The Boeing Company

2018 ANNUAL MEETING

OF SHAREHOLDERS

Monday, April 30, 2018

9:00 a.m., Central Time

The Field Museum

1400 South Lake Shore Drive

Chicago, Illinois

Notice of 2018 Annual Meeting of Shareholders

March 16, 2018

Dear Fellow Shareholder,

You are cordially invited to attend The Boeing Company’s 2018 Annual Meeting of Shareholders to be held on Monday, April 30, 2018, at 9:00 a.m., Central Time, at The Field Museum, 1400 South Lake Shore Drive, Chicago, Illinois. At the meeting, shareholders will be asked to:

The meeting will also include a report on our operations. Shareholders of record at the close of business on March 1, 2018 are entitled to vote at the annual meeting and any postponement or adjournment thereof. Your vote is important. Please vote by internet, telephone, or mail as soon as possible to ensure your vote is recorded promptly. Please also note that, if you wish to attend the meeting, you must request an admission ticket in advance. To obtain an admission ticket, please follow the instructions on page 57 of the proxy statement.

Thank you for your ongoing support of The Boeing Company.

Very truly yours,

Dennis A. Muilenburg

Chairman, President and Chief Executive Officer

Grant M. Dixton

Vice President, Deputy General Counsel and Corporate Secretary

REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
		VIA THE INTERNET Visit www.proxyvote.com				BY MAIL Sign, date, and return your proxy card or voting instruction form
		BY TELEPHONE Call the telephone number on your proxy card, voting instruction form or notice				IN PERSON Attend the annual meeting in Chicago See page 57 for details regarding how to register in advance and obtain an admission ticket

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on April 30, 2018: This Notice of Annual Meeting and Proxy Statement and the 2017 Annual Report are available at www.proxyvote.com.

This proxy statement is issued in connection with the solicitation of proxies by the Board of Directors of The Boeing Company for use at the 2018 Annual Meeting of Shareholders and at any adjournment or postponement thereof. On or about March 16, 2018, we will begin distributing print or electronic materials regarding the annual meeting to each shareholder entitled to vote at the meeting. Shares represented by a properly executed proxy will be voted in accordance with instructions provided by the shareholder.

Table of Contents

PROXY SUMMARY

This summary sets forth certain performance highlights, as well as information contained elsewhere in this proxy statement. You should read the entire proxy statement before casting your vote.

Performance Highlights

Total Shareholder Return vs. Dow Jones Industrial Average/Peer Company Average

Annual Meeting of Shareholders

		You may vote at the meeting if you were a holder of record of our common stock at the close of business on March 1, 2018. Please see page 58 for instructions on how to vote your shares. To attend the meeting in person, you must register no later than April 20, 2018 to obtain an admission ticket. You must present an admission ticket, along with government-issued photo identification, in order to attend the meeting. See page 57 for additional instructions.

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PROXY SUMMARY

Voting Recommendations of the Board

Item		Description		For		Against		Page
1		Election of directors							4
2		Approve, on an advisory basis, named executive officer compensation							22
3		Ratify the appointment of independent auditor							47
4		Shareholder proposal – additional report on lobbying activities							51
5		Shareholder proposal – reduce threshold to call special shareholder meetings from 25% to 10%							53
6		Shareholder proposal – independent Board Chairman							54
7		Shareholder proposal – require shareholder approval to increase the size of the Board to more than 14							56

Director Nominees

This year’s Board nominees include one new director — Caroline Kennedy, former U.S. Ambassador to Japan. Three of our independent directors joined the Board in the last three years, reflecting our ongoing Board refreshment strategy and further strengthening and diversifying the skills and experiences of the Board. Each director nominee is listed below, and you can find additional information under “Election of Directors (Item 1)” beginning on page 4.

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PROXY SUMMARY

Key Features of Our Executive Compensation Program

Governance Highlights

Shareholder Outreach

We meet with many of our shareholders throughout the year to ensure that management and the Board are focused on, and responsive to, investor priorities and concerns. For additional information, see “Shareholder Outreach” on page 13.

Environmental Stewardship and Global Engagement

Boeing’s commitment to innovation extends to how we care for our environment and engage with the communities in which we operate. See “Environmental Stewardship and Global Engagement” on page 17 for additional information.

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ELECTION OF DIRECTORS (ITEM 1)

PROPOSAL SUMMARY

Shareholders are being asked to elect the 13 director nominees under “Director Nominees” beginning on page 5 to serve until the 2019 Annual Meeting of Shareholders.

		The Board recommends that you vote FOR each of the 13 director nominees.

Board Composition and Engagement

										Active Engagement   •    Significant involvement in strategy development   •    Regular executive sessions of independent directors   •    Multiple Boeing production site visits each year   •    Strong Board and committee meeting attendance   •    Extensive role in succession planning, including in-depth meetings between individual directors and senior executives at Boeing locations   •    Comprehensive oversight of strategic, operational, and compliance risks
		12 of 13 Independent

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ELECTION OF DIRECTORS (ITEM 1)

Director Skills and Qualification Criteria

The Governance, Organization and Nominating Committee, or the GON Committee, is responsible for identifying and assessing potential candidates and recommending nominees for the Board’s approval. The GON Committee assesses the qualifications of incumbent directors and other candidates for nomination on an ongoing basis, including with respect to the following key factors:

Director Nominees

Set forth below are the ages, principal occupations, directorships within the past five years, and other details about each nominee. Ambassador Kennedy, who joined the Board in 2017, was referred to the GON Committee by another independent director.

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ELECTION OF DIRECTORS (ITEM 1)

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ELECTION OF DIRECTORS (ITEM 1)

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ELECTION OF DIRECTORS (ITEM 1)

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ELECTION OF DIRECTORS (ITEM 1)

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ELECTION OF DIRECTORS (ITEM 1)

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ELECTION OF DIRECTORS (ITEM 1)

				THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE NOMINEES.

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CORPORATE GOVERNANCE

Our corporate governance materials, including our Corporate Governance Principles, the charters of each of the Board’s standing committees, our Director Independence Standards, and our codes of conduct for directors, finance employees, and all employees, may be viewed on our website at www.boeing.com/company/general-info/corporate-governance.page. The GON Committee regularly reviews our governance practices and policies and proposes appropriate modifications for adoption by the Board.

Director Independence

Board Independence

Our Corporate Governance Principles require that at least 75% of the Board satisfy the New York Stock Exchange, or NYSE, criteria for independence. For a director to be considered independent, the Board must determine, after consideration of all relevant facts and circumstances, that he or she has no material relationship with us other than as a director, either directly or as a partner, shareholder, or executive officer of another entity that has a relationship with Boeing. In addition, the Board has adopted Director Independence Standards to assist the Board in its assessment of director independence. These standards are designed to supplement the requirements of the NYSE listing standards. If a director or nominee has a relationship with Boeing that is not addressed in the Director Independence Standards, the members of the Board who have already been determined to be independent shall consider all relevant facts and circumstances and determine whether the relationship is material.

