SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

the Securities Exchange Act of 1934

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

THE BOEING COMPANY

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

March 23, 200714, 2008

Dear Shareholder:

I am pleased to invite you to attend The Boeing Company’s 20072008 Annual Meeting of Shareholders, which will be held on Monday, April 30, 2007,28, 2008, beginning at 10:00 a.m., Central time, in Chicago, Illinois. We will meet at The Field Museum, which is located at 1400 South Lake Shore Drive in Chicago.

Activities at the Annual Meeting will be limited to the items of business listed in the Notice of Annual Meeting of Shareholders. The following items of business will be presented:

Your Board of Directors recommends a vote for the election of the nominees for director and approval of an advisory vote on the appointment of the Company’s independent auditors. The Board recommends a vote against each of the shareholder proposals. We will also report on the activities of the Company. You will have an opportunity to submit questions or comments on matters of interest to shareholders generally.

Your vote is important. Whether or not you plan to attend the Annual Meeting in person, I urge you to complete the proxy card and return it promptly.

Very truly yours,

W. James McNerney, Jr.

Chairman of the Board, President and Chief Executive Officer

THE BOEING COMPANY

Boeing Corporate HeadquartersOffices

100 North Riverside Plaza, Chicago, Illinois 60606

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

This proxy statement is issued in connection with the solicitation of a proxy on the enclosed form by the Board of Directors of The Boeing Company for use at the Company’s 2007 Annual Meeting of Shareholders. We will begin distributing this proxy statement, a form of proxy and the 2006 Annual Report on or about March 23, 2007.

By Order of the Board of Directors

James C. JohnsonMichael F. Lohr

Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Shareholders to Be Held on April 28, 2008.

This Proxy Statement and the 2007 Annual Report are available at:

www.edocumentview.com/boeing

TABLE OF CONTENTS

i

THE BOEING COMPANY

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

Monday, April 30,28, 2008

This Proxy Statement is issued in connection with the solicitation of a proxy on the enclosed form by the Board of Directors of The Boeing Company for use at the Company’s 2008 Annual Meeting of Shareholders. We will begin distributing this Proxy Statement, a form of proxy and the 2007 Annual Report on or about March 14, 2008.

PROXIES AND VOTING AT THE MEETING

Holders of Boeing stock at the close of business on March 1, 2007February 28, 2008 are entitled to receive Notice of the Annual Meeting and to vote their shares at the Annual Meeting. As of that date, there were approximately 789,112,281761,284,274 shares of common stock outstanding and approximately 758,246,634729,966,535 of those shares were eligible to vote. (The shares held in the ShareValue Trust for the Company’s ShareValue Plan are not entitled to vote, and shares issued in exchange for shares of Rockwell International Corporation or McDonnell Douglas Corporation that have not been exchanged are not eligible to vote.) There were 178,871169,032 registered shareholders on the record date and approximately 713,311708,368 beneficial shareholders whose shares were held in “street name” through a broker or bank.

Shares represented by a properly executed proxy will be voted at the Annual Meeting and, when instructions are given by the shareholder, will be voted in accordance with those instructions. If a proxy is executed and returned but no instructions are given, the shares will be voted according to the recommendations of the Board of Directors. The Board recommends a vote FOR Items 1 and 2 and AGAINST Items 3 through 11.9.

The Board of Directors is not aware of any business that may properly be brought before the Annual Meeting other than those matters described in this proxy statement.Proxy Statement. However, the enclosed proxy card gives discretionary authority to persons named on the proxy card to vote the shares in their best judgment if any matters other than those shown on the proxy card are properly brought before the Annual Meeting.

How to Vote

Your vote is important and we appreciate your prompt attention to it. Registered shareholders can vote by telephone, the Internet or mail, as described below. If you are a beneficial shareholder, please refer to your proxy card or the information forwarded by your broker, bank or other holder of record to see what options are available to you.

Registered shareholders and savings plan participants may cast their vote by:

In order to vote via telephone or on the Internet, please have in front of you either your proxy card or, if you have consented to receive your materials electronically, your e-mail notification advising that materials are available online. A phone number and a website are contained on each of the documents. Upon entering either the phone number or the Internet address, you will be instructed on how to proceed.

Proxy cards will be sent to those persons having interests in Boeing stock through participation in the stock funds of the following Company benefit plans (“Plans”):

The Plans listed above are sponsored by Boeing and its subsidiaries for their employees.

Shares of Boeing stock held in the Plans (“Plan Shares”) are registered in the namesname of the trustee. The participants do not have actual ownership of the Plan Shares and may not vote the Plan Shares directly at the Annual Meeting. However, Plan participants are allocated interests in the shares and may instruct the trustee how to vote such

interests. The number of shares of Boeing stock shown on your proxy card includes all registered shares and Plan Shares. Plan Shares can be voted only by submitting proxy instructions, whether by telephone, the Internet or mailing in the printed proxy card; theyPlan Shares cannot be voted at the Annual Meeting and prior voting instructions cannot be revoked at the Annual Meeting. If you are a Plan participant, your proxy instructions must be received by the Plan trustee no later than midnight, Eastern time, on April 25, 2007.23, 2008.

The trustee will cast Plan Share votes according to the participants’ instructions. If no instructions are received, the trustee will vote the participants’ Plan Shares in accordance with the terms of the Plans, which means shares will be voted in the same manner and proportion as the shares with respect to which voting instructions have been received, unless contrary to applicable law.

Revocation of Proxies

A registered shareholder may revoke a properly executed proxy at any time before its exercise by:

Beneficial shareholders cannot revoke their proxiesvoting instructions in person at the Annual Meeting because the actual shareholders of record, brokers or banks, will not be present. Beneficial shareholders wishing to change their votes after returning voting instructions to their brokers or banks should contact the brokers or banks directly.

Vote Required

Vote Required for Quorum and Director Elections

The presence at the Annual Meeting, in person or by duly authorized proxy, of the holders of one-third of the outstanding shares of stock entitled to vote constitutes a quorum for the transaction of business. Each share of Boeing stock entitles the holder to one vote on each matter presented for shareholder action. In February 2007, theThe Board of Directors amended the Company’s By-Laws and Corporate Governance Principles to adopthas adopted a majority vote standard in uncontested director elections. Because the Company did not receive advance notice under its By-Laws of any shareholder nominees for directors, the 20072008 election of directors is an uncontested election. To be elected in an uncontested election, a director nominee must receive more “For” votes than “Against” votes. Abstentions will have no effect on the election of directors since only votes “For” or “Against” a nominee will be counted.

Effect of an Incumbent Director Not Receiving the Required Vote

Boeing is a Delaware corporation and, under Delaware law, if an incumbent director is not elected, that director remains in office until the director’s successor is duly elected and qualified or until the director’s death, resignation or retirement. To address this potential outcome, in February 2007, the Board has also adopted a director resignation and recusal policy in the Company’s Corporate Governance Principles.

Under this policy, the Board of Directors will nominate for directors only those incumbent candidates who tender, in advance, irrevocable resignations, and the Board has obtained such conditional resignations from the nominees in this year’s proxy statement.nominees. The irrevocable resignations will be effective upon the failure to receive the required vote at any annual meeting at which theydirectors are nominated for re-election and Board acceptance of the resignation.resignations. The Governance, Organization and Nominating Committee will recommend to the Board whether to accept or reject thea tendered resignation. The Board will publicly disclose its decision within 90 days following certification of the shareholder vote. In addition, the director whose resignation is under consideration will not participate in the recommendation of the Governance, Organization and Nominating Committee with respect to the resignation. If the Board does not accept the resignation, the director will continue to serve until the next annual meeting and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal. If the Board accepts the resignation, then the Board, in its sole discretion, may fill any resulting vacancy or may decrease the size of the Board.

Vote Required for Other Proposals

With respect to each of the proposals other than the election of directors (i.e., Items 2-11)2-9), shareholders may vote in favor of the proposal or against the proposal, or abstain from voting. The affirmative vote of the majority of shares present in person or by proxy and entitled to vote at the Annual Meeting is required under Delaware law for approval of Items 2-11.2-9.

A shareholder who signs and submits a ballot or proxy is “present,” so an abstention will have the same effect as a vote against Items 2-11.2-9.

Under the rules of the New York Stock Exchange (“NYSE”), if your broker holds your shares in its name, the broker is permitted to vote your shares on the election of directors and Item 2, even if it does not receive voting instructions from you. Items 3-113-9 are “non-discretionary,” meaning that brokers who hold shares for the accounts of their clients and who have not received instructions from their clients do not have discretion to vote on those items. When a broker votes a client’s shares on some but not all of the proposals at the Annual Meeting, the missing votes are referred to as “broker non-votes.” Those shares will be included in determining the presence of a quorum at the Annual Meeting but are not considered “present” for purposes of voting on the non-discretionary items.

Expenses of Solicitation

All expenses for soliciting proxies will be paid by the Company, which has retained Georgeson Inc. (“Georgeson”), 17 State199 Water Street, 26th Floor, New York, New York 10004,10038, to aid in the solicitation of proxies, for fees of approximately $15,000, plus additional expenses of approximately $110,000. Proxies may be solicited by personal interview, mail and telephone. Georgeson has contacted brokerage houses, other custodians and nominees to ask whether other persons are the beneficial owners of the shares they hold in street name and, if that is the case, will supply additional copies of the proxy materials for distribution to such beneficial owners. The Company will reimburse such parties for their reasonable expenses in sending proxy materials to the beneficial owners of the shares.

Voting Results

The Company will announce preliminary voting results at the Annual Meeting. Final official results will be printed in the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 20072008 (available atwww.sec.gov andwww.boeing.com).

No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Annual Meeting.

ITEM 1.  ELECTION OF DIRECTORS

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

A VOTE FOR ALL NOMINEES.

The Board of Directors of the Company, pursuant to the By-Laws, has determined that the number of directors of the Company will be eleven.twelve, which number will be reduced to eleven upon the retirement of Rozanne L. Ridgway. Board policy requires each nonemployee director to retire at the annual meeting following that director’s 72nd birthday. Having reached the mandatory retirement age of 72, Ms. Ridgway will not stand for re-election in 2008.

Pursuant to the By-Laws, each director is elected annually to a one-year term. Directors in this uncontested election will be elected if the director receives more “For” votes than “Against” votes. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified or until his or her death, resignation or retirement. Each nonemployee director must retire at the annual meeting following his or her 72nd birthday. If any nominee is unable to serve, proxies will be voted for the election of such person as shall be designated by the Board of Directors unless the Board chooses to reduce the number of directors serving on the Board.

The Board of Directors has proposed the eleven nominees listed below for election as directors at the Annual Meeting with one-year terms expiring in 2008.2009. Except as otherwise specified in a proxy, proxies will be voted for these nominees.

