ISS advises Boeing shareholders to reject Calhoun’s compensation proposal

Boeing investors are being urged to vote against chief executive David Calhoun’s hefty $32.8 million pay package by shareholder adviser ISS. The recommendation comes in the wake of a mid-air door plug blowout incident in January on one of the company’s planes, adding to the challenges facing the aircraft maker.

In a report released by Institutional Shareholder Services late on Friday night, it was highlighted that Calhoun’s pay saw a significant 45% year-on-year increase, despite not receiving an annual cash bonus for 2023. ISS pointed out that Boeing’s board had “significantly increased” his long-term bonuses for the third consecutive year, a move that was deemed questionable given the lack of compelling rationale.

The 66-year-old CEO announced in March that he would be stepping down at the end of the year, with a succession process already underway. ISS also raised concerns about a large share grant given to Calhoun, as well as the $514,285 paid for private jet flights, which exceeded the median pay for flights among chief executives of S&P 500-listed companies.

Boeing’s share price closed at $179.79 on Friday, marking a 29% decline since the start of the year. The company has been grappling with the aftermath of the Alaska Airlines Boeing 737 Max aircraft emergency landing in January, which led to the temporary grounding of some 737 Max aircraft by the Federal Aviation Administration.

Despite the call to vote against Calhoun’s pay, ISS recommended that shareholders support his re-election to the Boeing board, along with other directors facing a vote. The advisory firm acknowledged that Boeing still has work to do to regain confidence, but deemed cautious support for aerospace safety committee chair David Joyce as warranted.