(Reuters) – Boeing (NYSE:) shareholders will vote on Friday whether outgoing CEO Dave Calhoun should remain on the board, adding intrigue to the annual general meeting (AGM) where investors are expected to seek clarity on the planemaker’s future leadership .
Former Qualcomm (NASDAQ:) CEO Steve Mollenkopf will make his first public appearance as chairman at a virtual meeting. Boeing faces a growing crisis that includes multiple investigations, possible prosecution over past actions and falling production of its best-selling plane.
Mollenkopf is leading the search to replace Calhoun, who has said he will retire by the end of the year as part of a leadership change following the January midair accident on the new 737 MAX 9.
“I think this annual general meeting will be more difficult,” said David Duffy, co-founder and director of the Dublin Institute of Corporate Governance, referring to Mollenkopf.
“Most (of those in attendance) are institutional investors who want to know, ‘Can you give us some kind of commitment that you’re going to clean this place up and what you hope to achieve over a certain period of time?’ What he says at the AGM will be important not only for investors, but also for passengers.”
Boeing shares are down 30% this year.
Trusted adviser Glass Lewis recommended shareholders vote against the re-election of Calhoun and two other directors to Boeing’s board, citing dissatisfaction with efforts to change the planemaker’s safety culture.
Additionally, ISS’s trusted advisor noted the disparity between CEO pay and company performance, arguing that investors should not support non-binding advisory voting on compensation.
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Tony Bancroft, a portfolio manager at Gabelli Funds, which owns Boeing shares, said he believes Calhoun’s salary package is commensurate with Boeing’s size.
Investors are also awaiting news on the progress of the selection of Calhoun’s successor. Management experts said the company needs to find a new leader by mid-year because its current leadership does not have enough confidence to make bold changes.
“Boeing will not be able to get back on track until its board of directors appoints a new CEO from outside the company with a technical background and a deep understanding of aerospace technology,” said Bill George, former Medtronic (NYSE:) CEO and Professor of Management Practice at Harvard.
Bancroft said Pat Shanahan, CEO of Boeing supplier Spirit AeroSystems (NYSE:), would be a “great option” as the next CEO. Other possible successors flagged by analysts or sources include Boeing board member and Carrier executive David Gitlin and American Airlines (NASDAQ:) Chairman Greg Smith.