The Governance, Organization and Nominating Committee of the Board of Directors identifies and recommends to the Board the nominees to fill any vacancies on the Board and nominees to be proposed by the Board as candidates for election as directors. The Committee frequently works with a third-party search firm to identify potential candidates to sit on the BoardBoard. Retired Marine Corps General James L. Jones, one of Directors. Mr. Arthur D. Collins, Jr., the Company’s newesttwo new directors, was identified as a potential candidate by the Lead Director and the Chair of the Governance, Organization and Nominating Committee. Edward M. Liddy, the other new director, was identified as a potential candidate by the members of the Governance, Organization and Nominating Committee. Gen. Jones and Mr. Liddy met the Committee’s candidate criteria and waswere interviewed by representatives of the Company and the Board after Mr. Collins was identified as a potential candidate by a third-party search firm.Board. Based on these interviews, Gen. Jones and Mr. Collins wasLiddy were selected by the Committee and approved by the Board. Gen. Jones and Mr. Collins wasLiddy were named a directordirectors by the Board effective February 27,June 21, 2007 and he isAugust 28, 2007, respectively, and they are standing for election for the first time. As discussed in further detail below on page 9, the Board has determined that each of the nominees for director meets the criteria for independence prescribed by the NYSE listing standards and has either no relationships with the Company (other than being a director and shareholder of the Company) or only immaterial relationships with the Company, except for W. James McNerney Jr., who is not an independent director because he is President and Chief Executive Officer of the Company.

NOMINEES FOR DIRECTOR

BOARD MEMBERSHIP AND DIRECTOR INDEPENDENCE

The Company’s business affairs are managed under the direction of the Board of Directors. Directors meet their responsibilities by participating in meetings of the Board and Board committees on which they sit, through communications with our Chief Executive Officer and other officers, by reviewing materials provided to them, and by visiting our offices and plants.

During 2006,2007, the Board of Directors met eightseven times, having six regular meetings and twoone special meetings. Directors as a group attended 94% of the Board meetings.meeting. The committees of the Board held a total of 34 meetings. Directors as a group attended 96% of the committee35 meetings. Each director attended at least 76%80% of the meetings of the Board and the committees on which he or she served. Each director is expected to attend the Company’s annual meeting of shareholders. Last year, all but onetwo of the directors attended the annual meeting of shareholders.

The Board of Directors has adopted the Director Independence Standards set forth below to assist in determining whether a director does not have material relationships with the Company and thereby qualifies as independent. Shareholders may also access a copy of these standards on the Company’s website atwww.boeing.com/corp_gov/index.html. The Director Independence Standards are based on the NYSE “independent director” listing standards. The Company’s Corporate Governance Principles require that at least 75% of the Board be independent under the NYSE listing standards or be non-employeenonemployee directors.

To be considered “independent” the Board of Directors must make an affirmative determination, by a resolution of the Board as a whole, that the director being reviewed has no material relationship with the Company other than as a director, either directly or indirectly (such as a partner, shareholder or executive officer of another entity that has a relationship with the Company). In each case, the Board broadly considers all relevant facts and circumstances.

A director will not be deemed to be “independent” if:

(a) the director is, or in the last three years was, employed by the Company or any of its direct or indirect subsidiaries;

(b) an immediate family member of the director is, or in the last three years was, employed by the Company as an executive officer;

(c) the director, or an immediate family member of the director, is a current partner of a firm that is the Company’s internal or external auditor or within the last three years (but no longer) was a partner or employee of such a firm and personally worked on the Company’s audit within that time;

(d) the director is a current employee of the Company’s internal or external auditor;

(e) an immediate family member of the director is a current employee of the Company’s internal or external auditor and that person participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice;

(f) athe director, or an immediate family member of the director, received more than $100,000 over a twelve-month period in direct compensation from the Company within the last three years, other than director and committee fees and pensions or other forms of deferred compensation, so long as such compensation is not contingent on continued service;

(g) athe director is, or within the last three years was, employed as an executive officer of another company where any of the Company’s current executives serve or served on that company’s compensation committee;

(h) an immediate family member of the director is, or within the last three years was, employed as an executive officer of another company where any of the Company’s current executives serve or served on that company’s compensation committee;

(i) athe director is an executive officer or an employee of a company that makes payments to or receives payments from the Company for property or services in an amount that exceeds in any of the last three fiscal years $1 million or 2% of that company’s consolidated gross revenues, whichever is greater; or

(j) an immediate family member of the director is an executive officer of a company that makes payments to or receives payments from the Company for property or services in an amount that exceeds in any of the last three fiscal years $1 million or 2% of that company’s consolidated gross revenues, whichever is greater.

An “immediate family member” includes a director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than domestic employees) who shares such director’s home; however, it does not include stepchildren who do not share a stepparent’s home or the in-laws of such stepchildren.

The Board of Directors has determined that the following relationships are not considered to be material and would not impair a director’s independence:

(a) a director servesthe director’s service as an employee of an organization that has purchased property or services from the Company, or provided property or services for the Company, if (i) payments for such property or services have not exceeded the greater of $1 million or 1% of that organization’s, or the Company’s, consolidated gross revenues in each of the past three fiscal years and are not expected to exceed this threshold in 20072008 and (ii) the director is not compensated directly or indirectly as a result of this relationship other than that the payments add to the revenue of either the organization or the Company, or

(b) athe director’s service as an executive officer of a not-for-profit organization if, within the preceding three years, the Company’s charitable contributions to the organization in any single fiscal year, in the aggregate, have not exceeded the greater of $1 million or 2% of that organization’s consolidated gross revenues.

Whether directors meet these categorical independence standards will be reviewed and will be made public annually prior to their standing for re-election to the Board of Directors. The mere ownership of a significant amount of stock is not in and of itself a bar to an independence determination but rather one factor to consider.

The Board of Directors has reviewed the relationships between the Company and each of its directors and has determined that John H. Biggs, John E. Bryson, Arthur D. Collins, Jr., Linda Z. Cook, William M. Daley, Kenneth M. Duberstein, James L. Jones, Edward M. Liddy, John F. McDonnell, Richard D. Nanula, Rozanne L. Ridgway and Mike S. Zafirovski are independent under the NYSE “independent director” listing standards and the Company’s Director Independence Standards and have either no relationships with the Company (other than being a director and shareholder of the Company) or only immaterial relationships with the Company. W. James McNerney, Jr. is not an independent director because he is President and Chief Executive Officer of the Company. The Company transacts business withmakes payments to or receives payments from the companies that employ Mr. Bryson, Mr. Collins, Ms. Cook, Mr. Daley, Mr. NanulaGen. Jones and Mr. Zafirovski in amounts that fall below the categorical independence standards described above.

COMMITTEE MEMBERSHIP

Pursuant to the By-Laws, the Board of Directors has established the following standing committees: Audit, Compensation, Governance, Organization and Nominating, Finance, and Special Programs. All the members of each of these standing committees other than the Special Programs Committee meet the criteria for independence prescribed by the NYSE. Membership of the standing committees is determined at the organizational meeting of the Board held in conjunction with the annual meeting.Annual Meeting. Adjustments to committee assignments may be made as of that date or such other date as the Board deems appropriate.

Membership of each committee is as follows, with committee chairpersons listed first.

The Board of Directors has adopted a written charter for each committee. Shareholders may access a copy of each committee’s charter on the Company’s website atwww.boeing.com/corp_gov/index.html. A summary of the duties and responsibilities of each committee is set forth below.

The primary purposes of the Audit Committee are to assist the Board of Directors in oversight of (1) the integrity of the Company’s financial statements, (2) the Company’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence, and (4) the performance of the Company’s internal audit function and the independent auditor. The Audit Committee has the authority to make inquiries and obtain information from managementthe Senior Vice President, Office of Internal Governance; the Senior Vice President, General Counsel; and the Vice President, Corporate Audit to support the Board’s oversight of the Company’s ethics and compliance program and to obtain advice and assistance from outside legal, accounting or other advisors as deemed necessary to perform its duties and responsibilities.

The charter of the Audit Committee requires that the Committee be comprised of at least three directors, all of whom are not employed by the Company and meet the applicable independence and financial literacy requirements of the Securities and Exchange Commission (“SEC”) and the NYSE. At least one member must be an “audit committee financial expert” and have accounting or related financial management expertise as required by the SECSecurities and the NYSE, respectively.Exchange Commission (“SEC”). The Board of Directors has determined that all of the Committee members—Mr. Biggs (Chair), Mr. Collins, Ms. Cook, Gen. Jones and Mr. Nanula Zafirovski—are audit committee financial experts and have accounting or related financial management expertise and, furthermore, that each committee member isare independent and financially literate. The Audit Committee meets regularly in executive session. The Company’s Senior Vice President, Office of Internal Governance and Senior Vice President, General CounselCorporate Audit attend all meetings of the Audit Committee. The Audit Committee may invite to its meetings any other member of management, including the Chief Executive Officer, and such other persons as it deems appropriate in order to carry out its duties and responsibilities. In addition, all members of the Audit Committee must be available to meet with the Company’s Senior Vice President, Office of Internal Governance, Senior Vice President, General Counsel, and Vice President, Corporate Audit outside of regularly scheduled meetings, as needed.

The Audit Committee:

Appoints, retains, compensates, evaluates and terminates, if necessary, the independent auditor subject to ratification by the Board of Directors;auditor;

Reviews and pre-approves both audit and non-audit services provided by the independent auditor;

Reviews and advises on the selection and removal of the internal auditor;Vice President, Corporate Audit;

Reviews and recommends changes to and approves the internal audit charter;

Reviews, on an annual basis, a formal written statementreport prepared by the independent auditor describing internal quality control procedures and any material issues raised by the most recent review or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the firm, and any steps taken to deal with such issues, and delineating all relationships relevant to audit independence between the independent auditor and the Company;

Discusses with management or the independent auditors,auditor, as appropriate, the matters required to be discussed by the Statement on Auditing Standards No. 61 and the Sarbanes-Oxley Act of 2002 relating to the conduct of the audit or quarterly review;

Reviews with the independent auditors,auditor, internal auditors and members of senior management the adequacy and effectiveness of the Company’s financial controls and financial reporting procedures;processes;

Meets periodically or at least annually with management, the senior internal auditing executiveVice President, Corporate Audit and the independent auditorsauditor in separate executive sessions;

Meets to review and discusses with financial management and the independent auditors,auditor, prior to filing, the Company’s quarterly and annual reports filed with the SEC and certifications required by the Sarbanes-Oxley Act of 2002 and relevant reports rendered by the independent auditors;auditor;

Reviews earnings press releases with management and financial information and earnings guidance provided to analysts and ratings agencies;

Prepares a report and other additional information required for inclusion in the annual proxy statement;

Reviews the charter of the Audit Committee on an annual basis and recommends to the Board of Directors changes to the charter as appropriate;

Receives reports on the Company’s compliance risk management process,processes, audit activities and trends, and pending internal investigations of alleged or potentialpotentially significant violations of law, regulationlaws, regulations or Company policies;

Reviews management’s assessment of compliance with laws, regulations and Company policies relative to payments to individuals or organizations retained as foreign sales consultants;

Meets with the Senior Vice President, Office of Internal Governance to review the Company’s ethics and business conduct programprograms and Companythe Company’s compliance with the principles of the Defense Industry Initiative on Business Ethics and Conduct;

Reviews significant pending and threatened litigation, the status of advancement of expenses to employees involved in Company-related legal proceedings, and related indemnification;

Presents to the Board such comments and recommendations as the Audit Committee deems appropriate and performs such other duties as may be assigned by the Board or deemed appropriate by the Committee within the context of the Audit Committee’s charter;

Sets clear hiring policies compliant with laws and regulations for employees and former employees of the independent auditor;

Establishes and maintains procedures for receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters;

Establishes and maintains procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

Conducts an annual self-evaluation;self-assessment relative to the purpose, duties and responsibilities of the Committee outlined in its charter;

Reports at least annually to the Board regarding the implementation and effectiveness of the Company’s ethics and compliance program; and

Reports annually to the Board regarding execution of the Audit Committee’s duties and responsibilities.responsibilities as well as any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent auditor, or the performance of the internal audit function; and

Presents to the Board such comments and recommendations as the Committee deems appropriate and performs such other duties as may be assigned by the Board or deemed appropriate by the Committee within the context of the Committee’s charter.

