(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 the future direction of the aircraft manufacturer.
Former Qualcomm chief Steve Mollenkopf will make his first public appearance as chairman during the virtual meeting. Boeing faces a sprawling crisis that includes multiple investigations, possible lawsuits over past actions and a slowdown in production of its best-selling plane.
Mollenkopf is leading the search to replace Calhoun, who announced he would retire by the end of the year as part of a management shakeup following a January in-flight blowout on a new 737 MAX 9 .
“I think this general meeting is going to be more difficult,” said David Duffy, co-founder and director of the Dublin-based Corporate Governance Institute, referring to Mollenkopf.
“Most (participants) are institutional investors who want to know, ‘Can you give us some sort of commitment that you’re going to fix this and what you hope to achieve in a certain time frame?’ What he says at the AGM will be important, not only for investors but also for passengers.”
Boeing shares have plunged 30% this year.
Proxy advisor Glass Lewis recommended shareholders vote against the re-election of Calhoun and two other directors to Boeing’s board, citing dissatisfaction with efforts to transform the aircraft maker’s safety culture.
Separately, proxy advisor ISS flagged a disconnect between CEO pay and company performance, arguing that investors should not support a non-binding advisory vote on pay.
Tony Bancroft, a portfolio manager at Gabelli Funds, which owns shares in Boeing, said he believed Calhoun’s pay package was in line with that of a company the size of Boeing.
Investors also expected progress in choosing Calhoun’s successor. Management experts said the company needs to find a new leader by mid-year because its current leadership lacks the credibility to make bold changes.
“Boeing will not be able to get back on track until its board of directors appoints a new CEO from outside the company, with a technical background and a deep understanding of aerospace technology,” he said. 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 option” as the next CEO. Other possible successors flagged by analysts or sources include 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)
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