The Board has reviewed all direct and indirect relationships between Boeing and each of our directors, and has determined that all of our director nominees, other than Mr. Muilenburg, are independent. Accordingly, independent directors constitute more than 92% of our current Board. The Board made the same determination with respect to Randall L. Stephenson, who served on the Board until December 2017. In January 2009, Nortel Networks Corporation, for which Mr. Zafirovski served until August 2009 as Director, President and Chief Executive Officer, and subsidiary companies filed for bankruptcy. The Board has concluded that these events do not impair Mr. Zafirovski’s ability to continue to serve as an independent director.

Committee Independence

The Corporate Governance Principles require that all members of the Audit, GON, and Compensation Committees be independent, both under the Director Independence Standards and pursuant to any regulatory requirements. The Board has determined that all members of these committees satisfy all applicable independence requirements.

Leadership Structure

The GON Committee annually evaluates whether the Board’s leadership structure is appropriate to effectively address the unique needs of our business and the long-term interests of our shareholders, and makes recommendations to the Board concerning the Board’s leadership structure, including whether the roles of Chairman and CEO should be separated or combined. The Board, in accordance with our By-Laws, elects a Chairman from among the directors. The Board believes it is in the best interests of the Company and its shareholders for the Board to determine which director is best qualified to serve as Chairman in light of the circumstances at the time, rather than based on a fixed policy. As a result, the roles of Chairman and CEO have been split from time to time, while at other times the roles have been combined. In the event that the Chairman is not an independent director, our Corporate Governance Principles require that an independent Lead Director be elected on an annual basis by a majority of the independent directors following a recommendation from the GON Committee.

The formal duties of the independent Lead Director are as follows:

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CORPORATE GOVERNANCE

Kenneth Duberstein, our independent Lead Director, performs the following additional duties:

Finally, the independent Lead Director also is responsible for performing any additional duties as the other independent directors may request—whether related to succession planning leadership (with respect to CEO succession and developing second- and third-level leaders), regularly scheduled meetings with the CEO, risk oversight, meeting with investors, or long-term enterprise strategy. Effective upon his re-election to the Board at this year’s Annual Meeting of Shareholders, David Calhoun will serve as the Board’s independent Lead Director. The Board’s independent directors have determined that Mr. Calhoun is uniquely positioned to serve the Company in this role, in light of his prior demonstrated performance as a director and chair of the GON Committee, his extensive experience in senior business leadership, and his reputation for independence and integrity. In addition to Mr. Calhoun’s formal responsibilities as independent Lead Director, we expect Mr. Calhoun to continue to perform the additional duties set forth above.

The Board has determined that Dennis Muilenburg, our President and CEO, should also serve as Chairman of the Board at this time. Over his 32-year career at Boeing, Mr. Muilenburg has developed extensive knowledge of, and unrivaled experience in, Boeing and the aerospace industry. In addition, Mr. Muilenburg has demonstrated exceptional leadership abilities, unquestioned integrity, and the strategic vision necessary to create sustainable long-term value for our shareholders in an increasingly competitive marketplace. Meanwhile, our Board continues to include 12 independent directors, who collectively bring vast senior government and business leadership experience, aerospace expertise, and other critical skills, and each of whom individually has demonstrated the willingness to think and act independently on behalf of shareholders. Based on this combination of Mr. Calhoun’s demonstrated independent leadership; Mr. Muilenburg’s knowledge, experience, leadership, and integrity; and the independence, experience, and integrity of our other independent directors, the Board believes that the Board’s current leadership structure is in the best interests of our shareholders.

Shareholder Outreach

Boeing has long believed that the continued delivery of sustainable, long-term value to our shareholders requires regular dialogue with our shareholders. As a result, our management team participates in numerous investor meetings to discuss our business, strategy, and financial results each year. These meetings include in-person, telephone, and webcast engagements, as well as investor conferences and tours of certain Boeing facilities. In addition, during 2017, we discussed governance, executive compensation, and many other issues with shareholders representing approximately 40% of our outstanding shares. We believe these meetings ensure that management and the Board are aware of our shareholders’ priorities and equipped to address them effectively. The Board considers feedback from these conversations during its deliberations. Indeed, feedback from shareholders has been incorporated in recent Board discussions on a variety of topics, including shareholder proposals, executive compensation, board refreshment, and proxy disclosures, often resulting in changes to our policies and practices.

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CORPORATE GOVERNANCE

Board Committees

The Board has five standing committees, each of which operates under a charter that has been approved by the Board. The Chair of each committee reviews and discusses the agendas and materials for meetings with senior management in advance of distribution to the other committee members, and reports to the Board on actions taken at each committee meeting. The Board also has established a Stock Plan Committee, to which the Compensation Committee has delegated the authority to approve certain limited stock issuances to employees other than executive officers. The table below sets forth the current membership of each of the standing committees, the independence of each director, and the number of meetings each committee held in 2017.

Chair		Audit Committee Financial Expert		Member

Audit Committee

The Audit Committee oversees our independent auditor and accounting and internal control matters. Its principal responsibilities include oversight of:

At each meeting, representatives of Deloitte & Touche LLP, our independent registered public accounting firm, are present to review accounting, control, auditing, and financial reporting matters. In addition, during certain meetings, the Audit Committee meets in executive session with our Chief Financial Officer, General Counsel, Senior Vice President, Office of Internal Governance and Administration, Vice President, Corporate Audit, and representatives of Deloitte & Touche LLP. The Audit Committee also oversees key risks on behalf of the Board; those particular responsibilities are set forth under “Risk Oversight” on page 16. The Audit Committee also prepares the Audit Committee Report included on page 48. The Audit Committee is composed entirely of directors who satisfy NYSE director independence standards and our Director Independence Standards, as well as additional independence standards applicable to audit

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CORPORATE GOVERNANCE

committee members established pursuant to applicable law. The Board has determined that each Audit Committee member is financially literate as defined by NYSE listing standards, and that Ms. Good and Messrs. Bradway, Kellner, and Williams are audit committee financial experts as defined by the rules of the Securities and Exchange Commission, or SEC.

Compensation Committee

The Compensation Committee oversees our executive and equity compensation programs. The Compensation Committee is composed entirely of directors who satisfy NYSE director independence standards and our Director Independence Standards, as well as additional independence standards applicable to compensation committee members established pursuant to applicable law. Additional information about the Compensation Committee, including a more detailed list of its principal responsibilities, is set forth under Compensation Discussion and Analysis, which begins on page 23. In addition, certain of the Compensation Committee’s risk oversight responsibilities are set forth under “Risk Oversight” on page 16.

Finance Committee

The Finance Committee’s principal responsibilities include reviewing and, where appropriate, making recommendations to the Board with respect to:

In addition, the Finance Committee has key risk oversight responsibilities that are described under “Risk Oversight” on page 16. The Finance Committee is composed entirely of directors who satisfy NYSE director independence standards and our Director Independence Standards.

Governance, Organization and Nominating Committee

The GON Committee’s principal responsibilities include:

The GON Committee also oversees key risks on behalf of the Board, which are set forth below under “Risk Oversight” on page 16. From time to time, the GON Committee works with a third-party search firm to identify potential candidates to serve on the Board. The GON Committee is composed entirely of directors who satisfy NYSE director independence standards and our Director Independence Standards.

