cash it out and spend it."
Wilkerson said he plans to hold the stock "and let it ride."
Boeing established the stock bonus program in 1996. It was designed to reward workers every two years if the company's stock price rose more than 3 percent a year. Two years ago, employees received their first bonus. In 2004, a worker with four years of service received 17 shares worth nearly $900.
Bonuses are bigger this time under the program's formula because Boeing stock has soared 37 percent in the past year.
Wall Street has bid up Boeing's stock partly because of the company's ability to land orders for its next-generation 787 plane, and the perception it can take advantage of stumbles by rival jet maker Airbus.
Boeing spokesman Todd Blecher said the company needs to do final calculations based on the average of today's high and low stock price. Employees should receive their bonus by mail in early August. He said the company is looking forward to rewarding employees because "they earned this with their performance."
Bret Bertolin, a senior economic forecaster for Washington state, said the bonuses will have more significance to the local economy than when Microsoft paid out its $3-per-share special dividend in November 2004.
The reason, he said, is that the vast majority of the dividend went to big shareholders like Bill Gates, Paul Allen and Steve Ballmer, rather than to rank-and-file workers. Gates gave his $3 billion windfall to his foundation, which spends its money around the world.
Even so, Bertolin doesn't expect the checks to lead to a big boon in state tax revenue. Even with the rosiest of estimates, he said, it could generate only $20 million of tax revenue, relatively small change for a state that expects to collect $28.9 billion in tax revenue in the current two-year budget cycle. Most of the windfall is expected to be spent in retail.
The bonus represents 6.8 percent of the $5.1 billion payroll for the aircraft-manufacturing industry in Washington state in 2005.
Boeing's executives do not participate in this stock-bonus program, but they have reaped much bigger rewards for the company's rising stock performance. Boeing Commercial Airplanes Chief Executive Alan Mulally received stock bonuses worth a total of $6.7 million this year through mid-April. Former chief executive Phil Condit received at least $9.1 million worth of stock through the same period, and another former chief executive, Harry Stonecipher, received at least $8.6 million worth of stock.
Mark Blondin, president of the Machinists union District 751, said some workers have been skeptical of the stock-bonus plan because it didn't pay off for them for so long, and when it did two years ago, it produced relatively small sums. This time, he said, members are enthusiastic about the stock's performance and the rewards they stand to gain.
"It's a testament to the hard work and productivity of all Boeing employees," Blondin said. "They've worked hard to make the company successful through the downturns and this upswing."
Luke Timmerman: 206-515-5644 or firstname.lastname@example.org
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