Home Economy News Boeing shareholders vote to keep departing CEO on planemaker’s board

Boeing shareholders vote to keep departing CEO on planemaker’s board


(This May 17 story has been corrected to fix Bill George’s title in paragraph 15)

By Allison Lampert and Abhijith Ganapavaram

(Reuters) – Boeing’s departing CEO Dave Calhoun was re-elected to stay on the troubled company’s board on Friday, even as the planemaker said it was preparing to meet with the U.S. aviation regulator over its quality-control problems.

Boeing (NYSE:BA) is dealing with a sprawling crisis that includes multiple investigations, possible prosecution for past actions and slumping production of its strongest-selling jet.

Shareholders voted at Boeing’s annual general meeting (AGM) for Calhoun to remain on the board. Proxy advisor Glass Lewis had recommended shareholders vote against the re-election of Calhoun and two other directors, citing dissatisfaction over efforts to transform the planemaker’s safety culture.

Calhoun said the company will meet with the Federal Aviation Administration (FAA) in a “couple of weeks” to present a final plan that would respect the U.S. regulator’s 90-day deadline.

In late February, the FAA said Boeing must develop a comprehensive plan to address “systemic quality-control issues,” after a mid-air emergency in January sparked renewed safety concerns.

“We anticipate the FAA will take whatever time is necessary to review that plan and hold us accountable to the various control parameters that are put in place as we move forward,” Calhoun said.

Mollenkopf, a former Qualcomm (NASDAQ:QCOM) chief, said the company has hired an external advisor to assist with the search to replace Calhoun, who said he would retire by year-end as part of a management shakeup following the January emergency on a new 737 MAX 9.

Boeing is “committed to a process that will identify the next CEO to lead Boeing through our current challenges and into the future,” he said.

The company has sought feedback from customers, employees and investors in the search, Mollenkopf said.

“The months and years ahead are critically important to our company as we take the necessary steps to regain the trust lost in recent times, get back on track and perform like the company that we all know Boeing can and must be every day,” he said.

Boeing shares were slightly lower in New York. The stock has plunged 30% this year.

Shareholders also supported a non-binding advisory vote on compensation, after proxy advisor ISS flagged a misalignment between CEO pay and company performance.

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

Investors have been waiting to hear progress on choosing Calhoun’s successor. Management experts said the company needs to find a new leader by mid-year as its current leadership does not have 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 Medtronic (NYSE:MDT) CEO and executive fellow at Harvard Business School.

Bancroft said Pat Shanahan, CEO of Boeing supplier Spirit AeroSystems (NYSE:SPR), would be a “great option” for the next CEO. Other possible successors flagged by analysts or sources have included Boeing board member and Carrier boss David Gitlin and American Airlines (NASDAQ:AAL) Chairman Greg Smith.

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