Special Programs Committee

The Special Programs Committee reviews Boeing’s work on classified U.S. government programs.

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CORPORATE GOVERNANCE

Risk Oversight

We believe taking calculated risks is a critical element of Boeing’s commitment to its customers and shareholders, as well as its mandate to be an enduring global industrial champion. However, we believe avoiding imprudent risks and mitigating the many strategic, technological, operational, and compliance risks we face every day is equally critical to Boeing’s long-term success. Senior management is responsible for day-to-day management of risk, including the creation of appropriate risk management policies and procedures. The Board is responsible for overseeing management in the execution of its risk management responsibilities and for assessing the Company’s approach to risk management. The Board regularly assesses significant risks to the Company in the course of reviews of corporate strategy and the development of our long-range business plan, including significant new development programs.

As part of its responsibilities, the Board and its standing committees also regularly review strategic, operational, financial, compensation, and compliance risks with senior management. Examples of risk oversight activities conducted by the Board’s Committees, subject to Committee report-outs and full discussion at the Board level, are set forth below.

Audit Committee Risk Oversight

GON Committee Risk Oversight

Finance Committee Risk Oversight

Compensation Committee Risk Oversight

For more information on oversight of risks related to our compensation practices, see “Compensation and Risk” on page 36.

Additional information about the Board’s responsibilities related to the management of risk is set forth in our Corporate Governance Principles.

Director Retirement Policy

Our Corporate Governance Principles generally require that no director may serve if he or she would be 74 years of age or older at the time of election. In February 2018, the GON Committee recommended and the Board unanimously approved a one-time waiver of this policy in order to nominate Mr. Duberstein to the Board for an additional one-year term. In reaching its decision, the Board considered Mr. Duberstein’s skills and experience, which are described on page 7, and that his continued service would facilitate a smooth transition in the independent leadership of the Board. Following the 2018 Annual Meeting of Shareholders, Mr. Duberstein will cease to serve as independent Lead Director. For additional information of the Board leadership structure, see “Leadership Structure” beginning on page 12.

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CORPORATE GOVERNANCE

Board Self-Evaluation

The Board and its standing committees perform thorough self-evaluations each year. These self-evaluations are overseen by the GON Committee and are designed to ensure that the Board functions effectively and identifies areas of potential improvement. In 2017, these self-evaluations included the distribution of questionnaires to each director, wide-ranging Board and committee discussions in executive session led by the independent Lead Director or relevant committee chair, and opportunities for discussions between individual directors and the Corporate Secretary, the independent Lead Director, and/or any relevant committee chair. Topics covered by these self-evaluations included:

Following these self-evaluations, the independent Lead Director and/or GON Committee chair discusses areas for potential improvement with the Board and/or relevant committees and, if necessary, identifies steps required to implement these improvements. The Board has made several changes to how it operates based on the results of recent self-evaluations, including additional opportunities for one-on-one director interaction with senior management succession candidates, enhanced director orientation procedures, and increased frequency of reviews of key risks such as cybersecurity.

Environmental Stewardship and Global Engagement

Environmental Stewardship

Boeing’s commitment to innovation means more than just game-changing aerospace products and services. We extend that commitment to how we take care of the environment and engage with the communities in which we operate as well as the processes that govern our environmental strategy and policy. Boeing is pursuing innovation and leadership that will build a brighter, more sustainable future for our employees, customers, industry, and communities. Our strategy and actions reflect goals and priorities that address the most critical environmental challenges facing our company, customers, and industry. For a link to our 2017 Environment Report and additional information on the great progress we have made at improving the environmental performance of our products and services, as well as our operations, visit www.boeing.com/principles/environment.

Boeing Global Engagement

Through purposeful community investments, employee engagement, and thoughtful advocacy efforts, Boeing and its employees support innovative partnerships and programs that align with our strategic objectives, create value, and help build better communities. Our holistic approach to charitable giving includes not only monetary resources, but also investments of time and talent to support our military and veteran communities, improve access to globally competitive learning and skills development, and create and sustain dynamic communities. For additional information, including a link to our 2017 Global Engagement Portfolio, visit www.boeing.com/principles/global-engagement-summary.page.

Meeting Attendance

During 2017, the Board held seven meetings. Each director nominee attended at least 90% of the meetings of the Board and the committees on which he or she served during 2017, and average attendance at these meetings exceeded 97%. Absent extenuating circumstances, directors are required to attend our annual meetings of shareholders, and all then-serving directors attended our 2017 Annual Meeting.

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CORPORATE GOVERNANCE

Communication with the Board

The Board has established a process whereby shareholders and other interested parties can send communications to our independent Lead Director, to the nonemployee directors as a group or to the Audit Committee. This process is described at www.boeing.com/company/general-info/corporate-governance.page.

Codes of Conduct

The Board expects directors, officers and employees to act ethically, including by adhering to all applicable codes of conduct, at all times. Shareholders may view Boeing’s codes of conduct at www.boeing.com/company/general-info/corporate-governance.page. Waivers with respect to these codes for directors and officers may be granted only by the Board, and any such waiver must be promptly disclosed on our website. No waivers were requested during 2017. Directors are required to promptly inform the Chairman of the Board or the Chair of the GON Committee of any actual or potential conflicts of interest and to recuse themselves from any discussion or decision affecting their personal, business or professional interests.

Compensation of Directors

We have designed our nonemployee director compensation program to achieve the following objectives:

The GON Committee reviews Boeing’s director compensation program on an annual basis. When making its recommendations, the GON Committee considers director compensation levels at the same group of companies used to benchmark the named executive officers’ compensation. See “Benchmarking Against Our Peer Group” on page 33 for more information. Compensation Advisory Partners LLC, or CAP, served during 2017 as the GON Committee’s independent consultant with respect to the compensation of our directors. Independent directors may not receive, directly or indirectly, any consulting, advisory or other compensatory fees from us.

Our nonemployee director compensation program consists of cash (board, committee chair and lead director retainer fees) and retainer stock units. In addition, we match director contributions to eligible non-profit organizations, up to a maximum match of $31,000 per year. We also reimburse directors for travel and other out-of-pocket expenses incurred in connection with their services, if any. Directors who are Boeing employees do not participate in the nonemployee director compensation program.

2017 Director Compensation Table

The following table sets forth 2017 compensation for each nonemployee director.

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CORPORATE GOVERNANCE

Cash Retainers

In 2017, nonemployee directors received an annual cash retainer fee of $135,000. We also pay the following additional annual retainer fees to directors serving in leadership positions: Lead Director $30,000, Audit Committee Chair $25,000, Compensation and GON Committee Chairs $20,000, and Finance Committee Chair $15,000.

