Institutional Shareholder Services urged Boeing Co. investors to vote against a $32.8 million pay package for its chief executive officer, citing concerns over a special equity award and a “sizable increase” in his long-term incentive grant.
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 company has faced heightened scrutiny since a series of high-profile quality control issues on Boeing aircraft, sparking concern from consumers, investors and lawmakers. 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 near-catastrophe led US lawmakers to call Calhoun to testify before Congress, where senators said the company’s safety culture was broken and demanded substantial change.
In late April, proxy adviser Glass Lewis & Co. urged shareholders to vote against the reelection of Calhoun, who had already said he would step down, as well as two other directors because of concerns about oversight of the company’s safety culture.
The Glass Lewis report said it also opposed the reelection of David Joyce and Akhil Johri. Joyce leads the aerospace safety committee and joined the board in 2021. Johri is chair of Boeing’s audit committee and has been a director since 2020.
ISS said it would support, with caution, the reelection of Joyce, citing quality control issues that will need to be fully resolved for the planemaker to regain public confidence.