Dave Calhoun, boss of Boeing, January 24, 2024 in Washington (AFP / Jim WATSON)
The general meeting of shareholders of Boeing reappointed the entire board of directors on Friday, including boss Dave Calhoun who will be able to leave the group at the end of the year with an envelope of more than 33 million dollars validated by the AG.
Mr. Calhoun, administrator since 2009 and boss of the aircraft manufacturer since the beginning of 2020, must hand over control by the end of the year, carried away by multiple crises linked to production and quality control problems.
According to the chairman of the board of directors, Steve Mollenkopf, a “careful process” is underway to find a general manager who will be able to guide the group in the face of “current and future challenges”.
“The coming months and years are of crucial importance for the group,” he continued at the AGM.
This meeting with shareholders – which lasted a little less than an hour – was held in a difficult climate for Boeing, which has been the subject of increased attention in recent months from authorities, regulators and justice in particular.
The Alaska Airlines 737 MAX 9 which lost part of its cabin in flight on January 5, 2024 (AFP / Patrick T. Fallon)
Several shareholder advisory firms had sent negative vote recommendations on several resolutions, with Dave Calhoun in their sights.
His departure, announced at the end of March, is the consequence of the in-flight incident on a new Alaska Airlines plane on January 5, the last straw after a series of production problems in 2023 affecting the 737 MAX and the 787 Dreamliner.
– Work to do –
“Although we have made progress in strengthening our safety management and quality control systems and processes in recent years, recent events clearly show that we still have work to do,” noted Mr. Mollenkopf, who took over as chairman of the council at the end of March.
Steve Mollenkopf, Chairman of the Board of Directors of Boeing, January 6, 2015 in Las Vegas, Nevada (GETTY IMAGES NORTH AMERICA / David Becker)
He indicated that the directors retained “total confidence” in the future of Boeing, described as “promising”.
Mr. Calhoun told shareholders that this was his last participation in an annual general meeting, suggesting that he will give up his seat as director by leaving the general management.
“In recent years, we have overcome significant challenges, some of which could threaten the future existence” of Boeing, he said, referring to the crashes of two 737 MAXs in 2018 and 2019 (346 deaths in total), due to to a design problem, and the Covid-19 pandemic.
“As long as I am in this role, I will continue to ensure that we are doing everything we can to put ourselves on the right trajectory and make a smooth transition to my successor,” he continued.
Boeing 737 MAXs at the manufacturer’s factory in Renton (northwest United States), March 25, 2024 (GETTY IMAGES NORTH AMERICA / STEPHEN BRASHEAR)
In addition to the consequences of quality problems, Boeing is caught up in the affair of the two crashes: according to the Ministry of Justice, the giant did not respect a so-called deferred prosecution agreement (DPA) dating from 2021 and now risks prosecution criminal.
Not to mention the investigation by a Senate committee, the delays of the first crewed space flight of its Starliner spacecraft and a slowdown in deliveries which deepens its losses.
– Upvotes –
The firm Glass Lewis had advised shareholders not to renew the mandate as director of Mr. Calhoun, as well as those of Akhil Johri and David Joyce, responsible respectively for the audit and aerospace safety committees.
Dave Calhoun, boss of Boeing, in Congress in Washington on January 24, 2024 (GETTY IMAGES NORTH AMERICA / Anna Moneymaker)
The eleven directors were, however, renewed by the General Meeting.
According to a document available on the website of the American stock market watchdog (SEC), some 22% of the represented shares voted against the re-election of Mr. Calhoun and 33% against that of Mr. Joyce.
For the firm Investor Shareholder Services (ISS), it was the envelope provided for the departure of Dave Calhoun that posed a problem. But the shareholders approved it, with some 64% of the shares represented.
To his annual base salary of $1.4 million must be added more than $30 million in the form of shares. After the Jan. 5 incident, he waived an additional $2.8 million bonus.
Scott Hamilton, of the specialist site Leeham News, points out that “this represents an increase of 40% compared to the current contract. Mr. Calhoun’s departure package includes performance and shares granted while he held office between 2020- 2023.”
Debris from the Ethiopian Airlines Boeing 737 MAX after its crash on March 10, 2019 near Addis Ababa (AFP / Michael TEWELDE)
“The accident of Alaska Airlines Flight 1282 shows that Boeing still has much work to do, but the board believes that Mr. Calhoun responded correctly … by taking responsibility” for the incident, “in exchanging transparently and proactively with regulators and customers”, Boeing had justified, also citing “the important measures taken to strengthen the quality” of production.
At the close of the New York Stock Exchange, Boeing shares rose 1.09%.