Our Deferred Compensation Plan for Directors gives nonemployee directors the opportunity to defer all or part of their cash compensation into a stock unit account as deferred stock units or an interest-bearing, cash-based account. Directors do not have the right to vote or transfer deferred stock units. Deferred stock units earn dividend equivalents, which are credited as additional deferred stock units, and will be distributed as shares of Boeing stock. Directors may elect to receive the distribution in a lump sum or in annual payments over a maximum of 15 years beginning no earlier than the January following the year of the director’s termination of Board service. Directors elected to defer 2017 cash compensation into deferred stock units as follows: $135,000 for 710 units each for Messrs. Bradway, Stephenson, and Zafirovski; Mr. Calhoun, $148,342 for 771 units; Mr. Collins, $155,000 for 815 units; and Mr. Williams, $145,007 for 756 units. Ambassador Schwab elected to defer $135,000 of her 2017 cash compensation into an interest-bearing, cash-based account.

Retainer Stock Units

In 2017, our nonemployee directors received equity compensation valued at $180,000 per year in the form of retainer stock units, which are distributed as shares of Boeing stock after termination of Board service. The Board believes that retainer stock units further align directors’ interests with the long-term interests of our shareholders. Each nonemployee director received an aggregate of 946 retainer stock units during 2017, except for (1) Mr. Bradway, who

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CORPORATE GOVERNANCE

received an additional 228 units earned for service during the fourth quarter of 2016; and (2) Ambassador Kennedy, who received 277 retainer stock units representing units earned for service beginning August 2017. Directors do not have the right to vote or transfer retainer stock units. Retainer stock units earn dividend equivalents, which are credited as additional retainer stock units. Directors may elect to receive the distribution of shares in respect of these units in a lump sum or in annual payments over a maximum of 15 years beginning no earlier than the January following the year of the director’s termination of Board service.

Director Stock Ownership Requirements

To further align the interests of directors with the long-term interests of our shareholders, our Corporate Governance Principles require each nonemployee director with more than three years of Board service to own stock or stock equivalents with a value of at least three times the annual cash retainer fee, and directors with more than six years of Board service to own stock or stock equivalents with a value of at least five times the annual cash retainer fee. The GON Committee annually reviews whether each nonemployee director has met the applicable requirement, and makes recommendations as appropriate. Each director currently exceeds his or her applicable stock ownership requirement.

Compensation Consultants

The Compensation Committee and GON Committee engaged CAP to serve as their independent compensation consultant during 2017. In this capacity, CAP advised on peer group pay practices and other relevant benchmarks with respect to chief executive officer and nonemployee director compensation to the Compensation Committee and the GON Committee, respectively, as well as regulatory developments and compensation trends. In addition, CAP advised the Compensation Committee concerning management’s compensation data and recommendations. In connection with performing this role, CAP took direction from the Compensation and GON Committees, as appropriate, reported directly to the committees, and did not provide any other services to Boeing. See discussion on page 32 under “Governance of Pay-Setting Process.” The Compensation Committee assessed the independence of CAP pursuant to SEC and NYSE rules and determined that no conflict of interest exists that would prevent CAP from independently representing the Compensation and GON Committees. In making this assessment, the Compensation Committee considered each of the factors set forth by the SEC and the NYSE with respect to the compensation consultant’s independence, including that CAP provided no services for Boeing other than pursuant to its engagement by the Compensation and GON Committees. The Compensation Committee also determined there were no other factors the Committee should consider in connection with the assessment or that were otherwise relevant to the Committee’s engagement of CAP.

Related-Person Transactions

Some of our directors, executive officers, greater than 5% shareholders, and their immediate family members may be directors, officers, partners, employees, or shareholders of entities with which we do business in the ordinary course. We carry out transactions with these firms on customary terms, and, in many instances, our directors and executive officers may not have knowledge of them.

Policies and Procedures

We regularly review transactions with related persons, including sales, purchases, transfers of realty and personal property, services received or furnished, use of property and equipment by lease or otherwise, borrowings and lendings, guarantees, filings of consolidated tax returns, and employment arrangements. Under our policies and procedures, related persons include our executive officers, directors, director nominees and holders of more than 5% of our stock, as well as their immediate family members. Any findings are furnished to the Vice President, Accounting and Financial Reporting, who reviews potential related-person transactions for materiality and evaluates the need for disclosure under SEC rules.

In addition, the GON Committee assesses possible conflicts of interest of directors and executive officers, and considers for review and approval or ratification any transaction or proposed transaction required to be disclosed under SEC rules in which Boeing is or is to be a participant and the amount involved exceeds $120,000, and in which a director, director nominee, executive officer, or an immediate family member of such persons has or will have an interest.

Executive officers are also subject to our policies and procedures applicable to all employees, which require them to disclose potential conflicts of interest and us to conduct reviews and make determinations with respect to specified transactions. Our Vice President, Ethics and Business Conduct, oversees these reviews and determinations, and refers to the GON Committee for review and approval or ratification possible conflicts of interest involving executive officers.

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CORPORATE GOVERNANCE

The factors considered in making the determination include the executive officer’s duties and responsibilities and, if the transaction includes another company, (1) the company or business involved in the transaction, including the product lines and market of the company or business, (2) the relationship between us and the other company or business, if any (for example, if the other company is one of our suppliers, customers or competitors), and (3) the relationship between the executive officer or his or her immediate family and the other company or business (for example, owner, co-owner, employee or representative).

Directors are required to disclose to the Chairman of the Board or the Chair of the GON Committee any situation that involves, or may reasonably be expected to involve, a conflict of interest with us, including:

Directors must recuse themselves from any discussion or decision affecting their personal, business, or professional interests. Finally, pursuant to our Corporate Governance Principles, we may not, directly or indirectly, extend or maintain credit or arrange for or renew an extension of credit in the form of a personal loan to or for any director or executive officer.

Certain Transactions

The following transactions were reviewed and considered in light of the policies and procedures discussed above:

BlackRock, Inc., or BlackRock, is a beneficial holder of more than 5% of our outstanding common stock according to Amendment No. 1 to a Schedule 13G filed by BlackRock with the SEC on February 8, 2018. BlackRock provided investment management services and analytics to the Retirement Plans Trust and the Savings Plans Trust, and received approximately $11.0 million for such services in 2017.

Newport Trust Company, or Newport, successor to the special fiduciary services business of Evercore Trust Company, National Association, is a beneficial holder of more than 5% of our outstanding common stock according to a Schedule 13G filed by Newport with the SEC on February 13, 2018. Newport is the investment manager for shares of our common stock held by the Savings Plans Trust and is entitled to an annual fee based on the market value of our common stock in the Savings Plans Trust. In 2017, these fees totaled approximately $1.2 million. In August 2017, the Retirement Plans Trust engaged Evercore to serve as investment manager and paid fees of approximately $650,000 for services during 2017.

The Vanguard Group, or Vanguard, is a beneficial holder of more than 5% of our outstanding common stock according to Amendment No. 3 to a Schedule 13G filed by Vanguard with the SEC on February 8, 2018. Vanguard received an aggregate of approximately $348,000 for management fees in 2017 from certain of our subsidiary retirement plans and a trust that funds a portion of our health and welfare plans.

From time to time, we may enter into customary relationships and/or purchase services in the ordinary course of business from one or more of the financial institutions named above and/or their respective affiliates.

Steven Caret has been employed by us since 2004, and is the husband of Leanne Caret, who became an executive officer in 2016. His compensation was established in accordance with our employment and compensation practices applicable to employees with equivalent qualifications, experience and responsibilities. Mr. Caret’s 2017 compensation was approximately $231,000. He is also eligible to participate in our employee benefit programs on the same basis as other eligible employees.