The charter of the Compensation Committee requires that the Committee be comprised of at least three directors, all of whom meet the independence requirements of the NYSE. In addition, the Company’s Corporate Governance Principles require that members of the Committee not be employed by the Company. The Committee is currently comprised of fourfive directors, all of whom are nonemployees and independent directors. After Ms. Ridgway’s retirement at the Annual Meeting, the Committee will be comprised of four directors.

The Compensation Committee of the Board of Directors acts on behalf of the Board to establish and oversee the Company’s executive and equity compensation programs in a manner that serves the interests of Boeingthe Company and its shareholders. Specifically, the Compensation Committee:

As a Committee or together with other independent directors, annually reviews and approves the individual elements of total compensation for the CEO and other corporate officers. The elements subject to this annual review are salary, incentive awards, equity-based awards and any other long-term incentive awards;awards.

Annually and as appropriate reviews employment and severance agreements, change-in-controlchange in control provisions affecting compensation, and special or supplemental arrangements such as supplemental retirement benefits and perquisites for the CEO and other corporate officers;officers.

Periodically reviews all incentive compensation plans and other equity-based plans. The Committee makes changes to each such plan, as permitted by the terms of the plans, when authorized to do so and reports these changes to the Board. Where it isdoes not authorized to make such changes, ithave amendment authority, the Committee recommends changesplan amendments or new plans (plan amendments) to the Board;Board.

Administers the Company’s incentive compensation and other equity-based plans;plans.

Reviews and approves corporate goals and objectives relevant to the CEO’s compensation and approves the compensation based on achievement of the goals;goals.

Reviews and discusses with management the Compensation Discussion and Analysis (which is prepared by management), recommends to the Board its incorporation in the proxy statement and prepares a Compensation Committee Report; andReport.

Conducts an annual self-evaluation.performance evaluation of the Committee.

The Compensation Committee has a charter that details the scope of authority, composition and procedures of the Committee. The Committee’s charter allows it to delegate its authority to subcommittees of the Committee. The Committee may also delegate to the Company’s CEO or any other executive officer the authority to grant equity awards to employees of the Company who are not directors or officers of the Company.

Role of Executive Officers and the Compensation Consultant

The following summarizes the role of executive officers and the compensation consultant in determining and recommending the executive compensation program.

Executive Officers

Management provides perspectives of the business and people needs of the Company, which are applied in considering the pay benchmarking conducted by the compensation consultant;

The CEO, presents recommended pay adjustmentswith assistance from the Senior Vice President, Human Resources and Administration, and the Vice President, Compensation and Benefits, provides compensation recommendations to the Compensation Committee for the other Named Executive Officers (“NEOs”)(excluding the CEO) and other executive officers.executives based on a review of the current business environment, critical skills desired by the Company, internal pay comparisons and external market data (provided by the Committee’s compensation consultant at the Committee’s direction). The Committee reviews these recommendations, along with external market data and pay tally sheets, and then develops pay recommendations for the CEO position;Named Executive Officers and,

Management develops recommendations without seeking input from management, for the design of pay programs applicable to the NEOs and other executives.CEO.

The Compensation Committee may invite to its meetings any member of management including the CEO, and such other persons as it deems appropriate in order to carry out its duties and responsibilities. Depending onParticipants may include the nature of the topics, among the executive officers who, at the request of the Committee, may attend Committee meetings are the:

CEO, who typically attends all meetings (excluding executive sessions, which are attended only by only independent members of the Board and their advisors);

CFO, who provides the Company’s financial information used by the Committee to make decisions with respect to incentive compensation goals and related payouts;

Senior Vice President—President, Human Resources and Administration, who is responsible for leadingparticipates in many of the discussions regardingand provides background on the Company’s pay programs;

Vice President, Compensation and Benefits, who participates in many of the discussions and provides background on the Company’s pay programs, as needed; and

Corporate Secretary, who is responsible for recording the minutes at the meetings and attends all meetings (excluding executive sessions).

Compensation Consultant

The Compensation Committee has engaged Towers Perrin to serve as its independentoutside compensation consultant. Atconsultant by assisting the Committee, as requested, to fulfill various aspects of its charter. Specifically, at the request and direction of the Committee, Towers Perrin assists with the following:

Benchmarks pay practices among the peer group and provides a broader market perspective;

Assesses the design of individual pay elements and the total pay program relative to the Company’s objectives, market practices and other factors;

Assists the Committee in reviewing recommendations prepared by management; and

Provides the Committee with an independentoutside perspective and, as appropriate, specific recommendations on program design.

Towers PerrinThe consultant does not set pay; rather it provides guidance, based ondetermine compensation. Instead, the consultant presents market practices and, as appropriate, recommendations for consideration by the Compensation Committee. As established by its experience and understandingcharter, the Committee makes all pay decisions for officers. The Committee has directed the Towers Perrin consultants who work directly with the Committee to interact with management, only as needed, on behalf of the Committee. Towers Perrin also assists the Governance, Nomination and Organization Committee with respect to nonemployee director compensation. Pursuant to the Company’s needswritten policy governing the other services that the consultant can perform for the Company, the Committee may authorize Towers Perrin to do new work for the Company provided:

There are no other capabilities reasonably available; and objectives.

The work would not compromise the consultant’s independence with respect to compensation recommendations to the Committee.

The Compensation Committee Chair must approve in advance any proposed new work to be done by Towers Perrin for the Company. The Committee is provided with an all inclusive summary of the services provided by Towers Perrin to the Company semi-annually.

During 2007, Towers Perrin provided the following services to the Company unrelated to executive or nonemployee director compensation: actuarial consulting, retirement design and strategy and risk management services for aviation products and property exposures. The Committee does not believe that Towers Perrin’s role in providing these services to the Company compromises Towers Perrin’s ability to provide the Committee with an objective perspective.

Process and Meetings

The Committee has an annual meeting calendar to guide its review, analysis and administration of the executive compensation program. KeyThe Committee follows key process steps that are followed by the Committee include:

Directing the compensation consultant regarding its role, scope and process in assisting the Committee for a particular meeting;

Discussing and confirming the meeting agenda several weeks prior to each meeting;

Receiving meeting materials generally one week prior to the meeting; and

Discussing and analyzing any recommended changes, as proposed by management or, if directed by the Committee, the compensation consultant.

The Compensation Committee meets in executive session (withoutwithout any members of management and with and withoutmanagement. Executive sessions may or may not include participation by the independentoutside compensation consultant)consultant, as it deemsdeemed necessary or appropriate.appropriate by the Compensation Committee.

The charter of the Governance, Organization and Nominating Committee requires that the Committee be comprised of at least three members, all of whom meet the independence requirements of the NYSE. The Committee may invite to its meetings any member of management, including the CEO, and such other persons as it deems

appropriate in order to carry out its duties and responsibilities. The Committee meets in executive session as it deems necessary or appropriate. The Committee is currently comprised of five directors, all of whom are nonemployees and independent directors. After Ms. Ridgway’s retirement at the Annual Meeting, the Committee will be comprised of four directors. The Governance, Organization and Nominating Committee:

Reviews and makes recommendations to the Board of Directors with respect to the responsibilities and functions of the Board and Board committees;

Makes recommendations to the Board concerning the organization, structure, size and composition of the Board;

Makes recommendations concerning the compensation and benefits of directors;

Considers the names and qualifications of any candidates for the Board submitted by shareholders in accordance with the procedures set forth in the Company’s By-Laws;

Develops and recommends to the Board an annual self-evaluationperformance evaluation process for the Board;

Formulates corporate governance guidelines for approval by the Board and reviews the guidelines on a regular basis;

Makes recommendations to the Board concerning candidates for election as CEO and other corporate officers;

Conducts an annual self-evaluation;performance evaluation of the Committee;

Monitors and reviews at least annually the performance of the CEO and the Company’s plans for senior management succession;

Reviews and monitors the orientation and continuing education of Board members in light of the policy set forth in the Company’s Corporate Governance Principles; and

Considers possible conflicts of interest of Board members and corporate officers, including review and approval of transactions of the Company in excess of $120,000 in which a director, executive officer or an immediate family member of a director or executive officer has an interest.

In addition to the above, the Governance, Organization and Nominating Committee is responsible for making recommendations to the Board of Directors concerning nominees for election as directors and nominees for Board vacancies. To fulfill this role, the Committee reviews the organization, structure, size and composition of the Board to determine the qualifications and areas of expertise needed to further enhance the composition of the Board. When assessing a director candidate’s qualifications, the Committee will consider issues of expertise (including international experience and industry background), independence, integrity, diversity and age, as well as skills relating to operations, manufacturing, finance, marketing, technology and public policy. This is further described in the Company’s Corporate Governance Principles and the Committee’s charter. The Committee has not established specific minimum eligibility requirements for candidates other than integrity, the commitment to act in the best interests of all shareholders, requirements relating to age and ensuring that a substantial majority of the Board remains independent.

The Governance, Organization and Nominating Committee utilizes the services of search firms to help identify candidates for director who meet the qualifications outlined above. The search firm screens the candidates, conducts reference checks, prepares a biography of each candidate for the Committee to review and helps set up interviews.

The Governance, Organization and Nominating Committee will consider qualified candidates for director properly submitted by the Company’s shareholders. The Committee evaluates the qualifications of candidates properly submitted by shareholders on the same basis as those of other director candidates. Shareholders can suggest qualified candidates for director by writing to the Office of the Corporate Secretary, Boeing Corporate Headquarters,Offices, 100 North Riverside Plaza, 311A1, MC 5003-1001, Chicago, Illinois 60606-1596. Submissions should follow the procedures, including timing, set forth in the Company’s By-Laws and as described under Submission of Shareholder Proposals for 20082009 on page 73.79.

Role of the Compensation Consultant

The Governance, Organization and Nominating Committee has engaged Towers Perrin to serve as its independentoutside compensation consultant with respect to the compensation and benefits of directors. At the request and direction of the Committee, Towers Perrin assists with the following:

Benchmarks director pay practices among the peer group and provides a broader market perspective;

Assesses the design of individual director pay elements and the total director pay program relative to the Company’s objectives, market practices and other factors; and

Provides the Committee with an independentoutside perspective and, as appropriate, specific recommendations on director compensation program design.

Towers Perrin does not set director pay; rather it provides guidance, based on market practices and its experience and understanding of the Company’s needs and objectives. The CEO and Senior Vice President—President, Human Resources and Administration may attend Governance, Organization and Nominating Committee meetings whereat which director compensation is discussed.

