The opinions expressed by Entrepreneur authors are their very own.
Boeing CEO David Calhoun’s tenure has been marred by serious quality control failures, poor leadership and poor performance. His announced departure at the end of 2024, many say, cannot come soon enough. In the face of those crises, Calhoun’s proposed $32.8 million compensation package is not only unjustified, but an insult to all stakeholders demanding accountability and change.
Under Calhoun’s leadership, Boeing faced a series of safety problems and lawsuits, including the explosion of door plugs on an Alaska Airlines flight that led to the temporary grounding of 737 Max planes and a Federal Aviation Administration investigation. These incidents highlight a breakdown in safety culture that has sparked outrage among consumers, investors and lawmakers alike.
Institutional Shareholder Services (ISS) and Glass Lewis & Co. Boeing investors are right to call for this vote against Calhoun’s excessive compensation package. During Calhoun’s tenure so far, Boeing shares have fallen greater than 45% (price as of May 13, 2024), and he still stands to receive a 45% raise.
Rewarding leadership failures sends the mistaken message and undermines efforts to carry the company accountable for its shortcomings. Glass Lewis’s appeal to reject Calhoun’s re-election and two other executives responsible for overseeing the company’s security practices emphasize the urgent need for a leadership change.
Workers who have experienced the effects of quality control problems and the resulting operational disruptions could be rightly incensed by Calhoun’s proposed wage increase. While employees face uncertainty and stress, seeing their leader receive a huge raise in the face of confusion only deepens their frustration and lowers morale. It highlights the disconnect between executive leadership and the on a regular basis reality faced by Boeing employees.
Rewarding Calhoun with a significant raise suggests that Boeing is indifferent to serious service and safety lapses under his tenure. Instead of rewarding failure, Boeing’s board should focus on leadership that prioritizes transparency, accountability, safety and excellence.
My application
Boeing management can profit from adopting a proactive and honest communications strategy. Regular updates, direct collaboration with employees, investors and the public, and a clear plan to handle and remediate security issues are key. This approach is not only about managing perceptions; it’s about rebuilding trust from the inside. If the CEO goes down and gets paid, the same goes for the employees, right?
Seriously, how do you approach employees with this information? This is not real leadership and employees can see it. Communicate not only with words but with actions by voting against the increase. With Calhoun stepping down, Boeing has a probability to reset its leadership and restore its repute. Investors are encouraged to reject the current compensation package proposal and as a substitute invest in leadership that requires a commitment to excellence. Excellence is rewarded, not failure.
There’s nothing mistaken with letting Mr. Calhoun down, but would you do the same for your employees to get wealthy from poor performance?