Philip Musser was hired by Boeing as Senior Vice President, Communications on September 25, 2017. Prior to joining Boeing, Mr. Musser served as Chairman and CEO of IMGE, a digital firm, and President of New Frontier Strategy, a strategic communication and public relations firm. Boeing had engaged both IMGE and New Frontier Strategy before hiring Mr. Musser, and paid IMGE approximately $1.1 million for online media campaigns, digital strategy consulting, and the placement of advertisements during 2017. Boeing also retained New Frontier Strategy and paid approximately $219,000 for various consulting services during 2017.

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APPROVE, ON AN ADVISORY BASIS, NAMED

EXECUTIVE OFFICER COMPENSATION (ITEM 2)

PROPOSAL SUMMARY

Shareholders are being asked to approve, on an advisory basis, the compensation of the named executive officers as set forth under the heading “Compensation Discussion and Analysis.”

		The Board recommends that you vote FOR the resolution approving named executive officer compensation.

2017 was a very strong year for Boeing, with record operating earnings, earnings per share, operating cash flow, and commercial aircraft deliveries. Our shareholders shared in this success, as evidenced by our Dow Jones Industrial Average-leading total shareholder returns during 2015-2017 (147.3%) and 2013-2017 (345.3%). Our executive compensation program is designed to reward strong performance, attract and retain superior leaders, and align our executives’ interests with the long-term interests of our shareholders. Our Compensation Discussion and Analysis describes our executive compensation program in detail, highlights of which include the following:

Pay for Performance

Alignment with Shareholder Interests

Responsible Pay Practices

We believe that our executive compensation program plays a key role in driving Boeing’s long-term performance, as evidenced by Boeing’s recent strong financial and operating results. In future years, we expect to continue to reward executives who deliver strong results by tying compensation to demonstrated individual and Company performance.

In 2017, our shareholders approved the compensation of our named executive officers with a FOR vote of 95%. This year, we once again request your vote supporting the following nonbinding resolution:

RESOLVED: That the compensation paid to the named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.

				THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

Principal Components of Named Executive Officer Compensation

Performance Measures Driving 2017 Compensation

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COMPENSATION DISCUSSION AND ANALYSIS

Opportunities for Shareholder Feedback

The Board and the Compensation Committee continue to encourage shareholder feedback, and executive compensation remains a key focus area in our year-round discussions with shareholders. In those discussions, investors told us that Boeing’s pay practices and pay-for-performance strategy appear strongly aligned with shareholder interests. Additional information on our shareholder engagement program is set forth under “Shareholder Outreach” on page 13.

Shareholders have also been supportive of recent enhancements to our executive compensation program, including:

In 2017, our executive compensation program received 95% approval from our shareholders. The favorable shareholder vote and positive feedback from investors were two factors that contributed to the Compensation Committee’s decision to refrain from making substantial changes to our compensation practices and policies in 2017. The Compensation Committee will continue to consider say-on-pay vote results and feedback from shareholders when reviewing our executive compensation programs and practices.

Program Objectives

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COMPENSATION DISCUSSION AND ANALYSIS

Program Design and Principal Elements

What We Do
		Vast majority of pay is performance-based
		Multiple performance metrics
		Rigorous stock ownership requirements
		Robust clawback policy
		Benchmark target pay to median of a peer group developed using appropriate criteria
		Active engagement with shareholders
		Challenging performance targets
		Stock holding requirements
		Limited perquisites
		Independent compensation consultant reports directly to Compensation Committee

 

What We Don’t Do
		No payouts for below-threshold performance
		No accelerated vesting of equity awards solely in connection with a change in control
		No tax gross-ups, other than for certain relocation expenses
		No employment agreements
		No change-in-control arrangements
		No pledging or hedging of Boeing stock
		No uncapped incentive awards

2017 Target Compensation

We design our executive compensation program to attract and retain the talent needed to achieve our business and financial objectives, reward executives who achieve those objectives, and align executives’ interests with the long-term interests of our shareholders. The Compensation Committee reviews our executive compensation program on at least an annual basis and, with the assistance of its independent compensation consultant, compares our executive compensation practices to those of our peers. Individual executive pay is generally benchmarked against the median of our peer group, but actual target pay also takes into account job requirements, the executive’s experience and performance, and business needs.

The table below sets forth our 2017 NEOs, with their target compensation elements and target total compensation based on their base salary as of December 31, 2017. In each case, target amounts are those amounts that would have been earned had the Company and the executive achieved target performance levels set by the Compensation Committee. The 2017 Target Long-Term Incentive Compensation column reflects target values of all awards under our long-term incentive program, which consists of performance awards, PBRSUs, and RSUs. Target value of actual incentive awards may differ from these amounts due to changes in base salary during the year.

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COMPENSATION DISCUSSION AND ANALYSIS

Performance Metrics for 2017 Incentive Plans

Free Cash Flow, Core Earnings Per Share, and Revenue

Beginning in 2017, our annual incentive plan measures Company performance using a combination of free cash flow, core earnings per share, and revenue. The performance award portion of our long-term incentive program will also pay out based on these metrics. Core earnings per share, or EPS, is defined as GAAP diluted earnings per share excluding the net earnings per share impact of unallocated pension and other postretirement benefit expense. Free cash flow is defined as GAAP operating cash flow less capital expenditures for property, plant, and equipment additions.

The Compensation Committee determined that these performance metrics would further sharpen executives’ focus on the elements of operational and financial performance that we believe best drive long-term shareholder value. Our broad-based, non-executive incentive programs also use these metrics, further ensuring that all employees are aligned in pursuit of the same financial and operational goals. We believe that these metrics drive accountability and performance and enable employees at every level to maintain a stronger and more direct line of sight to operational and financial performance. These metrics were also well-received by shareholders, based on feedback from our shareholder outreach program and last year’s favorable say-on-pay results. To better reflect the core operating performance of the Company and its businesses, the Compensation Committee may adjust one or more of these metrics to account for (1) significant external events outside management’s control, (2) management decisions intended to drive long-term value but with short-term financial impacts, such as major acquisitions or dispositions, and (3) significant changes to market conditions that were not foreseeable at the outset of a performance period. References to these metrics in this proxy statement mean such metrics as adjusted to account for such items. See “2017 Annual Incentive Assessment” on page 29 for information on adjustments made by the Compensation Committee for 2017.

Because of the long product cycles in our business, the Compensation Committee believes that the one-year and three-year versions of these metrics create complementary, yet different, incentives for our employees. The table below outlines some of the key drivers impacting our operational and financial performance on a one- and three-year basis.

We use these metrics to drive the linkage between business objectives and improved and sustained performance. For example, key drivers impacting revenue include new orders, business execution, first-time quality, and our ability to deliver on our commitments to customers. Likewise, drivers of core EPS include first-time engineering and manufacturing quality, continued innovation—particularly for purposes of the long-term incentive program—and achievement of productivity targets. Finally, free cash flow, weighted at 50%, is the metric with the most significant impact on executive compensation. Drivers of free cash flow include efficient long-term asset utilization and disciplined investments in productivity and innovation, as well as many of the other drivers described above. In some cases, these drivers will have enhanced significance for either one-year or three-year performance. For example, as commercial airplanes are often delivered one or more years after they are ordered, new orders tend to have a more significant impact on revenue in the context of the three-year performance periods.

