Boeing Co. (BA) - Get Report said Wednesday it will freeze all merit-based salary increases as CEO Dave Calhoun warned that a broader recovery for the world's biggest planemaker could be at least three years away.
Executives, managers and most of the group's employees won't receive merit-based pay increases next year, Boeing said, but will instead be given a one-time award of restricted stock unites that will vest on December 14, 2023.
"As we begin to mobilize in support of the deployment of a vaccine, it may be three more years until we achieve a full recovery," Calhoun said in a memo to employees. "The next chapter of our history will be built on a culture of excellence anchored by shared accountability and ownership - and these grants will support our shared goal of taking care of our business.
"I know we will emerge from this a better company, one that is recognized for safety, transparency and quality," he added.
Boeing shares were marked 0.75% lower in late morning trading Wednesday to change hands at $227.80 each.
Boeing posted a narrowed-than-expected third quarter loss in late October and unveiled further job cuts amid its ongoing struggle to adapt to changes in the global aviation market brought by the coronavirus pandemic.
Boeing posted a loss of $754 million for the three months ending in September, as revenues fell nearly 30% to $14.1 billion. Commercial airplane revenues fell 56.4% to $3.6 billion, Boeing said, while defense, space and security revenues slumped to $6.8 billion.
Boeing told investors that it has around 3,400 737 aircraft in backlog -- as well as 450 already built and stored in inventory -- and doesn't expect to increase production rates beyond 31 new planes in 2022 as it continues to assess demand in the wake of travel restrictions triggered by the pandemic.
The unprecedented spread of the virus, however, has hit Boeing hard, prompting the planemaker to increase its target for staff reductions last month hat will take its overall headcount to under 130,000 by the end of next year.