The Institutional Shareholder Services called on Boeing Company investors to vote against a $32.8 million pay package for its chief executive officer, David Calhoun, citing concerns over a special equity award and a “sizable increase” in his long-term incentive grant.
This was disclosed by the shareholder advisory firm at the company’s annual meeting, according to Fortune.
CEO David Calhoun’s 45% pay jump from the prior year should be rejected at the company’s annual meeting on May 17, the shareholder advising firm said in a new report. Calhoun said in March that he would step down at the end of 2024.
The shareholder advisory firm said in a new report that Chief Executive, David Calhoun should be denied his 45% pay increase from last year.
Calhoun had announced in March that by the end of 2024, he would step down.
Since several high-profile quality control issues with Boeing aircraft, the company has been subject to increased scrutiny, raising concerns among consumers, investors, and legislators. A mid-air door plug blowout on an Alaska Airlines flight in January prompted a temporary grounding of Boeing’s 737 Max jets, a Federal Aviation Administration investigation, and an order to halt planned production increases of the company’s most important model.
The Boeing CEO was summoned to appear and testify before the United States legislature, where senators criticised the company’s safety culture and demanded substantial changes.
Recently in April, a proxy advisory firm, Glass Lewis & Co. had called on shareholders to vote against the reappointment of Calhoun, even though he had already announced his resignation, and two other directors, as a result of concerns over the company’s safety culture.
The Glass Lewis report said it also opposed the reelection of David Joyce and Akhil Johri. Joyce was appointed to the Board of Directors in 2021 as Chair of the Committee on Aviation Safety. Johri has been the chairman of the Boeing Audit Committee since 2020 and has been a director since then.
However, ISS stated that given the quality control issues that will have to be fully addressed by the plane-maker if it is to restore confidence from its customers, Joyce’s reappointment should be supported with cautiousness.
Boeing had last year witnessed a nonstop streak of bad news when an airline discovered a potential problem with a key part on two 737 Max aircraft.
Boeing affirmed it was responsible for those crashes noting they were caused by a design flaw, and had since been fixed after a nearly two-year grounding.