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COMPENSATION DISCUSSION AND ANALYSIS

Total Shareholder Return Relative to Peer Companies

The long-term incentive program also includes PBRSUs, which are paid in shares of stock after the end of a three-year performance period and are earned based on Boeing’s TSR relative to a group of peer companies determined by the Compensation Committee. For additional information on our peer group, see “Benchmarking Against Our Peer Group” on page 33.

Adjusted Operating Cash Flow (For 162(m) Purposes)

We have historically measured our adjusted operating cash flow in order to determine the deductibility of annual and long-term incentive awards under Section 162(m) of the Internal Revenue Code. Adjusted operating cash flow means the net cash provided by operating activities of the Company as reported in our consolidated statement of cash flows included in our Annual Report on Form 10-K, adjusted to eliminate the effect of net customer financing cash flows. Incentive deductibility, including any impacts to deductibility that may result from the passage of the Tax Cuts and Jobs Act of 2017, is discussed in more detail under “Accounting and Tax Implications, Including Limitations on Deductibility of Compensation” on page 35.

Determination of Performance Goals and Awards

Each year, the Compensation Committee sets one- and three-year financial goals for our annual and long-term compensation programs based on our long-range business plan. These goals incorporate expectations regarding the probability of achieving performance goals, key risks, and a degree of “stretch” to push our executives to achieve superior performance. When setting performance goals, the Compensation Committee seeks to ensure that the target payout is achievable if the Company executes according to its long-range business plan during the applicable period. It is expected that both maximum performance and less-than-threshold (i.e., zero payout) performance would be infrequent.

Following each performance period, the Compensation Committee evaluates our performance and approves final awards. Set forth below are our goals and actual performance for the 2017 annual incentive plan and 2015-2017 performance awards, together with key drivers of our performance. 2015-2017 performance awards were granted in 2015, and were earned based on economic profit performance. For additional information on economic profit, see “2015-2017 Performance Award Assessment” on page 30.

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COMPENSATION DISCUSSION AND ANALYSIS

Mix of Pay

Approximately 90% of the CEO’s target compensation and 84% of the other NEOs’ target compensation is variable based on Company and individual performance. Variable compensation consists of the target annual incentive and the target value of performance awards, PBRSUs and RSUs. The percentages below are calculated by dividing each compensation element by the target total compensation, which consists of base salary plus variable compensation.

Base Salary

Base salaries are designed to provide a fixed level of cash compensation for each executive based on competitive market data and individual factors such as competencies, skills, experience, contributions, performance, and the assumption of new responsibilities or promotions. There are no specific weightings assigned to these individual factors. Annual salary adjustments generally take effect in March. When setting base salaries, the Compensation Committee and the Board also consider the impact of base salary on other compensation elements, such as the size of target incentive awards. In 2017, Mr. Smith’s base salary increased by 8.1%, partly in connection with his assumption of additional responsibilities relating to enterprise performance and strategy. The base salaries of the other NEOs increased between 1.5% and 3% over their 2016 salaries.

Annual Incentive Plan

The annual incentive plan is designed to drive near-term program execution, operational excellence, and sustainable growth, as well as to differentiate executives based on individual performance. The Compensation Committee assigned each executive a target incentive award based on competitive market data and the executive’s pay grade, responsibilities and role. Actual incentive awards are determined as follows:

The CEO’s individual performance score is determined by the Compensation and GON Committees and reviewed with the other independent directors of the Board. The CEO presents the Compensation Committee with recommendations for individual performance scores for each of the other executive officers, including the other NEOs. The Compensation Committee reviews the CEO’s recommendations, makes such adjustments as it deems appropriate, and approves the individual performance scores. Individual performance scores reflect the Compensation Committee’s assessment of each executive’s business achievements, contributions, and overall organization performance, including performance with respect to several key leadership behaviors that Boeing believes are critical to business success.

Prior to 2017, business unit results were included as a separate score in the annual incentive plan. Beginning in 2017, however, our three performance metrics—free cash flow, core EPS, and revenue—were combined to produce a single Company performance score. The Compensation Committee determined that this shift to one enterprise-wide score would drive even greater integration among our business units and further align executives’ and employees’ interests with those of our shareholders. It is expected that both maximum performance and less-than-threshold (i.e., zero payout) performance would be infrequent.

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COMPENSATION DISCUSSION AND ANALYSIS

2017 Annual Incentive Assessment

The Company performance score is determined by comparing the Company’s free cash flow, core EPS, and revenue to targets set at the beginning of the year by the Compensation Committee, with free cash flow weighted at 50% and the other two metrics weighted at 25% each. Actual performance that is higher or lower than target for any particular metric is assigned a percentage score from 0% to 200% based on a curve established by the Compensation Committee. 2017 Company performance with respect to each metric is set forth below:

The performance set forth above resulted in a Company performance score of 187%. For information on key drivers of Company performance, see “Determination of Performance Goals and Awards” on page 27. In order to better reflect the Company’s core operating performance, the Compensation Committee, consistent with its authority and past practices, adjusted core EPS downward to exclude the financial impact of lower-than-planned tax rates and payments.

In 2017, individual performance scores for the NEOs ranged from 100% to 120%, averaging 109%. The performance scores were primarily the result of each executive’s financial, operational, and business achievements, as well as their progress on key initiatives, leadership strength, and overall contributions to the Company during 2017. In addition to these factors, the individual performance scores reflect the following:

Long-Term Incentive Program

The long-term incentive program is designed to drive achievement of long-term operational and financial goals and increased shareholder value, as well as to encourage retention of key talent over a sustained time period. Target long-term incentive awards are based on a percentage of base salary. In 2017, the Compensation Committee increased Mr. Smith’s long-term incentive target from 400% to 425% in connection with the expansion of his responsibilities to include enterprise performance and strategy.

Performance Awards. Performance awards reward executives to the extent that the Company meets or exceeds target performance thresholds for the relevant three-year performance period. Three-year financial targets are set by the Compensation Committee at the beginning of each performance period based on the Company’s long-range business plan. Final awards may range from 0% to 200% of an individual’s target. Performance awards are designed

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COMPENSATION DISCUSSION AND ANALYSIS

to pay 100% of target at the end of the three-year performance cycle if performance goals are achieved. Payment, if earned, is made in cash, stock, or a combination of both, at the Compensation Committee’s discretion. It is expected that both maximum performance and less-than-threshold (i.e., zero payout) performance would be infrequent.

Beginning with awards granted in 2017, performance awards will pay out based 50% on free cash flow, 25% on core EPS, and 25% on revenue, in each case over a three-year performance period. For additional information, see page 26.

