Boeing investors rebuke leaders by splitting CEO, chairman roles

A majority of Boeing Co. shareholders voted to separate the chief executive and chairman roles permanently, sending a rebuke to the planemaker’s leadership at its annual general meeting.

The proposal for an independent chairman, which was opposed by management, garnered 52 per cent of shareholder votes, Boeing said Monday. A measure that would have allowed investors to raise matters outside the normal annual meeting cycle got 43 per cent of votes in favour — an unusually high level of support for an initiative not recommended by company leaders.

While the votes aren’t binding, they sent a clear message to the board that large institutional shareholders want more accountability after two deadly crashes of Boeing’s 737 Max plunged the company into a deep crisis. The board had resisted calls to require an independent chairman even after establishing an outsider, Larry Kellner, in that role as part of a shakeup following Boeing’s botched handling of the accidents.

“Shareholders want greater oversight of Boeing management,” shareholder activist John Chevedden said in response to the vote. Breaking with tradition, the session was held online due to the Covid-19 pandemic.

While splitting the chairman and CEO roles has gained popularity at other leading U.S. companies, Boeing’s directors warned in the 2020 proxy statement that the measure would “impose irrevocable limits on the board’s future flexibility.” After the vote, Kellner said the company would take the advisory votes into account.

“We’ll continue to use your feedback to inform decision- making going forward,” he said.

Boeing’s slate of director nominees was re- elected at the meeting, despite taking fire for being slow to intervene as the company spiralled into crisis after regulators grounded the 737 Max, the company’s biggest source of revenue.

Kellner responded to another criticism — the shortage of aerospace experience on the board — by vowing to recruit more directors with an engineering background.