The charter of the Finance Committee requires that the Committee be comprised of at least three members who are not members of management. The Finance Committee:

Reviews and makes recommendations concerning proposed dividend actions, stock splits and repurchases, and issuance of debt or equity securities;

Reviews strategic plans and transactions, including mergers, acquisitions, divestitures, joint ventures and other equity investments;

Reviews customer financing activities, business and related customer finance business and funding plans of the Company and its subsidiaries;

Reviews the Company’s significant financial exposures and contingent liabilities;

Reviews the overall Company risk management program and major insurance programs;

Reviews the Company’s credit agreements and short-term investment policies; and

Reviews the investment policies, administration and performance of the trust investments of the Company’s employee benefit plans.

The charter of the Special Programs Committee requires that the Committee be comprised of three or more directors. The Special Programs Committee reviews on a periodic basis those Company programs that the U.S. government has designated as classified for purposes of national security. Due to the amount of time necessary to obtain required government clearances, the Committee may operate with fewer than three members.

CORPORATE GOVERNANCE PRINCIPLES

In order to help shareholders understand the roles and responsibilities of the Board of Directors and the Company’s governance practices, the following is a description of the Company’s Corporate Governance Materials AvailablePrinciples and current practices. The Governance, Organization and Nominating Committee reviews these practices regularly.

Responsibilities of the Board

Role of the Board

The Company’s business is conducted by its employees, managers and corporate officers led by the Chief Executive Officer (“CEO”), with oversight from the Board. The Board selects the CEO and works with the CEO to elect/appoint other corporate officers who are charged with managing the business of the Company. The Board has the responsibility of overseeing, counseling and directing the corporate officers to ensure that the long-term interests of the Company and its shareholders are being served. The Board and the corporate officers recognize that the long-term interests of the Company and its shareholders are advanced when they take into account the concerns of employees, customers, suppliers and communities.

Board Responsibilities

The basic responsibility of the directors is to exercise their reasonable business judgment on behalf of the Company. In discharging this obligation, directors rely on, among other things, the Company’s corporate officers, outside advisors and auditors.

The Board’s general oversight responsibilities include, but are not limited to, the following: (1) evaluate the CEO’s performance and review the Company’s succession plan for the CEO and other elected officers; (2) review the long-range business plans of the Company and monitor performance relative to achievement of those plans; (3) consider long-range strategic issues and risks to the Company; and (4) approve policies of corporate conduct that continue to promote and maintain the integrity of the Company. In addition, the Board shall be knowledgeable about the content and operation of Boeing’s ethics and compliance program, and shall exercise reasonable oversight with respect to its implementation and effectiveness.

CEO Performance Evaluation

At the end of each year, the CEO presents his performance objectives for the upcoming year to the nonemployee directors for their approval. The nonemployee directors then meet privately to discuss the CEO’s performance for the current year against his current performance objectives; they review that evaluation with the CEO. The Compensation Committee uses this performance evaluation in the course of its deliberations when considering the CEO’s compensation in accordance with the policies and procedures in that Committee’s charter.

CEO and Management Succession

The Board views CEO selection and management succession as one of its most important responsibilities. The CEO reports annually to the Governance, Organization and Nominating Committee on planning for CEO succession. The Board also reviews and monitors the plan of succession for elected officers. When succession of the CEO occurs, this Committee manages the process of identifying and selecting the new CEO with the full participation of each of the nonemployee directors.

It has been the policy of the Company that the Board should determine whether the positions of CEO and Chairman should be held by the same person. The Board believes that it is in the best interests of the Company to make such a determination when it elects a new CEO. Because the CEO currently holds the position of Chairman, the Board has appointed a lead director.

Ethics and Conflicts of Interest

The Board expects the directors, officers and employees to act ethically at all times and acknowledge their adherence to the policies comprising the Company’s codes of ethical conduct. Shareholders may access a copy of each code of ethical conduct on the Company’s website atwww.boeing.com/corp_gov/. The Board will promptly

disclose any waivers from the Company’s Code of Ethical Business Conduct, which applies to the Board. If an actual or potential conflict of interest arises for a director, the director shall promptly inform the Chairman of the Board or the Chairperson of the Governance, Organization and Nominating Committee. All directors will recuse themselves from any discussion or decision affecting their personal, business or professional interests. If the Board exercises its right to grant a waiver from the Company’s Code of Ethical Conduct for any officer or other employee, such waiver shall also be promptly disclosed. The Company shall not, directly or indirectly, extend or maintain credit, arrange for or renew an extension of credit in the form of a personal loan to or for any director or executive officer.

Board’s Interaction With Stakeholders

The CEO and other corporate officers are responsible for establishing effective communications with the Company’s stakeholders, including shareholders, customers, communities, employees, suppliers, creditors, governments and corporate partners. It is the policy of the Board that management speaks for the Company. This policy, however, does not preclude independent directors from meeting with stakeholders, but it is the norm that, where appropriate, directors notify and consult with management before any such meetings.

The Board of Directors has established a process whereby shareholders and other interested parties can send communications to the Lead Director or to the nonmanagement directors as a group. This process is described in detail on the Company’s website atwww.boeing.com/corp_gov/email_the_board.html.

Board Composition

Board Size and Composition

At least 75% of the Board shall meet the NYSE criteria for independence or be nonemployee directors. Shareholders may access a copy of the Company’s Director Independence Standards on the Company’s website atwww.boeing.com/corp_gov/. The Governance, Organization and Nominating Committee reviews annually the appropriate skills and characteristics required of Board members in light of the current make-up of the Board. This assessment includes issues of expertise (including international experience and industry background), independence, integrity, diversity and age, as well as skills relating to operations, manufacturing, finance, marketing, technology and public policy. The Committee has not established specific minimum eligibility requirements for Board members other than integrity, the commitment to act in the best interests of all shareholders, requirements relating to age and ensuring that a substantial majority of the Board remains independent.

Selection of Directors

The shareholders of the Company vote on the nominees, as proposed by the Board, for election as directors at the annual meeting of shareholders. Shareholders may propose director nominees in accordance with the procedures set forth in the Company’s By-Laws and the charter of the Governance, Organization and Nominating Committee. The screening process for nominees is handled by the Governance, Organization and Nominating Committee in accordance with the policies and principles in its charter with direct input from the other directors. Between the annual meetings of shareholders, the Board has authority under the By-Laws to fill vacant positions and to determine in which class that director should be placed.

Effect of a Failure to Receive a Majority of the Votes in Director Elections

In accordance with the Company’s By-Laws, if none of the Company’s shareholders provides the Company notice of an intention to nominate one or more candidates to compete with the Board’s nominees in a director election, or if the Company’s shareholders have withdrawn all such nominations on or prior to the tenth day preceding the date the Company mails its notice of meeting to shareholders, a nominee must receive more votes cast for than against his or her election or re-election in order to be elected or re-elected to the Board. The Board shall nominate for re-election as directors only incumbent candidates who tender, prior to the mailing of the proxy statement for the annual meeting at which they are to be re-elected as directors, irrevocable resignations that will be effective upon (i) the failure to receive the required vote at any annual meeting at which they are nominated for re-election and (ii) Board acceptance of such resignation. In addition, the Board shall fill director vacancies and new directorships only with candidates who tender, at or prior to the time of their appointment to the Board, the same form of resignation tendered by other directors in accordance with this Guideline.

The Governance, Organization and Nominating Committee (or such other committee as the Board may appoint) shall make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board shall act on the tendered resignation, taking into account the recommendation of such committee, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered resignation within 90 days from the date of the certification of the election results. The committee in making its recommendation, and the Board in making its decision, may each consider any factors or other information that it considers appropriate and relevant, including whether the acceptance of any resignation would cause the Company to fail to comply with any requirement of the New York Stock Exchange or any rule or regulation promulgated under the Securities Exchange Act of 1934. The director whose resignation is under consideration shall not participate in the recommendation of the committee with respect to his or her resignation. If such incumbent director’s resignation is not accepted by the Board, the director shall continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If a director’s resignation is accepted by the Board, then the Board, in its sole discretion, may fill any resulting vacancy or may decrease the size of the Board.

Lead Director

The Board has selected an independent director to serve as Lead Director. The Lead Director is elected annually by a majority of the independent directors upon a recommendation from the Governance, Organization and Nominating Committee.

The Board has determined that the Lead Director should have the following specific duties and responsibilities:

Outside Board Memberships

The CEO and other elected officers must seek the approval of the Governance, Organization and Nominating Committee before accepting outside board memberships with for-profit entities. While the Company acknowledges the value in having directors and officers with significant experience in other businesses and activities, each director is expected to ensure that other commitments, including outside board memberships, do not interfere with their duties and responsibilities as a member of the Company’s Board. Directors should notify the Governance, Organization and Nominating Committee before accepting an invitation to serve on another board to enable the Company to consider whether (1) any regulatory issues or potential conflicts are raised by the director accepting such an invitation and (2) the director will have the time required for preparation, participation and attendance at Board meetings. Directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Company’s Board and other directors should not serve on more than four other boards of public companies in addition to the Board.

Director Retirement

Each nonemployee director must retire at the annual meeting following his or her 72nd birthday. Directors who change the occupation they held when initially elected are expected to offer to resign from the Board. At that time, the Governance, Organization and Nominating Committee reviews the continued appropriateness of Board membership under the new circumstances. Unless waived by the Board, the Board has adopted a policy calling for employee directors, including the CEO, to retire from the Board at the time of a change in his or her status as an officer of the Company.

Director Compensation and Stock Ownership

It is the general policy of the Board that nonemployee directors’ compensation should be a mix of cash and equity-based compensation with a significant portion of such compensation in the form of the Company’s stock or stock-equivalent units. Nonemployee directors receive a substantial portion of their compensation in deferred stock units, which must be held until retirement or other termination of Board service. Each nonemployee director should hold by the end of his or her third year as a director stock or stock-equivalent units (including deferred stock units) with a value equal to three times the annual cash retainer fee and by the end of his or her sixth year as a director stock or stock-equivalent units (including deferred stock units) with a value equal to five times the annual cash retainer fee. The components of director compensation are disclosed in the Company’s Proxy Statement, a copy of which may be accessed on the Company’s website atwww.boeing.com/companyoffices/financial/.

The form and amount of director compensation will be determined by the Governance, Organization and Nominating Committee. The Committee regularly reviews and compares the Company’s Board compensation to director compensation at peer companies that are also benchmarks for the Company’s executive compensation program. Independent directors may not receive, directly or indirectly, any consulting, advisory or other compensatory fees from the Company. Directors who are employees of the Company do not receive any compensation for their service as directors.

Board and Committee Meetings

Board Agenda and Meetings

The CEO and the committee chairpersons establish the agendas for Board and committee meetings. The Lead Director shall review the Board and committee agendas, as appropriate. Each director is free to suggest items for the agenda, and each director is free to raise at any Board meeting subjects that are not on the agenda for that meeting. Information and data that are important to the Board’s understanding of the matters to be covered at a Board meeting will be distributed to the directors before the meeting. Directors should review in advance any materials sent to them in order to take part in a meaningful deliberation at the meeting. Directors are expected to attend all Board meetings, as well as the annual meeting of shareholders.

