Board status of departing Boeing CEO faces shareholder vote on Friday

(Reuters) – Boeing shareholders will vote on Friday on whether outgoing CEO Dave Calhoun should remain on the board, adding to intrigue at the annual general meeting (AGM) where investors are expected to seek clarity on the aircraft maker’s future leadership. planes.

Former Qualcomm chief Steve Mollenkopf will make his first public appearance as president at the virtual meeting. Boeing is dealing with a widespread crisis that includes multiple investigations, possible lawsuits over past actions and falling production of its best-selling jet.

Mollenkopf is leading the search to replace Calhoun, who said he would retire by the end of the year as part of a management change following a mid-air explosion in January on a new 737 MAX 9.

“I think this AGM will be more difficult,” said David Duffy, co-founder and director of the Dublin-based Corporate Governance Institute, in reference to Mollenkopf.

“The majority (of participants) are institutional investors who want to know, ‘Can you give us some kind of commitment that you’re going to fix this place and what you hope to achieve within a certain time frame?’ What he says at the General Assembly will be important, not only for investors, but also for passengers.”

Boeing shares have plummeted 30% this year.

Proxy consultant Glass Lewis recommended that shareholders vote against the re-election of Calhoun and two other directors to Boeing’s board, citing dissatisfaction with efforts to transform the plane maker’s safety culture.

Separately, proxy consultant ISS flagged a misalignment between CEO compensation and company performance, arguing that investors should not support a non-binding advisory vote on compensation.

Tony Bancroft, portfolio manager at Gabelli Funds, which owns Boeing shares, said he believes Calhoun’s salary package is in line with a company the size of Boeing.

Investors are also waiting to hear progress on choosing Calhoun’s successor. Management experts say the company needs to find a new leader by mid-year, as its current leadership lacks the credibility to make bold changes.

“Boeing cannot get back on track until its board appoints a new CEO from outside the company with a technical background and a deep understanding of aerospace technology,” said Bill George, former CEO of Medtronic and professor of management practices at Harvard. .

Bancroft said Pat Shanahan, CEO of Boeing supplier Spirit AeroSystems, would be a “great fit” as the next CEO. Other possible successors touted by analysts or sources include David Gitlin, a Boeing board member and head of Carrier, and Greg Smith, president of American Airlines.

(Reporting by Allison Lampert in Montreal, David Gaffen in New York and Abhijith Ganapavaram in Bangalore; Editing by Rod Nickel)