Boeing Stockholders Seek Management Shakeup Following 737 MAX Scandal

The shadow of crisis relating to Boeing’s 737 Max has snowballed into demands for structural changes in the company’s top management.

A couple of shareholder resolutions seeking the split of Boeing’s CEO and chairman positions are now on the table. At present both positions are held by CEO Dennis Muilenburg.

The airplane manufacturer is holding its annual meeting in Chicago on April 29 where shareholders' vote is expected to take place.

Reports said the proposal was submitted long before the March 10 crash involving the 737 Max jet. A similar resolution was defeated last year.

This time the demand has garnered more force from the shareholders.

According to reports, two shareholder advisory firms are guiding stock owners on the matter and the demand for management and board overhaul is strong now.

Investors briefed on CEO, Chairman bifurcation demand

Research firms ISS and Glass Lewis issued notes to investors on how to vote on proxy questions. In a note to investors, ISS mentioned the two fatal crashes of the 737 Max wrought damage to Boeing's reputation.

The note said they stand to benefit from the "robust form of independent oversight to ensure that the company's management is able to regain the confidence of regulators, customers, and other key stakeholders.”

Glass Lewis in its note, advocated a vote in favor of the resolution noting that shareholders are better off if the two positions are separate. However, Glass Lewis did not mix the 737 Max issue with the demand.

Glass Lewis recommended shareholders to vote against director Lawrence Kellner who is heading the audit committee of the board.

The note said the expected oversight was missing from Kellner during the development and the later crisis over 737 Max.

The advisory noted that the audit committee was not proactive enough in identifying the risks associated with the 737 Max.

The note of Glass Lewis also said recent incidents negatively impacted the company's sales and reputation.

Boeing resists split positions

Boeing is opposed to any bifurcation of the chairman and CEO positions and wants shareholders to endorse all current directors, including Kellner.

On crisis management, it is being pointed out that Boeing CEO has already formed a committee of independent directors to review policies on the design and development of its airplanes.

Trump suggests rebranding

Meanwhile, President Donald Trump urged Boeing to rebrand its 737 MAX jetliner.

In a Monday tweet, Trump said, “What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name. No product has suffered like this one. But again, what the hell do I know?.”

But Trump has some experience in private aviation as a former owner of Trump Shuttle airline during the early 1990s.