Executive Sessions

The nonemployee directors have the opportunity to meet in executive session to consider such matters as they deem appropriate, without management being present, as a regularly scheduled agenda item for every Board meeting. Among the items that the nonemployee directors meet privately in executive sessions to review is the performance of the CEO and recommendations of the Compensation Committee concerning compensation for employee directors and other elected officers. The Lead Director acts as the chair of the executive sessions of the nonemployee directors.

Director Access to Officers and Employees

Directors have full and free access to officers and employees of the Company.

Committees of the Board

The Board has the following five committees: Audit, Compensation, Finance, Special Programs, and Governance, Organization and Nominating. All members of the Audit, Compensation, and Governance, Organization and Nominating Committees of the Board shall be nonemployees and meet the criteria for independence of the NYSE. Chairpersons and members of these five committees are rotated regularly, as appropriate. Members of the Audit Committee regularly meet privately with representatives of Deloitte & Touche LLP, the Company’s independent auditors, and with the Company vice president responsible for carrying out the internal audit function. The Audit Committee shall report to the Board, no less than annually, with respect to the implementation and effectiveness of Boeing’s ethics and compliance program to support the Board’s oversight responsibility.

Each committee has a written charter, approved by the Board, which describes the committee’s general authority and responsibilities. Shareholders may access a copy of each committee charter on the Company’s website atwww.boeing.com/corp_gov/. The committee chair reports on the items discussed and actions taken at their

meetings to the Board following each committee meeting. Committee materials are provided to the committee members in advance of the meeting so as to allow members time to prepare for a discussion of the items at the meeting. Each committee undertakes an annual review of its charter and works with the Board to make appropriate revisions. The Board may, from time to time, establish and maintain additional committees. Members of the Board’s committees are expected to attend all meetings.

Independent Advice

The Board and its committees may seek legal, financial or other expert advice from a source independent of management.

Confidential Voting

It is the Company’s policy that all proxy, ballot and voting materials that identify the vote of a specific shareholder on any matter submitted for a vote of shareholders will be kept secret from directors and officers of the Company, except (1) when disclosure is required by applicable law or regulation, (2) when a shareholder expressly requests such disclosure, or (3) in a contested proxy solicitation if the shareholder is an employee of the Company or a participant in the Company’s stock fund or one of its retirement, savings or employee stock ownership plans, the information will not be disclosed to management unless clause (1) or (2) above applies.

Board and Committee Performance Evaluation

With the goal of increasing the effectiveness of the Board and its relationship to management, the Governance, Organization and Nominating Committee evaluates the Board’s performance as a whole. The evaluation process, which occurs annually, includes a survey of the individual views of all directors, which are then shared with the full Board. In addition, each of the committees performs a similar annual self-evaluation.

Director Orientation and Continuing Education

All new directors must participate in the Company’s Orientation Program, which should be conducted within six months of election. This orientation will include presentations by senior management to familiarize new directors with the Company’s strategic plans, significant financial, accounting and risk management issues, compliance programs, the Code of Ethical Business Conduct, its principal officers, and internal and independent auditors. In addition, the Orientation Program will include visits to Company headquarters and, to the extent practical, the Company’s significant facilities. A third-party continuing education program will be scheduled in conjunction with Board or committee meetings, as appropriate. In addition, Board members shall receive training on at least an annual basis in conjunction with regularly scheduled Board meetings, on topics relating to corporate governance policies and roles and responsibilities of Board members. Board members shall have at least one annual on-site visit to a Boeing Websiteoperating unit, familiarizing Board members on operations of that unit and facilitating direct interaction between Board members and operating personnel as appropriate. All directors are also encouraged to attend, at the Company’s expense, director continuing education programs offered by various organizations. The Corporate Secretary will inform the directors of such educational opportunities.

Shareholder Rights Plan

Boeing does not have a shareholder rights plan and has no present intention to adopt one. Subject to its continuing fiduciary duties, which may dictate otherwise depending on the circumstances, the Board shall submit the adoption of any future rights plan to a vote of the shareholders. Any shareholder rights plan adopted without shareholder approval shall be approved by a majority of the independent members of the Board. If the Board adopts a rights plan without prior shareholder approval, the Board shall, within one year, either submit the plan to a vote of the shareholders or redeem the plan or cause it to expire. If the rights plan is not approved by a majority of the votes cast on this issue, the plan will immediately terminate.

Clawback Policy

The Board shall, in all appropriate circumstances, require reimbursement of any annual incentive payment or long-term incentive payment to an executive officer where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a substantial restatement of Company financial statements

filed with the Securities and Exchange Commission; (2) the Board determines the executive engaged in intentional misconduct that caused or substantially caused the need for the substantial restatement; and (3) a lower payment would have been made to the executive based upon the restated financial results. In each such instance, the Company will, to the extent practicable, seek to recover from the individual executive the amount by which the individual executive’s incentive payments for the relevant period exceeded the lower payment that would have been made based on the restated financial results. For purposes of this policy, the term “executive officer” means any officer who has been designated an executive officer by the Board.

GOVERNANCE MATERIALS AVAILABLE ON THE BOEING WEBSITE

Our Corporate Governance Principles are reviewed regularly and revised in response to changing regulatory requirements, evolving best practices and the concerns of our shareholders. Our Corporate Governance Principles are posted on the Corporate Governance section of our website atwww.boeing.com/corp_gov/.and are included in this Proxy Statement beginning on page 17.

In addition to our Corporate Governance Principles, other information relating to corporate governance at Boeing is available on the Corporate Governance section of our website, including:

Biographies for each of the membersmember of our Board of Directors;

A description of the Lead Director’s duties and responsibilities;

The Board’sCompany’s Director Independence Standards;

The charters of each of the Board committees;

The Company’s Codescodes of Business Conductconduct for Directors,directors, for all Employeesemployees and for Finance Employees;finance employees;

The Company’s Certificate of Incorporation and By-Laws;

Information about how shareholders can communicate with the Board of Directors and the Chair of the Audit Committee; and

Information regarding securities transactions by directors and officers.

In addition, a copy of our Corporate Philanthropy Report, detailing the Company’s philanthropic activities and contributions in 2006,2007, is available on the Global Corporate Citizenship section of our website atwww.boeing.com/companyoffices/aboutus/community/index.html. A copy of our Ethical Business Conduct Guidelines, which includes a description of our policy regarding political contributions, is available on the Ethics section of our website atwww.boeing.com/companyoffices/aboutus/ethics/ethics_booklet.pdf.

We will provide any of the foregoing information in print without charge upon written request to the Office of the Corporate Secretary, Boeing Corporate Headquarters,Offices, 100 North Riverside Plaza, 311A1, MC 5003-1001, Chicago, Illinois 60606-1596.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee are named in the Committee Membership section on page 10. No members of the Compensation Committee were officers or employees of Boeing or any of its subsidiaries during the year, were formerly Boeing officers or had any relationship otherwise requiring disclosure.

DIRECTOR COMPENSATION

20062007 DIRECTOR COMPENSATION TABLE

The following table sets forth information regarding compensation for each of the Company’s nonemployee directors for 2006.2007. The Company’s nonemployee director compensation program is comprised of cash (board and committee annual retainer fees) and equity (deferred stock unit awards). Directors who are employees of the Company do not participate in the Company’s compensation program for nonemployee directors.

Daley, 1,955 units; Kenneth M. Duberstein, 25,857 units; John F. McDonnell, 14,145 units; Richard D. Nanula, 4,706 units; Rozanne L. Ridgway, 31,902 units; Mike S. Zafirovski, 6,021 units; and John M. Shalikashvili, 10,141 units.

Cash Compensation

In 2006,2007, nonemployee directors received a cash Annual Board Retainer Fee of $60,000$75,000 per year. The Lead Director received an additional annual retainer fee of $15,000. Nonemployee directors who served as chairs of the Audit Committee and the Compensation Committee received an additional annual retainer fee of $10,000, and nonemployee directors who served as chairs of the Governance, Organization and Nominating Committee, the Finance Committee and the Special Programs Committee received an additional retainer fee of $5,000. The Company does not pay additional fees for attending Board or committee meetings. All retainer fees are paidpayable quarterly, onas of the first day of January, April, July and October. The Company reimburses nonemployee directors for actual travel and out-of-pocket expenses incurred in connection with their services.

On August 28, 2006, the Governance, Organization and Nominating Committee completed a review of compensation for nonemployee directors. In performing this review, the Committee worked with an independent executive compensation consultant for advice and perspective regarding peer group practices (using the same companies that were used to benchmark executive compensation) and broader market trends. As a result of this review, the Committee recommended and the Board of Directors adopted an increase in the cash Annual Board Retainer Fee for nonemployee directors to $75,000 per year, effective January 1, 2007. Additional retainer fees for the Lead Director and for committee chair positions and the other elements of the nonemployee director compensation program described below will remain the same in 2007 as they were in 2006.

Deferred Compensation

Nonemployee directors may defer all or part of their cash compensation into an interest-bearing cash-based account or as deferred stock units (an unfunded stock unit account) under the Company’s Deferred Compensation Plan for Directors. The number of units is calculated by dividing the amount of the deferred fees by the Fair Market Value of Boeing stock on each of the four quarterly dates on which the Annual Board Retainer Fee is paid. Directors do not have the right to vote or transfer deferred stock units. Deferred stock units earn the equivalent of dividends, which are credited as additional deferred stock units and will be distributed as shares of Boeing stock after retirement or other termination of Board service. For the 20062007 deferrals, the Fair Market Value on each of January 3, April 3,2, July 32 and October 2, 20061, 2007 was $69.97, $78.57, $81.31$89.38, $88.55, $96.66 and $79.56,$106.11, respectively, and directors deferred cash compensation into deferred stock units as follows: John E.Mr. Bryson, $60,000$75,000 for 778792 units; Linda Z.Mr. Collins, Jr., $56,250 for 582 units; Ms. Cook, $60,000$75,000 for 778792 units; William M.Mr. Daley, $45,000$75,000 for 564792 units; Kenneth M.Mr. Duberstein, $85,000$100,000 for 1,0951,056 units; Richard D. Nanula, $60,000Gen. Jones, $18,750 for 778177 units; Rozanne L.Mr. Liddy, $18,750 for 177 units; Ms. Ridgway, $65,000$80,000 for 843845 units; John M. Shalikashvili, $8,125Mr. Zafirovski, $80,000 for 110845 units; and Mike S. Zafirovski, $65,000Mr. Nanula, $37,500 for 843422 units.

Stock-Based Compensation

Each nonemployee director who continues to serve as a director following each annual meeting is granted a retainer stock unit award, with the number of units equal to the number of shares of Boeing stock that could be purchased with an aggregate of $130,000. The number of retainer stock units awarded is based on the Fair Market Value of Boeing stock on each of the four quarterly dates on which the Annual Board Retainer Fee is paid. For 2006,2007, a total of 1,6861,373 retainer stock units were awarded to each director, except William M. Daley,Mr. Collins, who received 1,3761,138 units after joining the Board of Directors on February 26, 2006, and John M. Shalikashvili,27, 2007; Gen. Jones, who received 878679 units before retiringafter joining the Board on June 21, 2007; Mr. Liddy, who received 420 units after joining the Board on August 28, 2007; and Mr. Nanula, who received 731 units prior to his resignation from the Board on May 1, 2006.4, 2007. The retainer stock units are credited to the director’s account (an unfunded stock unit account) in the Company’s Deferred Compensation Plan for Directors and are immediately vested. Directors do not have the right to vote or transfer retainer stock units. Retainer stock units earn the equivalent of dividends, which are credited as additional retainer stock units. Retainer stock units will be distributed as shares of Boeing stock after retirement or other termination of Board service.

