(Reuters) – Boeing shareholders will vote on Friday whether outgoing CEO Dave Calhoun should remain on the board, adding intrigue to an annual general meeting (AGM) where investors are expected to seek clarity on future leadership of the planemaker.
Former Qualcomm chief Steve Mollenkopf will make his first public appearance as chairman at the virtual gathering. Boeing is dealing with a sprawling crisis that includes multiple investigations, possible prosecution for past actions and slumping production of its strongest-selling jet.
Mollenkopf is leading the search to replace Calhoun, who said he would retire by year-end as part of a management shakeup following a January mid-air blowout on a new 737 MAX 9.
“I would think it’s going to be a rougher ride, this AGM,” said David Duffy, co-founder and director of the Dublin-based Corporate Governance Institute, in reference to Mollenkopf.
“Most (attendees) are institutional investors who want to know, ‘Can you give us some sort of commitment you’re going to sort this place out and what you hope to achieve within a certain space of time?’ What he says in the AGM is going to be important, not just for investors but passengers.”
Boeing shares have plunged 30% this year.
Proxy advisor Glass Lewis has recommended shareholders vote against the reelection of Calhoun and two other directors to Boeing’s board, citing dissatisfaction over efforts to transform the planemaker’s safety culture.
Separately, proxy advisor ISS flagged a misalignment between CEO pay 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 shares in Boeing, said he believes Calhoun’s pay package is in line with a company of Boeing’s size.
Investors have also 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 CEO and a Harvard professor of management practice.
Bancroft said Pat Shanahan, CEO of Boeing supplier Spirit AeroSystems, would be a “great option” as the next CEO. Other possible successors flagged by analysts or sources have included Boeing board member and Carrier boss David Gitlin and American Airlines Chairman Greg Smith.
(Reporting By Allison Lampert in Montreal, David Gaffen in New York and Abhijith Ganapavaram in Bangalore; editing by Rod Nickel)
Comments