Performance-Based Restricted Stock Units. PBRSUs align the interests of our leaders with our shareholders by tying award payout levels to TSR performance as compared to the companies against which we compete for customers, capital and/or executive talent, a group consisting of our benchmarking peer group plus Airbus. PBRSUs pay out in shares of Boeing stock based on Boeing’s TSR over a three-year period (beginning and ending in February) relative to those competitors. TSR performance at less than the 20th percentile results in a 0% payout, with payouts increasing at 25% increments up to a maximum of 200% for performance exceeding the 91st percentile. PBRSU payouts are also subject to an overall cap of 400% of grant date target value. Under the terms of the awards, peer companies may be subject to removal if, for example, they cease to trade on a public exchange. For additional information on our benchmarking peer group, see “Benchmarking Against Our Peer Group” on page 33.

Restricted Stock Units. RSUs reward continued and sustained performance. RSUs provide an immediate sense of ownership because the value of these units is equal to Boeing’s stock price. As such, the ultimate value realized upon vesting (three years after the grant date) will be based on the stock price at that point in time. The use of RSUs is consistent with our objective of facilitating significant stock ownership and providing a mix of equity and cash-settled awards.

2015-2017 Performance Award Assessment

Economic profit was the performance metric used in connection with the 2015-2017 performance awards. Three-year economic profit was calculated as follows:

Boeing’s 2015-2017 economic profit was $14.6 billion versus a target of $14.2 billion. This resulted in a performance award payout factor of 9% above the target amount. The performance awards were paid to executives in cash. This above-target performance was achieved despite a performance target that was 23% higher than the target for the 2014-2016 performance period. For information on key drivers of Company performance during this period, see “Determination of Performance Goals and Awards” on page 27.

For the 2015-2017 performance period, the Compensation Committee increased economic profit to exclude or partially exclude the financial impact of historically low discount rates that caused higher pension expense, reclassification of two early-build flight test 787 aircraft to research and development expense, deterioration in the air cargo market, and changes in commodity price indices that impacted price escalation formulas for our Commercial Airplanes business. The Compensation Committee decreased economic profit to exclude or partially exclude the financial impact of lower-than-planned tax rates and favorable medical claims and subsidies under the Affordable Care Act that reduced post-retirement expense. References to economic profit in this proxy statement mean economic profit as adjusted to account for such items.

2015-2017 Performance-Based Restricted Stock Units Assessment

Boeing’s TSR for the 2015-2017 performance cycle from February 24, 2015 to February 22, 2018 was 144.6%, producing a relative TSR rank of first out of 22 companies and a payout factor of 200%. Due to Boeing’s strong absolute stock price performance during that period, the PBRSUs paid out at 400% of the grant date target value, the maximum payout permitted under the terms of the PBRSUs.

Supplemental Equity Awards

From time to time the Compensation Committee may grant equity awards to executives to attract and retain high-performing leaders, reward exceptional performance, or recognize expanded responsibility. These equity awards have vesting and other provisions designed to promote retention of the services and skills of the recipient. For example, these awards generally do not vest until three to four years after the grant date and are forfeited in full if the executive resigns, retires, or is terminated for cause prior to vesting. During 2017, the Compensation Committee approved supplemental grants of RSUs for Messrs. Deal and Smith in recognition of their increased responsibilities and as a means of retention.

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COMPENSATION DISCUSSION AND ANALYSIS

No Accelerated Vesting or Tax Gross-up in Connection with a Change in Control

We do not accelerate the vesting of any equity awards solely in connection with a change in control. In addition, the unearned portion of all annual incentive plan and long-term incentive program awards are forfeited upon termination or retirement. We also do not provide tax gross-ups in connection with a change in control.

Other Design Elements

As part of a comprehensive and competitive executive compensation package, executives may be eligible for additional benefits as summarized below. These benefits are designed to attract and retain the executive talent needed to achieve our business and financial objectives.

Retirement Benefits

Our executives participate in our Voluntary Investment Plan, or VIP, a broad-based, tax-qualified defined contribution pension plan, and are eligible to participate in our Supplemental Benefit Plan, or SBP, a nonqualified defined contribution plan. The SBP, among other things, provides certain executives with additional retirement benefits and allows eligible participants to receive Company contributions that would otherwise exceed Internal Revenue Code limits applicable to the VIP. For more information on the SBP, see “Supplemental Benefit Plan” on page 43. Executives hired prior to 2009 earned benefits under our Pension Value Plan, or PVP, a broad-based defined benefit pension plan, and our defined benefit Supplemental Executive Retirement Plan, or DB SERP, in each case until the end of 2015.

The Deferred Compensation Plan for Employees allows executives to voluntarily defer, on a nonqualified basis, receipt of a portion of salary, earned annual incentive awards, and earned performance awards. In addition, Mr. Smith has accrued benefits pursuant to a Canadian subsidiary pension in connection with his prior service with the Company. Each of these arrangements, as well as each of our broad-based pension plans for which executives are eligible, is described beginning on page 41.

Perquisites and Other Executive Benefits

Consistent with our executive compensation philosophy and our commitment to emphasize performance-based pay, we limit the perquisites and other benefits that we provide to executives, and any such benefits are provided to help achieve our business objectives. In 2017, these perquisites consisted of:

No tax gross-ups are provided except in connection with certain relocation expenses. The Compensation Committee annually reviews perquisites and other executive benefits to ensure that they are reasonable and consistent with our executive compensation philosophy.

Severance Benefits

We have maintained an Executive Layoff Benefit Plan since 1997 to provide a reasonable separation package for executives who are involuntarily laid off and do not become employed elsewhere within the Company or refuse any offer of employment with the Company as an executive. The plan provides a layoff benefit equal to one year of base salary plus an amount equal to the executive’s target annual incentive multiplied by the Company performance score for the year in which the layoff occurs, less any amounts paid pursuant to an individual employment, separation, or severance agreement (if applicable). The plan does not provide enhanced change-in-control benefits or tax gross-ups. The Compensation Committee believes that the benefits provided under the plan are consistent with those provided by our peers and other companies with whom we compete for executive talent. In addition to the benefits under the plan, executives may continue to participate in certain incentive award programs after a separation based on service and the terms and conditions of the award.

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COMPENSATION DISCUSSION AND ANALYSIS

Governance of Pay-Setting Process

The Company applies the following approach in setting compensation for its executive officers:

Role of Board, Management and Consultants

The Compensation Committee establishes, reviews, and approves all elements of NEO compensation. During 2017, the Compensation Committee worked with an independent executive compensation consultant, Compensation Advisory Partners LLC, or CAP, for advice and perspective regarding market trends that may affect decisions about our executive compensation program and practices. CAP also advised the GON Committee in connection with nonemployee director compensation matters. CAP provided no services to Boeing outside of its duties as the independent consultant to these two Board committees. The Compensation Committee has assessed the independence of CAP pursuant to SEC and NYSE rules and determined that no conflict of interest exists that would prevent CAP from independently representing the Compensation and GON Committees. For more information on this conflicts of interest assessment, see “Compensation Consultants” on page 20.

Boeing management has the responsibility for effectively implementing practices and policies approved by the Compensation Committee. Meridian Compensation Partners, LLC served as management’s compensation consultant during 2017.