Before 2005, nonemployee directors received annual option grants, with an exercise price equal to the average of the Fair Market Values for the fifth through ninth business days following the date of grant, which was the date of the Annual Meeting for years prior to 2005.Meeting. The options have a term of ten years and generally become exercisable in installments of one, three and five years after the date of grant. If a director’s service is terminated due to retirement, disability or death, exercisability of the options will be accelerated.

As noted in the Company’s Corporate Governance Principles, the Board of Directors has approved stock ownership guidelines that provide that each nonemployee director should attain during his or her first three years as a director an investment position in the Company’s stock (including deferred stock units) equal to three times the Annual Board Retainer Fee and by the end of his or her sixth year as a director an investment equal to five times the Annual Board Retainer Fee. All directors who have served three years or six years meet these guidelines.

20062007 AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors serves as the representative of the Board for general oversight of the Company’s financial accounting and reporting, systems of internal control, audit process, and monitoring compliance with laws and regulations and standards of business conduct. The Board has adopted a written charter for the Audit Committee. Management of the Company has responsibility for preparing financial statements of the Company as well as for the Company’s financial reporting process. Deloitte & Touche LLP, acting as independent auditor, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles in the United States.

In this context, the Audit Committee hereby reports as follows:

Each member of the Audit Committee meets the independence and financial literacy requirements of the SEC and the NYSE. Mr. Biggs and Mr. Nanula are theNYSE, is an audit committee financial expertsexpert under SEC rules and havehas accounting or related financial management expertise and are independent under applicable NYSE listing standards.

Mr. Collins does not appear as a signatory to the Audit Committee Report because he was not a member of the committee in 2006.expertise.

Audit Committee

John H. Biggs, Chair

Arthur D. Collins, Jr.

Linda Z. Cook

Richard D. NanulaJames L. Jones

Mike S. Zafirovski

INDEPENDENT AUDITORSAUDITOR FEES REPORT

The aggregate fees billed by Deloitte & Touche LLP, our independent auditors,auditor, in fiscal years 20062007 and 20052006 were as follows:

All of the above services (audit, audit-related and tax) are pre-approved by the Audit Committee (the “Committee”).

In addition, in each of 2007 and 2006, fees totaling $1.3 million and $1.4 million for fiscal years 2006 and 2005, respectively, have been paid to Deloitte & Touche LLP for employee benefit plan fees charged directly to the plan. Employee benefit plan fees charged directly to the plan do not require pre-approval of the Committee but were pre-approved in 2006.2007.

The Committee has considered whether the provision of non-audit services is compatible with maintaining the independence of our independent auditors.auditor.

The Committee has adopted a policy governing its pre-approval of audit and non-audit services to be provided by the Company’s independent auditor, Deloitte & Touche LLP, in order to facilitate compliance with the requirements of the Sarbanes-Oxley Act of 2002. Permitted audit services may include, among other things, audit, review or attest services required under the securities laws, opinions on the Company’s financial statements and internal control systems and processes, comfort letters and other services performed to fulfill the independent auditorsauditor’s responsibility under generally accepted auditing standards. Permitted non-audit services may include, among other things, consultations and tax services.

Pursuant to this policy, the Office of the Corporate Controller will obtain the Committee’s pre-approval of audit and non-audit services to be provided by the independent auditor on an annual basis. Committee pre-approval is also required for additional audit and/or non-audit services outside the scope of previously approved services in the event the fees for such additional services are equal to or greater than $250,000. On a quarterly basis, the Office of the Corporate Controller will provide written updates to the Committee showing audit and non-audit services, the amount of audit and non-audit service fees incurred to date, and the estimated cost to complete such services.

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding beneficial ownership of Boeing stock, as of February 28, 2007,29, 2008, of each director, the Company’s Named Executive Officers, and directors and executive officers as a group, and also sets forth stock units and interests held pursuant to the Company’s compensation and benefit plans or pursuant to a contract or arrangement. While these interests may not be transferred, some are vested.

All numbers are rounded to the nearest whole share. No family relationship existed among any of the directors or executive officers of the Company.

(4)

This includes the following shares with respect to which the following persons have the right to acquire beneficial ownership within 60 days of the date of this table by exercise of stock options.options:

SECURITY OWNERSHIP OF MORE THAN 5% SHAREHOLDERS

The following table sets forth information regarding beneficial ownership of the ownersowner of more than 5% of the outstanding Boeing stock as of December 31, 2006.2007.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and certain of its officers to send reports of their ownership of Boeing stock and of changes in such ownership to the SEC and the NYSE. SEC regulations also require the Company to identify in this proxy statementProxy Statement any person subject to this requirement who failed to file any such report on a timely basis. Based on the Company’s review of the reports it has received, the Company believes that all of its directors and officers complied with all the reporting requirements applicable to them with respect to transactions during 2006,2007, except that one report of deferred compensation was inadvertently filed late for each of the following current and former officers: Messrs. Carson, De Leon, Mulally, Pickering and Tracy, and two reports were inadvertently filed late for each of Messrs. Hill and McNerney.Shephard W. Hill.

COMPENSATION OF EXECUTIVE OFFICERS

COMPENSATION DISCUSSION AND ANALYSIS

Overview

This Compensation Discussion and Analysis presents information about the compensation of our senior executives, including the executives includedofficers named in the Summary Compensation Table beginning on page 35. These executives are referred to as the Named42 (the “Named Executive Officers (“NEOs”Officers” or “NEOs”). It also gives information about significant changes in our executive compensation policies and practices in 2006.

Our executive compensation program is establisheddesigned to promote a strong culture of leadership development, aligned with performance improvement (focused on both growth and overseen by the Compensation Committeeproductivity) and integrity, which in turn drives financial performance that provides value to our stakeholders. The main components of the Board of Directors. The Committee reviews and approves all elements of the executive compensation program. The Committee also reviews and approves business goals and objectives relevant to executive compensation, evaluates the performance of the Chief Executive Officer (“CEO”) in light of those goals and objectives, and determines and recommends the CEO’s compensation level to independent members of the Board based on this evaluation.

The Compensation Committee works with an independent executive compensation consultant for advice and perspective regarding market trends that may impact decisions the Company makes about its executive compensation program and practices. Management has the responsibility for effectively implementing the executive compensation program. Additional information about the role and processes of the Committee is presented under Compensation Committee beginning on page 12.

Changes to Executive Compensation Program in 2006

We made several changes to our executive compensation program that took effect in 2006 (based on the objectivesinclude base salary and guiding principles presented below), including some modifications to the annual and long-term incentives (total direct compensation). Our incentive programs. Beginning with the 2006 performance year, annual incentives earned each year will beprogram is designed to emphasize a pay-for-performance relationship since any payouts are based on Company and individual performance.

Executive Compensation Philosophy

Highly Qualified Employees

The Company’s long-term success will be shaped by our people. We strive to ensure our employees’ contributions and long-term stock price appreciation. The program is more consistent with peer group practices by delivering long-term incentive award opportunities through a combination of awards, each of which has a meaningful weighting.

Objectivesperformance are recognized and Guiding Principles

Our executive compensation program supports the objective of enhancing shareholder valuerewarded through a competitive program that attracts world-class talent and rewards executives for demonstrating strong leadership and delivering results. As such, ourcompensation program. Our executive compensation program is designed to:to enhance shareholder value, while attracting and retaining world-class talent at all organizational levels, and rewarding executives for strong leadership and performance.

Pay for Performance

We target an executive compensation package that is competitive against the market in which we compete for talent. A majority of an executive’s annual target total compensation package is variable at-risk compensation tied to performance (i.e., internal financial, stock price and individual performance). This principle means if performance is at or above targeted levels, the executive’s total compensation will be at or above targeted levels. Conversely, if performance is below targeted levels, total compensation will be below targeted levels.

Objectives and Guiding Principles

The following objectives and guiding principles shape the design and administration of our executive compensation program:

We believe that our executive compensation program, which is comprised

Elements of the Executive Compensation ProgramDesign

Below is a summary of the key elements and characteristics of our executive compensation program:

Market Benchmarking and Positioning

Peer Group

Executive compensation is benchmarked relative to a comparison group of leading aerospace and manufacturing companies (“peer group”) that have a technology focus, global operations, a diversified business, and annual sales and market capitalizations comparable to Boeing. Each year the Compensation Committee reviews the peer group and determines whether any changes should be made. The 2006 peer group spanned several Standard & Poor’s industry sectors and was composed of the following 24 companies:

3M

AT&T

Caterpillar

ChevronTexaco

ConocoPhillips

Dell

DuPont

Exxon Mobil

Ford

General Dynamics

General Electric

General Motors

Hewlett-Packard

Honeywell

IBM

Intel

Lockheed Martin

Marathon Oil

Motorola

Northrop Grumman

Pfizer

Raytheon

United Technologies

Verizon Communications

Peer group practices are analyzed annually for total direct compensation (salary and annual and long-term incentives), and periodically for other pay elements (such as benefits and perquisites).

Executive Pay Levels

We assign all executives to pay grades by comparing position-specific duties and responsibilities with market data and our internal management structure. Each pay grade has a salary range with corresponding target annual and long-term incentive award opportunities, benefits and perquisites. Generally, there are minor changes in target compensation from year-to-year.

In setting executive pay, we target total direct compensation to be competitive with peer group practices. Executive compensation levels are set to be at the middle of the market among our peer group. The pay positioning of individual executives will vary based on their competencies, skills, experience and performance, as well as organizational structure and internal pay relationships. In 2006, each NEO’s salary and target annual and long-term incentive award opportunities were consistent with compensation opportunities offered at the peer group companies. Actual total compensation earned may be more or less than target based on Company and individual performance results during the performance period.

Pay-Setting Process

The following factors are considered in setting and adjusting executive compensation:

In developing the pay programs and levels for NEOs and other executives, the independent executive compensation consultant presents peer group pay practices and other relevant benchmarks to the Compensation Committee and management. The Committee also reviews comprehensive pay tally sheets for the NEOs. The pay tally sheets are prepared by the independent executive compensation consultant and provide total annual compensation (for the current year and for the following year, based on expected pay adjustments), accumulated wealth (value of equity holdings, outstanding long-term incentives, deferred compensation and pension), and estimated compensation under various termination scenarios.

The Committee sets the pay for the CEO and reviews and approves all NEO and other officer pay arrangements. The CEO develops pay recommendations for other officers, including the NEOs, and is assisted in pay administration by the Senior Vice President—Human Resources and Administration.

