Outgoing Boeing CEO to stay on board as safety concerns linger

Outgoing Boeing (BA) CEO Dave Calhoun will remain on the company’s board following a shareholder vote. Yahoo Finance’s Alexis Keenan joins Market Domination Overtime to discuss the company’s future amid new leadership.

In addition to voting to keep Calhoun on the board, shareholders also approved his compensation of $32.8 million. Boeing will seek a new CEO to help the company recover from the two fatal 737 MAX crashes and the detached fuselage on an Alaska Airlines flight. The company is also facing potential prosecution from the Justice Department for violating an agreement reached to avoid prosecution over the 737 MAX crashes.

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This post was written by Melanie Riehl

Video transcript

Outgoing Boeing, Ceo Dave Calhoun will remain on the company's board.

It's following a shareholder vote earlier today, the move comes as the company tries to stabilize production and quality and joining us now with more is Alexis Keenan Alexis.

Hey, yeah.

So there were two really closely watched issues in the shareholder vote.

One was that you mentioned there, Calhoun stay on the board, don't stay on the board despite that he's stepping down as CEO at the end of this year and it was against the advice of proxy advisor Glass Lewis.

So the other issue was whether to approve Calhoun's 2023 executive compensation at $32.8 million.

Uh He's been CEO of Boeing since January of 20 20.

Now, both of those votes coming in.

Yes.

So the new board will have Calhoun, he'll be the only the only non independent director there and then he'll be among the 11 member board.

Now.

Meanwhile, Boeing also looking for its new CEO and also trying to recover from the two fatal max uh 737 crashes.

Also that one non fatal accident in January back with that Alaska Airlines fuselage that detached at 16,000 ft.

So Boeing really having this sky of really red tape also including a pending decision from the justice department that has already said that the company violated deferred prosecution order that was attached to those two fatal crashes in 2018 and 2019.

And so the DOJ, they're deciding whether or not it will criminally prosecute the company.

We should know that by July, uh also lawsuits tied to that Alaska Air incident.

You've got government investigations ongoing.

You also have more oversight across the company and its production.

Also really just its tarnished reputation from all of these aircraft failures.

Now, during the shareholder meeting, Calhoun was asked about the company's financials.

Uh wanting to know one question was wanting to know if the company would go back to restoring its dividend, it was ended back in 2020.

But to respond to that, Calhoun said, well, the job number one is first returning to a steady cash flow.

Uh and they said that the objective was to do that by 2025 2026.

He said he was hopeful about that so far this year, stock down uh since January about 30%.

And also coming up for this company, Boeing is scheduled to meet with the FAA in two weeks and at that time, they're going to have to present a plan to get their house in order.

This is something that they've been working on and what they're presenting to the regulator is a way to many ways to enhance quality across the company, across production, across manufacturing guys, Alexis just quickly here.

I mean, listening to this litany and everything that's going on, one could be forgiven for saying why the heck did they approve him remaining on the board and on the pay package?

Do we have any insight into the thinking on the part of shareholders?

Yeah, I wish I could tell you Julie.

Uh it was a real quick brush.

Yes, it's approved, there was very little talk uh about it at the meeting.

Um But uh it was absolutely against the advice of Glass Lewis and certainly a lot of people skeptical about the fact that Calhoun was at the helm at the time when this Alaska Air door came off of the aircraft in flight back in January.

So he's stepping down, but he's going to remain a member of the board.

Uh I guess the positive news for some critical shareholders is that he will be the only non independent board member at this point.

Since 2019.

The company has kind of done an overhaul of its board and they have a lot of new board members and they did mention during the call that a lot of those members have engineering experience, something that critics have wanted to come back to the company for quite some time.

All right, Alexis, thanks so much.

Appreciate the update.