Additional responsibilities of the Board of Directors, Compensation Committee, management, and the compensation consultants include:

Board of Directors and Compensation Committee

Management

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Consultants

Benchmarking Against Our Peer Group

Additional Considerations

Executive Stock Ownership and Stock Holding Requirements

In order to further align the interests of our senior executives with the long-term interests of shareholders, we require NEOs and other senior executives to own significant amounts of Boeing stock. Senior executives are required to attain and maintain throughout their term of employment with us the following investment position in Boeing stock and stock equivalents:

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COMPENSATION DISCUSSION AND ANALYSIS

Senior executives must fulfill this requirement within five years after joining the executive grade to which the requirement applies. During the five-year period, executives are expected to accumulate qualifying equity until they meet the minimum stock ownership requirement. In addition, executive officers must hold all newly-vested stock until their minimum stock ownership requirement has been satisfied. Shares owned directly by the executive as well as stock units, RSUs, deferred stock units, and shares held through our savings plans are included in calculating ownership levels. Shares underlying stock options and PBRSUs do not count toward the ownership guidelines. As of December 31, 2017, each NEO exceeded the applicable stock ownership requirement.

Each year, the Compensation Committee reviews the ownership position of each executive officer as well as a summary covering all senior executives. In assessing stock ownership, the average daily closing stock price over a one-year period (ending September 30 of each year) is used. This approach mitigates the effect of stock price volatility and is consistent with the objective of requiring long-term, sustained stock ownership. The Compensation Committee may, at its discretion, elect at any time to pay some or all performance awards in stock, including for executives who are currently not in compliance with the applicable ownership requirement.

Granting Practices

The Compensation Committee typically grants long-term incentive awards each February at a regular meeting of the Compensation Committee. The Compensation Committee meeting date, or the next business day if the meeting falls on a day when the NYSE is closed for trading, is the effective grant date for the grants.

New executive officers hired or internally promoted after the February grant date but on or before December 31 will generally receive a pro-rated long-term incentive award, if any, for that year. Grants are pro-rated based on the time remaining in the 36-month performance or vesting period as of the date of hire or promotion. This approach was adopted to better align our program with peer practices and provide the executive with an immediate tie to Boeing’s long-term performance.

We also may grant supplemental equity awards to attract and retain high-performing leaders, reward exceptional performance, or recognize expanded responsibility. The effective date of these grants is generally based on the timing of the recognition and is set by the Compensation Committee. The exercise/grant price is the fair market value of Boeing stock on the effective date.

Securities Trading Policy

We have a policy that prohibits all employees from trading in Boeing securities while aware of material non-public information, and that further prohibits executive officers and directors from pledging Boeing securities, or engaging in hedging transactions or short sales and trading in “puts” and “calls” involving Boeing securities. This policy is described in our Corporate Governance Principles, which may be viewed in the corporate governance section of our website at www.boeing.com/company/general-info/corporate-governance.page.

Clawback Policy

We will require reimbursement of any incentive payments to an executive officer if the Board determines that the executive engaged in intentional misconduct that caused or substantially caused the need for a substantial restatement of financial results and a lower payment would have been made to the executive based on the restated financial results. This policy is described in our Corporate Governance Principles. In addition, even absent a financial restatement, the Compensation Committee may require reimbursement of incentive compensation from any executive officer who has engaged in fraud, bribery, or illegal acts like fraud or bribery, or knowingly failed to report such acts of an employee over whom such officer had direct supervisory responsibility. The Compensation Committee also has the flexibility under this policy to direct the Company to publicly disclose any recoupment made pursuant to the policy.

In addition, in 2016 we amended The Boeing Company 2003 Incentive Stock Plan and certain other executive compensation plans to provide that awards under the plans may be forfeited or recovered in the event an award recipient engages in various types of conduct deemed detrimental to the Company’s interest, including theft or fraud against the Company and engaging in competition with the Company.

Tax Gross-Ups

We do not provide tax gross-ups other than for certain relocation expenses, in accordance with our standard relocation policies.

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COMPENSATION DISCUSSION AND ANALYSIS

Accounting and Tax Implications, Including Limitations on Deductibility of Compensation

The Compensation Committee considers the accounting and tax impact reflected in our financial statements when establishing the amount and forms of long-term and equity compensation. The forms of long-term compensation selected are intended to be cost-efficient. We account for all awards settled in equity in accordance with FASB ASC Topic 718, pursuant to which the fair value of the grant, net of estimated forfeitures, is expensed over the service/vesting period based on the number of options, shares, or units, as applicable, that vest. This includes our PBRSUs and RSUs for U.S.-based executives. The estimated payout amount of performance awards, along with any changes in that estimate, is recognized over the performance period under “liability” accounting. Our ultimate expense for performance awards will equal the value earned by/paid to the executives and, accordingly, will not be determinable until the end of the three-year performance period.

Section 162(m) limits the tax deductibility of compensation paid by a public company to its CEO and certain other highly compensated executive officers to $1 million. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. The Tax Cut and Jobs Act of 2017, or TCJA, largely eliminated the exception for performance-based compensation under 162(m) effective for tax years beginning after December 31, 2017. However, certain types of compensation may be grandfathered under the TCJA transition rules, which are expected to be clarified with respect to whether outstanding compensation meet the transition requirements.

We consider the impact of 162(m) when developing and implementing our executive compensation program. Annual incentive awards, performance awards and PBRSUs have been generally designed to meet the deductibility requirements in effect under the pre-TCJA Section 162(m) limits. We also believe that it is important to preserve flexibility in administering compensation programs in a manner designed to promote varying corporate goals. Accordingly, we have not adopted a policy that all compensation must qualify as deductible under pre-TCJA Section 162(m), and we are evaluating the impacts of the TCJA on our executive compensation programs. Amounts awarded or paid under any of our compensation programs, including salaries, annual incentive awards, performance awards, PBRSUs and RSUs may not qualify as performance-based compensation that is excluded from the limitation on deductibility.

There are different means by which the Board may pay executives. One such means is the Elected Officer Annual Incentive Plan, which was established to allow for the payment of annual incentive awards that are designed to be deductible under Section 162(m). However, that plan is not the exclusive means by which annual or long-term incentive payments may be made to NEOs. The Board at its discretion may make such awards. When awards are made outside the Elected Officer Annual Incentive Plan they may not be tax deductible. For 2017, we met the plan requirements for the Elected Officer Annual Incentive Plan. As a result, payments made under this plan have been considered performance-based compensation under Section  162(m), and will be subject to the new deductibility rules under the TCJA.

Compensation Committee Report

Management has prepared the Compensation Discussion and Analysis, beginning on page 23. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee during 2017 had a relationship that requires disclosure as a Compensation Committee interlock.

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation and Risk

We believe that our compensation programs create appropriate incentives to drive sustained, long-term increases in shareholder value. These programs have been designed and administered in a manner that discourages undue risk-taking by employees. Relevant features of these programs include:

In light of these features, we conclude that the risks arising from our executive and employee compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

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COMPENSATION OF EXECUTIVE OFFICERS

Summary Compensation Table

The following table sets forth information regarding compensation for each of our 2017 named executive officers.