Emphasis on At-Risk Pay Versus Salary

Consistent with the Company’s objectives, performance-based pay, particularly long-term incentives, is emphasized in determining pay packages. As such, the majority of the NEOs’ total direct compensation is at risk (on average, 80%). The total direct compensation number from which this percentage was calculated is presented in the Summary Compensation Table (in the “Salary” and “Non-Equity Incentive Plan Compensation” columns) and the 2006 Grants of Plan-Based Awards table (target level for Performance Award and, for stock options, the “Grant Date Fair Value of Stock and Option Awards” column) on pages 35 and 37, respectively. Actual value realized from Performance Awards could be zero if the minimum performance level for payouts is not met. Threshold performance for incentive awards is described later in this report.

Determination of Executive Compensation

In setting total direct compensation, a consistent approach is generally applied for all executive officers. Exceptions to normal practice are made based on critical business and people needs.

Base Salary

Base salaries provide for competitive pay based on the market value of the position and meet the objective of attracting and retaining the talent needed to run the business. Salaries are reviewed annually. Salary increases may be given based on individual factors, such as competencies, skills, experience, and performance, and market practices. There are no specific weightings assigned to these individual factors. Annual salary increases are generally effective in March. Promotional increases may also take placebe given when executives assume new roles are assumed.roles.

Mr. McNerney’s minimum base salary of $1.75 million was established by his employment agreement in July 2005, and based on the Committee’s review of competitive market data it was not adjusted in 2006. The Summary Compensation Table presents the NEOs’ salaries earned during 2006.

Incentive Plan Performance Measures and GoalsMetric

The Company’s 2006 incentive award opportunities, which are earned only if performance results are achieved, consisted of the following:

We have selecteduse economic profit as the financial metric for executive annual incentives and Performance Awards because it is a measure that shows not only how much a business earns, but also how well it uses its net assets to support its operations to generate revenue. EconomicAwards. Specifically, the economic profit grows not merely by increasing revenues, but also by reducing costs and optimizing net assets. This is done through more efficient processes, cost containment and minimized inventory, among many other ways. Economic profit is aligned with enterprise financial performance targets established bymetric utilized throughout our Company. Economic profit is also the financial metricincentive compensation programs for our broad-based, non-executive employee annual incentive plan.

Economic profit measures our ability to generate earnings after covering a capital charge for net assets. Specifically, economic profitemployees at all organizational levels equals:

Annual incentive awards and Performance Awards are determined on the basis of pre-established objectives that are set and approved by the Compensation Committee prior to the beginning of the performance period. Specific economic profit goals cannot be changed during the performance period. After the end of the performance period, the Compensation Committee (the “Committee”) may choose to exclude certain non-recurring items to ensure that are outsideaward payments represent underlying growth and performance of the normal course ofcore business. Economic profit measures our ability to generate earnings after covering the capital expenses associated with our net assets. Economic profit represents a challenging performance metric because it reflects not only how much a business unusual and/or infrequent,earns, but also how well it uses its net assets to support its operations to generate revenue. Economic profit grows not merely by increasing revenues, but also by reducing costs and not reflective ofoptimizing net assets. Economic profit growth is accomplished through more efficient processes, cost containment and minimized inventory, and other actions taken by management.

Economic profit is aligned with the Company’s core operatingenterprise financial performance targets established by our Company and is also the sole financial metric for our broad-based, annual non-executive employee incentive plan. This alignment between the executive and non-executive populations ensures that period. Any adjustments made will be based on the Committee’s judgment.

The performance period is one year for the Annual Incentive Plan and three years for the long-term Performance Awards. Performance levels are set taking into account business conditions, expectations regarding the probability of achievement, and the desire to incorporate a degree of “stretch” to pushall employees in the Company to achieve a higher level of performance. Specific probabilities of achievement are not assigned toconnected and working toward the performance levels. Consistent with our philosophy and approach to setting goals, payouts that are above target will be for superior performance (results that exceeded our business plan).same financial goals.

Annual Incentive Plan

The Annual Incentive Plan is designed to motivate and reward NEOs and all other executives based on the achievement of specific Company and individual goals for the performance year. Executives are assigned a target incentive award based on their pay grade. Actual incentive awards are modifieddetermined by anCompany and individual and Company performance score. Individual scores can range from 0.0 to 2.0 (target(with targets of 1.0) and reflect performance against business goals and objectives, value of contributions relative to peers, overall business unit or functional performance, and a leadership assessment. Company scores can range from 0.0 to 2.0 (target of 1.0) and are based on annual economic profit results. The Company score for executive annual incentives is the same score that is used

to determine payouts for non-executive employees under the Company’s broad-based annual incentive plan. Company scores below 0.5 resultpaid 100% in no payout to executives for the performance period; however, non-executive employees may still be eligible to receive a payout. Individual awards cannot exceed 200% of an executive’s target incentive award. Awards are paid in cash following the year in which they are earned (i.e., awards earned for 2006 performance were paid in March 2007).

cash. The mechanics of ourthe 2007 Annual Incentive Plan arewere as follows:

The target annual incentive award percentages assigned to the NEOs for 2006 were the following:

For 2006, management presented financial results and the CompensationThe Committee determined that the Company’s economic profit after adjustments noted below was above plan. This resulted in a Company score of 1.2, which was above the target of 1.0. The above targetapproves all individual performance was the result of double-digit revenue growth, continued productivity improvements and record commercial airplane orders and total backlog which impacted cash flow and net assets. Consistent with past practices, adjustments were made to ensure that award payments under the Company’s executive and employee incentive plans represent the underlying growth and performance of the core business. For 2006, the Committee adjusted economic profit performance to eliminate the financial impact of the decision to exit the Connexion by Boeing business, the global settlement with the U.S. Department of Justice, the acquisition of Aviall, Inc., and the balance sheet impact related to new accounting rules for pension and other post-retirement benefits, together with the annual remeasurement of our pension plans. Actual 2006 economic profit after these adjustments was $2.6 billion versus a 2006 target of $2.4 billion.

The actual awardsscores for the NEOs and other officers and has the discretion to make any adjustments. The expectation is that individual performance scores for all executives will average to 1.0 by each pay grade. Most scores for executives generally fall within the 0.80 to 1.20 range. There are presentedtwo components that make up the individual performance score:

Individual NEO performance scores are determined based on the “Non-Equity Incentive Plan Compensation” column. The rangeCEO’s assessment of award opportunitiesthe achievement of those goals; the CEO’s performance is presented inassessed by the 2006 Grants of Plan-Based Awards table.Committee.

Long-Term Incentive Program

Our long-term performance-based incentive program is comprised of a mix of equity awards in the form of stock options and cash-denominated Performance Awards withand stock options. The grant guidelines byfor each pay grade are designed to be approximately equal in targeted expected value. We alsovalue to place a similar weighting on driving internal financial and stock price performance. The Committee has limited discretion within the officer pay grades in determining long-term incentive grants. Discretion in grant size may grant equity-based awards (e.g., options, restricted stock units)be based on scope of job and impact to recognize increased responsibilities or special contributions, attract new hires, retain executives or recognize certain other special circumstances that occur throughout the year.Company. Long-term incentive award payouts are based on Company performance. There is not an individual performance element associated with long-term incentive payouts.

Performance Awards

Performance Awards reward executives based on the achievement of long-term financial goals at the end of a three-year performance period. For the 2006-2008 performance period, economic profit goals were set based ontied to the Company’s long-range business plan.

Retirement Benefits

Executives are eligible to participate in a competitive retirement benefit package, which is based on age, service and compensation, comprised of the following defined benefit plans (no employee contributions are required in order to participate in these plans):

In connection with its review of executive perquisites and other benefits against the program design,Company’s objectives and market practices, the estimated value ofCommittee amended the NEOs’SERP to eliminate supplemental target benefits to executives who are hired or rehired on or after January 1, 2008. Under the amended SERP, executives hired or rehired on or after January 1, 2008 will be eligible to receive the same retirement benefits generally grows annually as additional years are worked withpayable to non-executives without Internal Revenue Code limits, which does not include the Company. supplemental target benefit.

We also provide a targetsupplemental retirement benefit to Mr. McNerney to compensate him for benefits provided by his prior employer that he forfeited.

Further details regarding these programs, including the estimated value of retirement benefits for each NEO, are found under 2006 Pension Benefits beginning on page 42. The change in the actuarial pension value from 2005forfeited when he moved to 2006 is presented in the “Change in Pension Value” column of the Summary Compensation Table.Boeing.

Deferred Compensation

Executives are also eligible to participate in the Company’s Voluntary Investment Plan, a 401(k) plan generally available to all Boeing U.S. employees. The Voluntary Investment Plan is a tax-qualifiedfollowing voluntary deferral programs (known as defined contribution savingsplans):

Eligible executives participate in the related non-qualified

In order to further assist executives in saving for retirement, we provide a

Perquisites and OtherSeverance Benefits

As part ofExecutive Layoff Benefits

The Company maintains an executive layoff benefit plan to provide a competitive total compensation program,fair separation package to an executive in 2006 Boeing provided perquisites andthe event his or her job is eliminated. The plan covers all executives (including NEOs other benefits to the NEOs and selected other executives as follows:

Certain executives are encouraged (except forthan Mr. McNerney, who is required)covered by his employment agreement) and provides severance benefits equal to use Company-owned aircraft for businessone year’s base salary plus target annual incentive compensation, adjusted by Company performance. The layoff benefit plan does not provide benefits upon a change in control. The Committee believes, based on comparison to peer group practices, the current level of benefits provided under the plan (which has been in place since 1997) is appropriate and personal travel for security reasons.provides a fair

separation package to all executives in the event their jobs are eliminated. In addition, executives may continue to participate in some outstanding incentive award programs after a separation based on service and the Company has provided Mr. McNerney a car service so that business can be conducted during his commuteterms and for security purposes. Total perquisite costs for 2006 are presented inconditions of the Summary Compensation Table and related footnotes.award.

CEO Severance and Change in Control ArrangementsBenefits

Pursuant to his employment agreement with the Company, Mr. McNerney is entitled to certain severance and change in control benefits if his employment is terminated. Specifically,The level and nature of these benefits were reviewed against market data and set by a negotiated employment agreement to attract Mr. McNerney, who had similar arrangements with his prior employer, to join the Company. The severance benefits are payable upon his involuntary termination by the Company without cause or voluntary termination by Mr. McNerney for good reason (e.g., adverse change in responsibilities, pay, reporting relationships or the Company’s/successor’s failure to abide by the agreement). These benefits include a cash severance payment, additional supplemental retirement benefits, health and welfare benefits continuation and vesting of certain long-term incentive awards. The cash severance payment is two times base salary plus target annual incentive or, ifincentive. If termination is following a change in control, the payment ofis three times base salary andplus target annual incentive. In the event of a change in control, Mr. McNerney would receive these severance benefits if his employment were subsequently terminated (by the Company without cause or by the executive for good reason). The pay continuation levels and triggering events were set to attract Mr. McNerney, who had a similar arrangement with his prior employer, to join within two years of the Company.

For a description of these arrangements and potential amounts payable, see Potential Payments Upon Termination or Changechange in Control beginning on page 46.control.

