Form 4: Boeing Director Stayce Harris Increases Stake Through Phantom Stock Award

Boeing Director Stayce D. Harris acquired 400.111 phantom stock units as part of her compensation, increasing her total beneficial ownership to 7,507.639 units.

Summary

• Stayce D. Harris, a Director of The Boeing Company (BA), acquired 400.111 phantom stock units.
• These units were awarded in lieu of director cash compensation.
• The phantom stock units are convertible into common stock on a 1-for-1 basis.
• Following this transaction, Ms. Harris beneficially owns a total of 7,507.639 phantom stock units.
• These units will be distributed as shares of common stock after her termination of services as a director, pursuant to The Deferred Compensation Plan for Directors of The Boeing Company.

Sentiment

Score: 7

Explanation: The document reflects a routine, positive corporate governance practice where director compensation aligns with shareholder interests through equity awards. There are no negative implications or risks disclosed.

Positives

• The acquisition of phantom stock units aligns the director's financial interests with those of the shareholders, as the value of the units is tied to the company's common stock performance.
• Utilizing phantom stock units as compensation is a common practice that can help retain experienced board members.

Future Outlook

Phantom stock units will be distributed as shares of common stock after the reporting person's termination of services as a director, in accordance with The Deferred Compensation Plan for Directors of The Boeing Company.

Management Comments

• Phantom stock units are convertible into common stock on a 1-for-1 basis.
• Phantom stock units awarded or acquired in lieu of director cash compensation.
• Pursuant to The Deferred Compensation Plan for Directors of The Boeing Company, phantom stock units are distributed as shares of common stock after the reporting person's termination of services as a director.

Industry Context

This transaction represents a standard practice in corporate governance where non-employee directors receive a portion of their compensation in equity-based awards, such as phantom stock units. This method is widely adopted across large publicly traded companies to align the interests of the board with long-term shareholder value.

Comparison to Industry Standards

• The use of phantom stock units as a form of director compensation is a common and accepted practice among S&P 500 companies, including major aerospace and defense firms like Lockheed Martin (LMT) and Northrop Grumman (NOC), which also utilize equity-based awards to compensate their non-executive directors.
• The 1-for-1 conversion to common stock is standard for such units, ensuring direct alignment with the underlying share price performance.
• The deferral of distribution until termination of service is also a typical feature of director deferred compensation plans, encouraging long-term commitment and stewardship.

Corporate Governance

Related Party Transactions

• The acquisition of phantom stock units by a director as compensation can be considered a related party transaction, though it is a standard and disclosed practice under the company's Deferred Compensation Plan for Directors.

Stakeholder Impact

• Shareholders: The compensation structure aligns the director's financial interests with shareholders, potentially encouraging decisions that enhance long-term stock value.
• Directors: Provides a form of deferred, equity-based compensation, which can be attractive for retaining experienced board members.

Next Steps

• Distribution of the phantom stock units as shares of common stock to Stayce D. Harris upon her termination of services as a director.

Key Dates

Keywords

Boeing, BA, SEC Form 4, Insider Transaction, Phantom Stock Units, Director Compensation, Equity Award, Deferred Compensation, Corporate Governance