Boeing changes retirement age to keep CEO at the helm

April 21, 2021
Boeing MAX fraud
Photo: Boeing

US aerospace giant Boeing has been criticized for extending the standard retirement age for directors from age 65 to 70 to allow CEO David Calhoun to potentially stay at the helm until 2028.

Calhoun, who has been president and chief executive of the company since he took over from beleaguered predecessor Dennis A. Muilenburg in January 2020, turned 64 this year and the board cited his performance so far and the need for continuity as reasons for the decision.

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The move was slammed by lawyers representing families of victims of one of two 737 MAX crashes that took the lives of 346 people and saw the aircraft grounded for more than 18 months.

“The public record shows that Mr. Calhoun was deeply involved in Boeing‘s culture of maximizing profits over safety,” said Clifford Law Offices senior partner Robert A. Clifford, who is lead counsel in claims about the MAX crash in Ethiopia. “His continued employment at Boeing sets the stage to perpetuate that culture.”

Michael Stumo, the father of Samya Rose Stumo who was killed in the Ethiopian crash, called for new leadership at the company with a commitment “to great engineering, flawless manufacturing and reinvesting in the business for the long term”.

But Boeing chairman Larry Kellner said Calhoun’s strong leadership had seen Boeing effectively navigate “one of the most challenging and complex periods in its long history”.

“His dedication to renewing the company’s commitment to safety, quality and transparency has been critical in building regulator and customer confidence as Boeing returns the 737 MAX to service,’’ Kellner said.

“And, in the face of unprecedented challenges brought on by the global pandemic, he has taken proactive actions to ensure Boeing remains strongly positioned for the recovery in the aviation industry.

“Given the substantial progress Boeing has made under Dave’s leadership, as well as the continuity necessary to thrive in our long-cycle industry, the Board has determined that it is in the best interests of the company and its stakeholders to allow the Board and Dave the flexibility for him to continue in his role beyond the company’s standard retirement age.”

Although the board’s action extended the mandatory retirement age for Mr. Calhoun to April 1, 2028, it said there was no fixed term associated with his employment.

The company also announced that chief financial officer Gregory D. Smith would retire in July after holding the role since 2011. It is conducting a search for Smith’s successor.

Calhoun paid tribute to Smith as a remarkable business leader.

“His stewardship of the company’s financial position for nearly a decade, and his leadership during the severe challenge our industry has faced as a result of the global pandemic, have been essential to positioning Boeing for a bright future,’’ he said.

Separately, the US Department of Transportation’s Office of Inspector General announced on April 20 it was starting an audit of the Federal Aviation Administration’s certification of the 737 MAX 8 and its safety oversight.

The review will examine the FAA’s action after each of the two Boeing 737 MAX accidents, including the grounding of the aircraft and its recertification.

It is one of series of reviews conducted by the OIG into the MAX tragedies.