Summary
- Boeing’s departing CEO, Dave Calhoun, has been re-elected to the company’s board amidst ongoing quality control issues.
- Calhoun’s successor faces the challenge of regaining trust and credibility, with shareholders questioning CEO compensation.
- Industry experts believe Boeing must appoint a new CEO with an aerospace background to improve its reputation.
Dave Calhoun, Boeing’s departing Chief Executive Officer, has been re-elected to remain on the aircraft manufacturer’s company board. The planemaker plans to meet with US aviation regulators over continued claims and issues around quality control. The plane maker is facing a growing crisis of multiple investigations and potential prosecution for short-cutting actions on the 737 MAX aircraft.
At Boeing’s recent annual general meeting (AGM), it was voted for Calhoun to remain on the board after Glass Lewis, a Proxy advisor, recommended shareholders should vote against the re-election of the departing CEO due to general dissatisfaction from Calhoun to transform the safety culture at Boeing.
The FAA set a 90-day deadline to Boeing on February 28, giving the manufacturer 90 days to address its systemic quality control issues following the Jan 5 incident in which an Alaska Airlines MAX 9 aircraft, operating as AS1282, was minutes into its ascent from Portland, Oregon when a plug door blowout decompressed the cabin and caused panic for the passengers onboard. This led to a global grounding of the variant while investigations were undertaken into the cause of the issue.
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Identifying the next Boeing CEO
Boeing’s chair, Steven Mollenkopf, leads the recruitment search to replace Calhoun. The new CEO will start with many challenges following a slump of 30% in Boeing shares and dwindling order numbers following widespread controversy. The next few months are critically important for Boeing as the manufacturer looks to regain the trust of its customers, investors, and staff. Mollenkopf reiterated this in a statement at the recent AGM:
“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.”
Photo: Georgiphoto I Shutterstock
Shareholders have also supported a nonbinding vote on Boeing’s CEO compensation after a proxy advisor flagged that they believed Calhoun’s pay was misaligned to the company’s performance. As reported by the Guardian, this was shut down by Gabelli Funds, where its portfolio manager, Tony Bancroft, identified that Calhoun’s remuneration was appropriate given the company’s size.
Calhouns successor
The recruitment driver is for Calhoun’s successor to find a replacement by mid-year to ensure that Boeing can maintain credibility and make substantial changes. Several investors have suggested who would be appropriate at the helm, such as Pat Shanahan, CEO of Boeing supplier Spirit AeroSystems, David Gitlin, Chairman and CEO of Carrier Global Corporation, and American Airlines Chairman Greg Smith. In the face of challenges for Boeing, many believe that Boeing will struggle to turn its reputation around, with Bill George, former Medtronic CEO and Harvard professor, noting:
“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.”
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