Boeing faces a critical investor vote as it hunts for a new CEO

That opens the door to industry outsiders, and it’s heightened interest in the intentions of the former technology executive leading the recruitment drive: Boeing Chairman Steve Mollenkopf, the former Qualcomm Inc. CEO, an engineer by training who’s no stranger to corporate turmoil. 

Mollenkopf isn’t tipping his hand as to the search process. Privately, he’s been sounding out Boeing suppliers and airline customers on their frustrations to get a better sense of the magnitude of the clean-up facing the company’s next leader. His methodical fact-finding suggests the CEO hunt is still in the early stages, with executive search firm Russell Reynolds Associates Inc. aiding the process, according to people familiar with the process.

That adds to the intrigue as Mollenkopf makes his first public appearance as chairman at Boeing’s annual general meeting on Friday. While such gatherings are often mundane affairs, the virtual session will be closely watched for any hints Mollenkopf and current CEO Dave Calhoun provide on the state of affairs. 

Even the election of directors will contain an element of drama: proxy adviser Glass Lewis & Co. recommended investors vote against Calhoun and directors David Joyce and Akhil Johri, citing “significant concerns” about the planemaker’s safety culture. The State Board Administration of Florida disclosed that it followed that advice. The state’s investment management arm, which holds 602,000 Boeing shares, also voted against the company’s executive compensation plan.

The choice of Calhoun’s successor is one of the most consequential decisions in years for Boeing directors. The aerospace giant’s troubles span federal investigations of its manufacturing quality controls, growing financial strains, a possible prosecution, a customer revolt that led to management upheaval and eroding market share to a driven competitor in Airbus SE. 

“The months and years ahead are critically important,” Mollenkopf said in an April letter to shareholders. “The world needs a healthy, safe, and successful Boeing. And that is what it is going to get.”

Boeing’s dizzying fall from grace following a near-catastrophe in January on air-bound 737 Max 9 plane exposed the damage from a gradual cultural shift over a quarter-century that put more focus on financial returns than production methods. Whoever takes over from Calhoun, who’s said he’s staying until the end of the year at the latest, will need to reboot the company’s safety culture, fix relations with frustrated airlines and rebuild market share that’s been slipping in favor of Airbus. 

Given the enormity of the challenges, Boeing can’t afford to grant its next leader a long learning curve. But the underlying businesses aren’t easy for outsiders to master, being a blend of highly complex engineering, high-volume manufacturing and machines built to the highest safety standard, said Richard Aboulafia, a consultant and longtime aviation analyst.

“You have to love this industry and have a deep desire to fix a badly broken company,” Aboulafia said of the attributes needed for Boeing’s next CEO. 

Employees and investors would probably look dimly on tapping the Boeing board for one of its own after the mixed track record of Calhoun, a long-time director. Mollenkopf himself has been a director since 2020. He declined to be interviewed for this story.

“Anybody who’s been on the board for more than one or two years has some explaining to do,” Aboulafia said. 

In Mollenkopf, 55, Boeing has a chairman who’s seen more than his fair share of corporate crises. He’s an electrical engineer and inventor who holds three dozen patents, along with degrees from the University of Michigan and Virginia Tech. The latter also counts Calhoun among its alumni.

In his seven years as CEO of Qualcomm, the company he joined out of college, Mollenkopf faced a panoply of challenges that threated to force the chipmaker out of existence.

Prompted by the lobbying of some of the largest companies in the world, regulators from China to the European Union and the US launched investigations that challenged Qualcomm’s most profitable business: technology licensing. He faced a challenge by activist shareholders and a hostile takeover. Apple Inc., a dominant force in the mobile phone industry where Qualcomm’s earns its living, pursued a bitter legal campaign against the company.

Mollenkopf prevailed, but only just. A common denominator in all of it was his belief that the best technology wins in the end. Apple was forced to give up its attempts to overturn Qualcomm’s technology licensing business because the San Diego-based company’s mastery of wireless communications was irreplaceable. Apple is still using its chips in the iPhone to this day. Broadcom Inc.’s $117-billion attempt to buy Qualcomm was foiled by the Trump Administration.

Throughout the twists and turns, Mollenkopf never broke character. He’s remained an understated engineer focusing his comments on the merits of particular technologies and shying away from aggressive promises or hype, according to people who know him. Those same attributes will come to the fore when he leads the search for what is arguably the toughest job in corporate America at the moment: turning around Boeing. 

Following is a list of possible candidates, according to analyst reports and discussions with people close to the talks. The search process remains fluids and no favorite name has emerged:

*Wes Bush, 63 — Former CEO of Northrop Grumman Corp. “Somebody with super-high integrity, a great reputation, somebody who would be well-received in DC and by the regulators,” said Ken Herbert, an analyst at RBC Capital Markets.

*Larry Culp, 61 — CEO who helped revive General Electric Co. Culp’s employment agreement with GE runs through at least Aug. 17, 2024, according to the company’s proxy filing. At that time, he would be eligible to vest a one-time equity award that’s worth more than $300 million at today’s prices. And some Boeing employees might look dimly on having a fourth CEO with a GE pedigree.

*Dave Gitlin, 54 — A Boeing director and CEO of Carrier Global Corp. who has also publicly taken himself out of the running for Boeing. “He ticks a lot of boxes: young, energetic, aerospace guy through and through,” Herbert said.

*Stephanie Pope, 51 — Boeing’s recently appointed COO and head of its commercial airplane division. Pope is well-connected with customers and on Wall Street, and on the CEO track, as per Herbert, who’s known her for more than a decade. Pope is also relatively new to Boeing’s senior ranks. Calhoun’s enthusiastic endorsement of Pope as the next CEO during a recent earnings call surprised some investors.

*Pat Shanahan, 61 — Knows Boeing as a former customer, supplier and engineering leader with three decades of experience. As CEO of Spirit AeroSystems Holdings Inc., he’s in talks to sell Boeing’s largest supplier back to its former corporate owner. At Boeing, Shanahan was best known for getting the 787 Dreamliner on track after a botched start.

*Greg Smith, 57 — Chairman of American Airlines Group Inc. who earlier worked his way from the factory floor to the chief financial officer role at Boeing. He’s well regarded by investors and customers. He played an instrumental role in keeping Boeing afloat during the pandemic, unlocking the credit markets with a $25 billion debt offering.