The board of jet maker Boeing on Tuesday cast a vote of confidence in its CEO, David Calhoun, by extending his job for up to five years. On the same day, it announced its CFO of ten years, Greg Smith, will be retiring in July.
Boeing raised its mandatory retirement age from 65 to 70 specially for Calhoun, who turned 64 on Sunday. Calhoun, a former Blackstone and GE executive and long-time Boeing board member, was named chairman in October 2019. He relinquished that role when he was named CEO in December 2019, after the board pushed out Dennis Muilenburg over his handling of the 737 MAX plane crashes.
- Smith, who the Wall Street Journal said was considered a leading candidate to replace Calhoun, has been with Boeing for more than 30 years. He briefly served as interim CEO before Calhoun took the reins in January 2020.
Smith last year led the largest bond offering in the company's history, and the largest of any company.
As CFO, Smith has been credited with Boeing’s business transformation, which in the past year has centered on cost-cutting.
Prior to becoming CFO, Smith was Boeing’s corporate controller and vice president of finance, focusing on regulatory compliance. He has also overseen enterprise performance and strategy and operations, finance and sustainability. He decided on his own to retire, two people familiar with his thinking told Reuters.
Before the announcement, Smith was rumored to be Boeing’s future CEO, Reuters said, but some Boeing execs criticized Smith’s policy of carrying out regular share buybacks, saying it left the company “without enough in reserve” to manage through the pandemic.
Calhoun’s tenure as CEO has been marked by crisis. The pandemic began only weeks after he took the helm, and in 2020, Boeing lost $11.9 billion, up from $636 million in 2019.
The board’s decision to raise the retirement age was based on “the substantial progress Boeing has made under [Calhoun’s] leadership, as well as the continuity necessary to thrive in our long-cycle industry,” Chairman Larry Kellner said in a statement.
Prolonging Calhoun’s tenure is the jet maker’s attempt at “signaling stability and […] a play for continuity” following the back-to-back 737 MAX and coronavirus crises, Reuters reported.
Calhoun told shareholders the company would be cash-flow positive in the near or medium term, and, as travel picks back up, it prioritizes paying down its debt, according to Reuters.