(Updated - March 25, 2024 9:32 AM EDT)
Boeing (NYSE:BA) announced significant management changes on Monday, with Dave Calhoun to step down as CEO at the end of 2024.
Furthermore, Board Chair Larry Kellner has informed the company he does not intend to stand for re-election at the upcoming Boeing annual shareholder meeting, with the board electing Steve Mollenkopf to succeed Kellner as independent board chair. Mollenkopf has served on the Boeing board since 2020. He was previously CEO of Qualcomm.
Meanwhile, Stan Deal, Boeing Commercial Airplanes President and CEO, will retire from the company, with Stephanie Pope appointed to lead the unit, effective today. Kellner has served on the Boeing board for 13 years and served as its chair since late 2019
Boeing shares jumped 3.8% at the open on Monday, climbing above the $196 per share mark before retreating slightly.
The management changes come amid a difficult time for the company which has come under significant scrutiny due to incidents and issues that have raised concerns about the company's quality control, safety standards, and overall governance.
Calhoun will continue to lead Boeing through the year to "complete the critical work underway to stabilize and position the company for the future," said Boeing.
In a letter to employees, Calhoun stated: "The eyes of the world are on us, and I know that we will come through this moment a better company. We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do."
Reacting to the news, analysts at Vertical Research Partners said that "while someone losing their job is rarely something to celebrate, we think that this is probably a wise move by the Boeing board of directors."
"Many of Boeing’s customers, suppliers and other stakeholders have arguably lost faith in the company, while its relations with the FAA and NTSB are clearly strained," added the investment research firm. They believe a change in senior management is "a good first step in addressing the company’s myriad of problems."
However, Vertical Research Partners feels "the major piece that is missing from the puzzle is who will be the next CEO."
"As we commented last week, we think it will require someone with pedigree and patience, as fixing Boeing is probably a multi-year, non-linear journey," said the firm. "Despite this major unknown, we can see Boeing’s share price responding positively to this announcement."
Elsewhere, analysts at Morgan Stanley said the market "generally expected turnover in the senior ranks following Boeing’s latest issues stemming from the Alaska Airlines Flight 1282 incident."
"The timing of David Calhoun’s resignation provides stability throughout the end of the year during a time of uncertainty while providing Boeing time to find a successor," stated the bank. "We expect the market to receive the news positively."