ISS Advises Boeing Shareholders to Reject CEO Compensation Package

Institutional Shareholder Services (ISS) is urging Boeing Co. investors to vote against a $32.8 million pay package for CEO David Calhoun, citing concerns over a special equity award and a significant increase in his long-term incentive grant. Calhoun’s 45% pay jump from the prior year has raised red flags for the shareholder advising firm, who believe it should be rejected at the company’s annual meeting on May 17.

Boeing has been under intense scrutiny following a series of high-profile quality control issues on its aircraft, causing concern among consumers, investors, and lawmakers. A mid-air door plug blowout on an Alaska Airlines flight in January led to a temporary grounding of Boeing’s 737 Max jets, an FAA investigation, and an order to halt planned production increases of the company’s most important model.

The near-catastrophe prompted US lawmakers to call Calhoun to testify before Congress, where senators criticized the company’s safety culture and demanded significant change. In late April, proxy adviser Glass Lewis & Co. also urged shareholders to vote against the reelection of Calhoun and two other directors due to concerns about oversight of the company’s safety culture.

ISS has expressed cautious support for the reelection of David Joyce, who leads the aerospace safety committee, citing the need for quality control issues to be fully resolved for Boeing to regain public confidence. The ongoing challenges facing Boeing highlight the importance of strong corporate governance and accountability in the aerospace industry.