By Sanjana Shivdas and Eric M. Johnson
(Reuters) -Boeing Co announced the retirement of its finance chief for the past decade, Greg Smith, and the crisis-hit jetmaker's shares fell 4% even as it signaled stability by prolonging its chief executive.
Boeing (NYSE:BA) extended its required retirement age of 65 to 70 to allow CEO Dave Calhoun to stay in the top job as the U.S. planemaker battles to recover from the coronavirus and 737 MAX crises, and manufacturing flaws on its aircraft programs. [L1N2M91WF]
But shares fell as investors were rattled by the surprise retirement of Smith, 54, Boeing's face to financial markets during one of the most turbulent periods in its history, marked by a safety crisis followed by rising debts during the pandemic.
Calhoun told shareholders at the annual meeting that Boeing would have positive cash flow in the near or medium term, and will prioritize paying down its debt as travel markets and plane demand rebound. Boeing has seen signs of recovery in the single-aisle market.
In midday trading, shares were down about 4% at $234.41.
Smith, a 30-year Boeing veteran set to retire in July, led the largest bond offering in company history and has been leading a business transformation with cost-cutting and shuffling resources to strengthen Boeing once the COVID-19 and 737 MAX crises ebb.
Many in the industry saw Smith as a future CEO when Boeing was riding high on record production and stock prices until 2019. But some in the company criticized his policy of carrying out regular share buybacks, saying it left insufficient resources to tackle the severe downturn.
European rival Airbus SE (OTC:EADSY), by contrast, has weathered the crisis comparatively well while maintaining higher research spending.
That said, Smith had to handle two unprecedented overlapping crises - the collapse of income surrounding the lengthy grounding of the 737 MAX after fatal crashes and the global pandemic that slammed aviation companies globally.
Smith decided on his own to retire, two people familiar with his thinking said.
Smith was appointed chief financial officer in 2011. He then served in additional roles as the executive vice president of Finance, Enterprise Performance and Strategy, and then executive vice president of Enterprise Operations, Finance and Sustainability.
Prior to becoming CFO, he was corporate controller and vice president of finance, Boeing's principal liaison with the board of directors' audit committee on regulatory compliance.
Calhoun, a former executive at Blackstone (NYSE:BX) private equity group and experienced corporate crisis manager and a Boeing board member 2009, was named CEO in December after the board ousted Dennis Muilenburg.
That came after Calhoun was named chairman in October 2019. He gave up the chairmanship when he became CEO.
Calhoun told employees in January he sees "opportunities to be better. Much better."
In January, the board approved a $1.4 million annual salary for Calhoun and long-term compensation of $26.5 million if he achieves several milestones.