Shareholders of Boeing Co. (NYSE:BA) are set to vote on the board status of departing CEO Dave Calhoun, adding a twist to the company's annual general meeting (AGM).
What Happened: The vote will take place on Friday, during an AGM where investors are anticipated to seek clarity on the future leadership of the aerospace manufacturer, Reuters reported. The company is currently grappling with a series of crises, including multiple investigations, potential prosecution for past actions, and a decline in production of its best-selling jet.
Former Qualcomm CEO Steve Mollenkopf, who is leading the search for Calhoun's replacement, will make his debut as chairman at the virtual gathering. Calhoun announced his retirement as part of a management shakeup following a mid-air blowout on a new 737 MAX 9 in January.
Proxy advisor Glass Lewis has urged shareholders to vote against the reelection of Calhoun and two other directors to Boeing's board, citing dissatisfaction with efforts to transform the company's safety culture. Meanwhile, proxy advisor ISS has highlighted a misalignment between CEO pay and company performance.
Investors are also eagerly awaiting updates on the selection of Calhoun's successor. Management experts have suggested that the company needs to appoint a new leader by mid-year, as the current leadership lacks the credibility to implement significant changes.
Why It Matters: Boeing's recent developments include regulatory changes, potential legal challenges, and technical indicators that suggest a cautious outlook. The U.S. House of Representatives passed a comprehensive aviation bill aimed at improving air traffic controller staffing, enhancing runway safety and expediting refunds for canceled flights. This legislative push underscores the growing urgency to bolster aviation safety following a series of near-miss incidents and a mid-air emergency involving an Alaska Airlines Boeing 737 MAX 9.
Furthermore, Congress has exempted Boeing 767 Freighter from a 2028 production cutoff, providing a bridge for the company in case express carriers need extra capacity. This exemption, however, could limit the operation of freighters produced between 2028 and 2033 to the domestic U.S. market.
Earlier this year, Calhoun announced his resignation as part of a comprehensive management overhaul as the company seeks to navigate through the 737 Max crisis. The transition in leadership and the upcoming vote on Calhoun's board status are critical for the future of the company.
Price Action: On Thursday, Boeing stocks closed 3.44% higher at $183.08 while it was trading 0.16% lower in the after-market at $182.79, according to Benzinga Pro.
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