Boeing’s (BA) board of directors extended the standard retirement age to 70 from 65 for its CEO ahead of a shareholder meeting that could see key members ousted. Boeing stock fell.
David Calhoun, 64, has served as president and CEO since Jan. 13, 2020, taking over after the 737 Max crashes and managing the aerospace giant during the pandemic.
“Under Dave’s strong leadership, Boeing has effectively navigated one of the most challenging and complex periods in its long history,” said Chairman Larry Kellner.
Calhoun’s mandatory retirement age now extends to April 1, 2028, but there is no fixed term for his employment.
Boeing also announced CFO Greg Smith will retire, effective July 9. He was appointed CFO in 2011 and briefed served as interim CEO before Calhoun took over.
Boeing Stock, Board Meeting
Shares fell 3.3% to 236.00 on the stock market today. Boeing stock has made a round-trip sell signal after breaking out past a 244.18 entry last month, then giving up all its gains and falling back to the buy point. Top supplier Spirit AeroSystems (SPR) fell 4.1%, and engine supplier General Electric (GE) lost 2%.
The management moves come as Boeing holds its annual meeting Tuesday, where a potential board fight could break out.
The proxy advisory firm Glass Lewis recommended shareholders vote against Chairman Kellner and Edmund Giambastiani, citing prior stints on on the board’s audit committee, which oversees major risks. Another proxy firm, Institutional Shareholder Services, has backed Boeing’s slate.
The vote is seen as a referendum on whether the board has pushed for enough changes in the corporate culture since the two 737 Max crashes.
Problems with the Maneuvering Characteristics Augmentation System automated flight-control software contributed to the Ethiopian Air crash in March 2019 as well as the October 2018 Lion Air crash. Combined, the two crashes killed 346 people.
But investigations into the causes of the crashes have also pointed to a culture of putting profit ahead of safety.
Boeing 737 Max Order
Meanwhile, Dubai Aerospace Enterprise announced an order for 15 737 Max jets. The deal, which is valued at $1.8 billion at list prices, is the first direct order by the leasing company for Boeing 737 Max planes. It has purchased some 737 Max’s from airlines, which it then released back to the carrier.
“We are confident in the success of these aircraft as domestic and regional air travel is seeing strong signs of recovery,” CEO Firoz Tarapore said in a statement.
The order comes after Boeing acknowledged last week that a potential electrical issue on the 737 Max affects more aircraft than previously thought, after airlines removed dozens of the planes from service.
Airlines have increased aircraft orders in recent months as the 737 Max returns to service.
In December, Ireland’s Ryanair announced an order for 75 Boeing 737 Max planes, the largest order since the plane was grounded in 2019. Alaskan Airlines (ALK) followed with an agreement to buy 23 more 737 Max jets, the largest U.S. order for the jet since its grounding.
In late March, Southwest Airlines (LUV) said it would add 100 orders for the Boeing 737 Max 7 to an existing order. On March 12, Boeing also confirmed a deal with investment firm 777 Partners, which will buy 24 737 Max jets with options for another 60 aircraft. United Airlines (UAL) announced in February it would buy 25 737 Max jets.
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