In the corporate world, once someone achieves the CEO’s position it is going to be very difficult to remove the person. There are a number of reasons which included in many public companies there are no controlling shareholders which means the CEO has to make the institutional shareholders who control the company very disappointed. The CEO reports to the Board, a good CEO ensures that whoever is on the Board they are in constant communication with the CEO, and in reality for most of us, firing a friend is never easy or you may want to give the benefit of doubt because maybe the cycle turns and the CEO will produce great results. When you read a CEO is leaving before his time is over, something drastic has happened and the person generally leaves with a substantial money in his pocket to smooth the transaction. For most employees, they accept the range in which they are employed at, at the CEO level the contracts are negotiated and at the time the Board wants the CEO.

In an article by Sydney Ember and Niraj Chokshi of the New York Times, the CEO of Boeing, Dave Calhourn is stepping down at the end of the year.

The company is under pressure for various safety measures including the grounding of Max aircraft, a door flying off during an Alaska Airlines flight and the FAA is clearly not happy.

Boeing is considered a jewel of a company and has a duopoly with Airbus, the two airlines dominate the commercial aircraft industry with a 95% plus share. Boeing also has a division for planes with the US military. In the world of airlines, being the CEO of Boeing is generally a sweet position. The 2 divisions produce aircraft for the world and more and more people are travelling, airlines need aircraft. In normal times, that translates into profits and dividends.

At Boeing, there were other management changes and safety is the most important issue at Boeing. Remember the slogan at Ford – quality is job 1.

CEO Calhoun tried to put a good face to the announcement saying he has been CEO for 5 years and is 67 years old, but the announcement was made in late April rather than waiting until the May annual meeting. In later reports, Mr. Calhoun will leave with a $24 million payout.

Linking to dividend paying stocks, when you own a stock, you own a piece of the company and can vote at the annual meeting, companies similar to ProxyVote make voting easy. The votes are for the election of the Board of Directors, Appointment of auditors, Advisory votes on executive compensation and Shareholders proposals (shareholders from 1 to many shares can contact the company to go determine who a shareholder proposal is done, but it is possible to have the concern addressed). In addition, shareholders can go to the Annual General Meeting (AGM) and ask a question. For most of us, unless the company is a disappointment, we tend to vote as management recommends, not always but most of the time. If you own shares, you should vote. If you cannot go to the AGM, you can listen online (virtual AGMs are here to stay) or listen to the conference call the company has with analysts.

There are more questions than answers, till the next time – to raising questions.