Analysis | The Boeing CEO's penchant for cost-cutting doesn't apply to his flights on the company's plane

(CNN) — When it comes to building airplanes, Boeing CEO Dave Calhoun is a proponent of streamlining costs. An accountant by training, Calhoun prioritized financial discipline during his four years at the helm of the company, tightening his belt to free up cash flow and put the company in a better financial position.

But when it comes to living the CEO lifestyle, that frugal nature disappears.

See here: Boeing said in a regulatory filing that four senior executives, including Calhoun, took an additional half-million dollars in personal private jet trips at company expense that had previously been incorrectly recorded as business travel, My colleague Chris Isidore writes.

This error was discovered in an internal review, prompted by A Wall Street Journal investigation The newspaper reported on Thursday that last year concerned the travel of Boeing executives on private planes.

To be clear: Boeing requires Calhoun, who will leave his position at the end of this year, to use his private jets for business and personal travel for safety reasons. This is very normal.

If you travel from the company's headquarters in Arlington, Virginia, to its manufacturing facility outside Seattle, the plane is a plus on the job. But when a CEO uses a company jet for a family vacation, that's usually considered taxable income.

The Internal Revenue Service is very strict about these matters, and recently announced that it will crack down on executives who illegally report personal trips as business expenses. There is no evidence that anyone at Boeing was doing this, but the campaign suggests that it happens regularly in corporate America.

Over the past three years, Calhoun has collected $979,000 from personal air travel, according to the company. Boeing did not comment beyond the information contained in the file.

Why it's important to Boeing

For all the talk about Boeing's disastrous start to 2024, we haven't had enough time to talk about the looming crisis: a potential strike by its largest union.

The 10-year contract covering 30,000 mechanics in the Seattle area expires on September 12. Negotiations began last month and were postponed to give the company some breathing room while it dealt with several federal investigations into the Jan. 5 fuselage plug explosion.

The mechanics want a 40% pay raise in three years and a position on the board of directors.

It would be extremely embarrassing for Boeing management to try to shortchange the people who make planes while showering Calhoun with nearly $33 million in compensation last year (up 45% from 2022). Among the questions are about the president’s movements between his two homes, neither of which are located near the company’s headquarters.

“With what is happening today, we are often the last line of defence, and we have to save this company from itself,” union president John Holden told the Financial Times last week.