Boeing shareholders approve chief’s compensation as company faces investigations

18 May 2024, 05:44

Justice Department Boeing Explainer
Justice Department Boeing Explainer. Picture: PA

Boeing chief executive David Calhoun said the company is finishing a 90-day plan for fixing its manufacturing problems.

Boeing shareholders approved chief executive officer David Calhoun’s 32.8 million dollar (£25.8 million) compensation on Friday and heard leaders explain what the troubled aircraft maker is doing to improve the quality and safety of its planes.

It comes after a door plug blew off a Boeing 737 Max jetliner in January.

Mr Calhoun said the company is finishing a 90-day plan for fixing its manufacturing problems — a report the Federal Aviation Administration demanded after the door-plug blowout.

He added that the company is still working to complete an acquisition of key supplier Spirit AeroSystems, but he gave no deadline for completion. Spirit makes fuselages for Max jets and has been a source of manufacturing f

The shareholder meeting was conducted online and heavily scripted. A moderator posed a handful of shareholder questions, which Mr Calhoun and Steven Mollenkopf, the new chairman of Boeing’s board of directors, fielded by seeming to read their answers. None of the questions were too pointed.

Shareholders approved an advisory measure on executive compensation by a 64%-36% margin — nearly all of Mr Calhoun’s pay for 2023 was in stock awards — and rejected shareholder resolutions dealing with subjects such as pay gaps for women and people of colour and the company’s ties to China.

All 11 nominees to the board were approved. Mr Calhoun got the second-lowest support, at 78%, with former GE Aviation chief executive David Joyce last at 67%.

The company has lost more than 23 billion dollars (£18 billion) — including 2.2 billion dollars (£1.7 billion) last year — since Mr Calhoun took over as chief executive in January 2020, mostly related to a pair of deadly 737 Max crashes that occurred in Indonesia and Ethiopia while he was on the board but before he became chief executive.

Through Thursday, the shares had fallen 27% since the door plug accident during an Alaska Airlines flight over Oregon.

“Our CEO was paid $33 million dollars last year for failure,” said James McRitchie of CorpGov.net, an activist shareholder who presented an unrelated resolution during Friday’s online meeting.

Mr Calhoun announced in March that he would step down at the end of the year. Another shareholder said Mr Calhoun should leave immediately.

Boeing was made the subject of multiple investigations after the door plug blew out.

It could also face criminal prosecution for allegedly violating the terms of a settlement with the US Justice Department after the Max crashes in 2018 and 2019, which killed 346 people.

The company has fallen far behind European rival Airbus — the world’s other major manufacturer of large passenger jets — in sales and deliveries.

Mr Mollenkopf said the months and years ahead are critical “as we take the necessary steps to regain the trust lost in recent times”.

“The world needs a healthy, safe and successful Boeing, and the board is going to make sure that is what it’s going to get,” he said.

By Press Association

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