By Andrew Tangel 

Boeing Co. on Tuesday cast a vote of confidence in Chief Executive David Calhoun by extending his job for up to five years and said it is searching for a new chief financial officer.

The leadership moves come as Boeing is under continued pressure stemming from two fatal crashes of its 737 MAX and plunge in demand for new airplanes amid the Covid-19 pandemic. The manufacturer's commercial, defense and space divisions also face a host of quality problems, and Mr. Calhoun has presided over efforts to overhaul how Boeing handles engineering and safety matters.

Boeing said Greg Smith, who was considered as a potential successor to the top job, will retire in July after serving as CFO for a decade and briefly serving as interim CEO before Mr. Calhoun took over in January 2020.

Mr. Calhoun, 64 years old, will now face a new mandatory retirement age of 70, rather than the company's typical age of 65. Mr. Calhoun, a director since 2009, is among Boeing's longest-serving board members and served as lead director and chairman before becoming CEO last year.

Without the extension Mr. Calhoun would face retirement in April 2022. The company said Tuesday there wasn't a fixed term with Mr. Calhoun's employment. Chairman Larry Kellner said Boeing had "effectively navigated one of the most challenging and complex periods" in the company's history during Mr. Calhoun's tenure.

Mr. Smith has worked at Boeing for about 30 years. While he most recently served as the company's financial chief, he amassed responsibilities overseeing various company operations during the 737 MAX crisis. The two crashes, which claimed 346 lives, led to a nearly two-year grounding that is estimated to cost the company about $20 billion. Mr. Smith was deeply involved in Boeing's efforts to return the 737 MAX, a top moneymaker, to service and borrow billions of dollars to aid the company as the pandemic worsened.

Boeing's leadership and board have faced several shake-ups in the past two years. In late 2019, the board ousted then-CEO Dennis Muilenburg, installing Mr. Calhoun in the top job. Seven directors who were on the board when the second 737 MAX crashed have left or will depart by Tuesday. The company has four new directors. Shareholders on Tuesday are slated to meet and vote on Boeing's slate of 10 directors.

One proxy advisory firm, Glass Lewis, has recommended that shareholders vote against Mr. Kellner and Edmund Giambastiani, another longtime director who leads a new safety committee on the board. The firm cited their previous service on the board's audit committee, which oversees major risks facing the company. Another proxy firm, Institutional Shareholder Services Inc., recommended shareholders vote for Boeing's slate of directors, giving the company credit for board and management changes and reforms to the company's safety and compliance processes.

Boeing has made progress in overcoming some of its business problems. It recently reached a deal to sell 100 more 737 MAX jets to Southwest Airlines Co. and resumed deliveries of the wide-body Dreamliner in March after a five-month halt. However, there are challenges, including earlier this month when airlines removed dozens of newly-built 737 MAX jets from service after Boeing flagged a potential electrical problem, just months after carriers began flying them again. Boeing said it was working with the Federal Aviation Administration on resolving the issue.

Mr. Smith, who was appointed as Boeing's CFO in 2011, outdid many of his peers at other companies in the S&P 500 and Fortune 500 with regards to the length of his tenure. Finance chiefs at these companies held the role for an average of 4.9 years in 2020, broadly in line with previous years but down from 2015, when the average CFO-tenure was 5.2 years, according to the Crist Kolder volatility report tracking executive moves at large U.S. companies.

--Nina Trentmann contributed to this article.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

 

(END) Dow Jones Newswires

April 20, 2021 10:35 ET (14:35 GMT)

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