Layoff BenefitsGovernance of Pay Setting Process

In ordersetting total direct compensation, a consistent approach is applied for all executives:

Role of Committee, Management and Consultant

The Committee establishes, reviews and approves all elements of the executive compensation program. The Committee works with an outside executive compensation consultant (engaged by the Committee) for advice and perspective regarding market trends that may impact decisions the Company makes about its executive compensation program and practices. Management has the responsibility for effectively implementing the executive compensation program. Additional responsibilities of the Committee, management and the consultant include:

Compensation Committee

Management

Consultant

Benchmarking Against Our Peer Group

Boeing benchmarks executive compensation against a peer group of leading aerospace and manufacturing companies that have a technology focus, global operations, a diversified business and annual sales and market capitalizations comparable to Boeing. Each year the Compensation Committee reviews the peer group and determines whether any changes should be made. In 2007, this review resulted in some changes to our peer group to better represent a cross-section of companies in similar industries with comparable financial, operational and organizational measures. Three companies were removed from the peer group (ConocoPhillips, Marathon Oil and Pfizer) and three companies were added (Johnson & Johnson, Johnson Controls and Procter & Gamble). The 2007 peer group was comprised of the following 24 companies:

Peer group compensation benchmarking is one of several factors considered in the pay setting process. Peer group practices are analyzed annually for target total direct compensation, and periodically for other pay elements (such as executive benefits and perquisites). For 2007, each element of the executive compensation structure (salary range, target incentive award opportunities, and executive benefits and perquisites) was set to be within a competitive range to the middle of the peer group companies. The pay positioning of individual executives will vary based on their competencies, skills, experience and performance, as well as internal alignment and pay relationships. In 2007, each NEO’s salary and target annual and long-term incentive award opportunities were within the competitive range of compensation opportunities offered at the peer group companies. Actual total compensation earned may be more or less than target based on Company and individual performance results during the performance period.

Determination of Performance Goals (Economic Profit) and Awards

Economic profit goals are set taking into account business conditions, expectations regarding the probability of achievement and the desire to incorporate a degree of “stretch” to push the Company to achieve a higher level of performance. Specific probabilities of achievement are not assigned to the economic profit goals. Consistent with our philosophy and approach to setting goals, incentive payouts that are above target will be for superior

performance (results that exceed our business plan). Goals are set at the beginning of the performance period (one year for annual incentive awards and three years for Performance Awards). This process is summarized below.

Any adjustments at the end of the performance period will be based on the Committee’s judgment. The same adjustments considered for the annual awards in a generally “at will” employment relationship,given year will be applied to the long-term Performance Awards. The Committee has discretion over the adjustments but not the discretion to increase or decrease the Company maintainsperformance score outside of these adjustments irrespective of the economic profit performance.

Results

Company Performance Highlights

A key objective of the Company is strong financial performance that provides sustained, long-term increases in shareholder value. Our focus is on growth and productivity. In 2007, the Company had record financial results in the following areas:

Impact on Pay

As mentioned earlier, Company performance has a direct impact on both annual and long-term incentive compensation. For our long-term incentive Performance Awards (measured by economic profit), 2006 was the first year of the program and the performance period is three years; therefore, we have not yet paid out any awards under that program. Under the annual incentive, the final award paid to an executive layoffincludes a measure of both Company and individual performance. We calculate annual incentive awards based on the following formula:

Results for the 2007 annual incentive are discussed below.

Company Performance Score

The Compensation Committee determined that the Company’s 2007 economic profit after adjustments was $3.2 billion versus a target of $2.8 billion. This resulted in a Company performance score of 1.5, which is 50% greater than the target of 1.0. The above target performance was the result of record revenues, earnings, cash flow and backlog in 2007, which was driven by strong growth, continued productivity improvements and solid asset management. Consistent with past practices, adjustments were made to ensure that award payments under the Company’s executive and employee incentive plans represent the underlying growth and performance of the core business. For 2007, the Committee reduced economic profit performance to eliminate the benefit planof a lower tax rate and tax payments versus plan.

Individual Performance Scores

Individual performance scores reflect the CEO’s qualitative and quantitative assessment (Committee assessment for the CEO) of an NEO’s individual performance goals and contributions, value of contributions relative to provide severance benefitspeers, and overall organization performance throughout the performance period. In addition, a leadership assessment of the six leadership attributes (charts the course, finds a way, lives Boeing values, inspires others, delivers results and sets high expectations) is included in the score. In 2007, NEO individual performance scores ranged from 0.916 to 1.143, averaging 1.031. Messrs. McNerney, Albaugh and Bell received scores above 1.0. Their above target performance was a reflection of financial, operational and business achievements, progress on key initiatives, leadership strength, and overall impact to the Company during 2007.

Based on 2007 performance results (as detailed above), the Committee believes the compensation awarded to the NEOs in 2007 was appropriate and achieved the executive compensation program’s objectives.

Additional Considerations

Granting Practices

The Company makes its annual long-term incentive Performance Award and stock option grants in February of each year at the regular meeting of the Compensation Committee, which typically is within a month after the Company has publicly released a report of its prior year annual earnings. The Committee meeting date, or the next business day if the meeting falls on a Sunday, is the effective grant date for the annual executive stock option grants. The exercise price is the Fair Market Value of Boeing stock on that date.

We also may grant equity-based awards (e.g., options, restricted stock units) to recognize increased responsibilities or special contributions, attract new hires, retain executives or recognize certain other special circumstances that occur throughout the year. The effective date of these grants is determined based on the timing of the recognition or recruitment event an executive’s joband approved on or in advance of the effective date of the grant according to the Company’s approval authority requirements. The exercise/grant price is eliminated. Severance benefits may be payable following the eliminationFair Market Value of an executive’s job; however, there are no enhancements providedBoeing stock on the effective date. The Compensation Committee approves all equity grants to executive officers.

Accounting and Tax Implications

The Compensation Committee considers the accounting and tax impact reflected in the eventCompany’s financial statements when establishing the amount and forms of long-term and equity compensation to be granted. The forms of long-term compensation selected are intended to be cost-efficient.

For a description of these layoff benefits, see Potential Payments Upon Termination or Change in Control beginning on page 46.

Other Executive Compensation Policies

Securities Trading Policy.

We have a policy that executive officers and directors may not purchase or sell options to sell or buy Boeing stock (“puts” and “calls”) or engage in short sales with respect to Boeing stock.

Clawback Policy. Pursuant to a policy adopted by the Board of Directors in 2006, we

The Company will seek reimbursement of annual or long-term 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 contained in our Corporate Governance Principles beginning on page 17 and may be viewed on our website atwww.boeing.comwww.boeing.com/corp_gov.

Limitations on Deductibility of Compensation.

Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of compensation paid by a public company to its CEO and certain other highly compensated executive officers (“covered employees”) to $1 million in the year the compensation becomes taxable to the executive. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements.

We consider the impact of this rule when developing and implementing our executive compensation programs. To this end, the annualprogram. Annual incentive awards, Performance Awards and stock options described above are designed to meet the deductibility requirements. Specifically, in 2006 shareholders approved the material terms relating to performance goals for incentive awards to the covered executives. For the Elected Officer Annual Incentive Plan, these material terms include limiting the amount of annual incentive awards paid to these executives to 0.40% of

adjusted operating cash flow for the CEO and 0.15% for each of the other covered employees. Similarly, for the 2003 Incentive Stock Plan, the material terms include limiting the amount paid to the covered employees for Performance Awards at the end of the three-year performance period to a percentage of adjusted operating cash flow for that performance period. The percentage is 0.50% for the CEO and 0.20% for each of the other covered employees. The material terms also limit the number of shares that can be made subject to stock options awarded to an employee in a calendar year to 2 million. Actual levels for each of these types of awards have been significantly less based on the factors and judgments described above under Annual Incentive Plan, Performance Awards and Stock Options on pages 28, 29 and 30, respectively.

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 Section 162(m). Amounts paid under any of our compensation programs, including salaries and grants of restricted stock and restricted stock units, may not qualify as performance-based compensation that is excluded from the limitation on deductibility. Specifically, Mr. McNerney’s salary in 2006 exceeded the limitation, and certain service-based restricted stock and restricted stock unit awards granted to the NEOs in prior years, are not performance-based and when vested may result in additional compensation that exceeds the limitation. We have a Deferred Compensation Plan that permits compensation deferred under the plan to be exempt from the limitation on tax deductibility.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors acts on behalf of the Board to establish and oversee the Company’s executive compensation program in a manner that serves the interests of Boeing and its shareholders. For a discussion of the Compensation Committee’s policies and procedures, see Committee Membership—Compensation Committee beginning on page 12.

Management of the Company has prepared the Compensation Discussion and Analysis of the compensation program for Named Executive Officers (beginning on page 25)32). The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis for fiscal year 20062007 (included in this proxy statement)Proxy Statement) with the Company’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors of the Company that the Compensation Discussion and Analysis be included in the Company’s proxy statement,Proxy Statement, for the year ended December 31, 2006,2007, for filing with the Securities and Exchange Commission.

Compensation Committee

Kenneth M. Duberstein, Chair

John E. Bryson

Edward M. Liddy

John F. McDonnell

Rozanne L. Ridgway

SUMMARY COMPENSATION TABLE

The following table sets forth information regarding 2007 compensation for each of the Company’s 2007 Named Executive Officers; 2006 compensation is presented for executives who were also Named Executive Officers in 2006 (Messrs. McNerney, Bell and Albaugh). In accordance with SEC rules, 2006 compensation is not presented for Messrs. Carson and Jamieson because they were not Named Executive Officers in 2006. Salary includes amounts deferred at the officer’s election. Consistent with the Company’s executive compensation program objectives, performance-based pay, particularly target long-term incentive compensation, is emphasized in determining pay packages. The Summary Compensation Table and the 20062007 Grants of Plan-Based Awards table should be viewed together to get the bestfor a more complete representation of both the short-termannual and long-term incentive compensation elements of our program.

(5)(3)

The amountamounts reported in this column for each officer reflectsreflect the compensation costs for financial reporting purposes for the year under FAS 123R rather than an amount paid to or realized by the officer, for stock options granted in and prior to 2006.the year. These are not amounts paid to or realized by the officer. Assumptions used in the calculation of these compensation costs are included in Note 16 to the Company’s audited financial statements included in the 2006Company’s Form 10-K.10-K for the year. A description of the stock options appears in the narrative text on page 46 following the 20062007 Grants of Plan-Based Awards table.

2007 All Other Compensation

(b)

The amounts represent premiums paid by the Company for term life insurance for the benefit of the insured executive. The amount for Mr. McNerney includes supplemental life insurance premiums paid pursuant to the terms of his employment agreement.

for financial reporting purposes under FAS 123R were $7,034 for 2007 and $13,360 for 2006; these are not amounts paid to or realized by Mr. McNerney. For assumptions used in the calculation of these compensation costs for 2007, see footnote 11 to the 2007 Director Compensation Table on page 25.

20062007 GRANTS OF PLAN-BASED AWARDS

The following table provides information for each of the Company’s Named Executive Officers regarding 20062007 annual and long-term incentive award opportunities, including the range of potential payouts under non-equity incentive plans. Specifically, the table presents the 20062007 grants of Annual Incentive Awards, Performance Awards, stock options and Matching Deferred Stock Units (“MDSUs”). In setting and benchmarking pay levels, we focus on target total direct compensation, which is the sum of base salary, annual incentive compensation at target, Performance Awards at target and a targeted value for stock options.options, as described under Compensation Discussion and Analysis beginning on page 32.