Boeing won’t force CEO Dave Calhoun to retire just because he’ll be turning 65

Dave Calhoun, head of private equity portfolio operations for Blackstone Group LP, speaks during a Bloomberg Television interview in New York, U.S., on Tuesday, Oct. 17, 2017. Calhoun discussed optimism among CEOs, the need for U.S. infrastructure development, and business returning to private equity. Photographer: Christopher Goodney/Bloomberg via Getty Images

(CNN) — Dave Calhoun, Boeing’s CEO for the company’s worst year ever, will get to stay around to try to lead the aerospace giant’s rebound for the foreseeable future.

That’s because the Boeing board announced it is raising its executive retirement age. Calhoun just turned 64 this week, and normally the mandatory retirement age for Boeing executives is 65. But the company announced that its board of directors Tuesday extended to age 70 for Calhoun.

The company also announced that CFO Greg Smith is retiring effective July 9. Smith is 54.

Calhoun became CEO in January 2020, about halfway through the 20-month grounding of the 737 Max, which cost the company more than $20 billion, after the board removed predecessor Dennis Muilenburg. He signaled he intended to stay in the job in his first press conference in his job.

“I plan to work well past 65,” he said at that time. “The board can have me as long as they want me.”

The board agreed that Calhoun remains the best man for the job.

“Under Dave’s strong leadership, Boeing has effectively navigated one of the most challenging and complex periods in its long history,” said Boeing Chairman Larry Kellner in a statement. “His dedication to renewing the company’s commitment to safety, quality and transparency has been critical in building regulator and customer confidence as Boeing returns the 737 Max to service. And, in the face of unprecedented challenges brought on by the global pandemic, he has taken proactive actions to ensure Boeing remains strongly positioned for the recovery in the aviation industry.”

Those steps include taking on additional debt to build up its cash reserves, suspending its dividend, and announcing plans to trim 23,000 jobs, mostly at the company’s commercial airplane business. Many of the job cuts have been accomplished through voluntary buyouts rather than involuntary staff cuts.

A rocky tenure

Boeing’s decision to retain Calhoun was criticized by some family members of the victims of the two fatal crashes that led to the 737 Max grounding. They point out that while he had only been CEO since the start of 2020, he had been on the Boeing board since 2009.

“Boeing needs to search for new leadership with demonstrated experience in and commitment to great engineering, flawless manufacturing and reinvesting in the business for the long term,” said Michael Stumo, whose daughter Samya died in the Ethiopian Airlines crash in March of 2019.

During his time on the Boeing board “Calhoun voted to spend profits to buy back stock and boost the share price for executive enrichment. He did not vote to reinvest those profits into safer designs, quality personnel and manufacturing excellence,” Stumo said.

Although Calhoun took the job with the 737 Max already grounded, some of Boeing’s problems occurred on his watch. The 787 Dreamliner had its own production problems discovered last year that halted deliveries, and Boeing announced it was recommending a new grounding of the 737 Max earlier this month due to a new electrical problem discovered by its engineers.

Calhoun told shareholders Tuesday he couldn’t give a date for when the grounded Max jets would be allowed to fly once again.

“I believe it will be in relatively short order,” he said. “Those efforts will be measured in days, not weeks or months.”

The news of the extension came the day Boeing is holding its annual shareholder meeting. Shares of Boeing plunged 71% in Calhoun’s first three months as CEO as the pandemic brought demand for new planes to a near halt. But shares have rebounded since then are now down 27% since he took the over in the job.

“Given the substantial progress Boeing has made under Dave’s leadership, as well as the continuity necessary to thrive in our long-cycle industry, the board has determined that it is in the best interests of the company and its stakeholders to allow the board and Dave the flexibility for him to continue in his role beyond the company’s standard retirement age,” said Kellner.