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Boeing CEO To Step Down Amid Proxy Advisor Concerns
Boeing CEO Dave Calhoun has made public his intentions to step down from his position by the end of the calendar year. In light of this announcement, Calhoun had initially planned to remain with the company as a member of the board of directors following the transition. However, proxy advisor Glass Lewis has taken a firm stance against this proposal, recommending to institutional shareholders that they withhold their support for Calhoun’s reelection to the board.
Concerns Raised by Glass Lewis
According to the report provided to Quartz, Glass Lewis is advocating a vote of no confidence in Calhoun’s continued presence on the board as a means of expressing profound dissatisfaction with Boeing’s recent operational challenges. The company has faced significant turbulence in the aftermath of the door plug blowout incident involving an Alaska Airlines-operated 737 Max 9 aircraft earlier this year.
The subsequent scrutiny by regulatory bodies and the US Justice Department has cast a shadow over Boeing’s reputation for safety and adherence to quality standards. This has resulted in a notable decline in the delivery of aircraft to customers, who have in turn expressed growing frustration with the situation. Despite recent efforts to secure additional funding—such as the $10 billion raised in debt markets—Boeing has also seen a substantial consumption of cash reserves, including a reported $4 billion to address operational issues.
Concerns Over Safety Culture and Oversight
Glass Lewis emphasized the importance of instigating key leadership changes within Boeing to demonstrate a renewed commitment to fostering a positive safety culture. The proxy advisor underscored the significance of signaling discontent with the company’s handling of recent safety incidents by rejecting the reelection of Calhoun and other board members responsible for oversight in this area.
While acknowledging recent efforts by Boeing to address these concerns, Glass Lewis contends that a negative vote from shareholders at the upcoming annual meeting on May 17 would serve as a clear message regarding the need for improved safety practices and governance within the organization.
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