Big Law

Did Boeing’s Comp Committee Affect the 737 Scandal?

The compensation committee’s impact on corporate governance goes well beyond the cost of compensation. The compensation committee effectively sets corporate strategy by approving incentives for top management. In the case of the 737 Max, CEO McNerney stressed the importance of reducing business risk (2011 annual report’s letter to shareholders, emphasis added): “With development costs and risks far below an all-new airplane, the 737 MAX will provide customers the capabilities they want, at a price they are willing to pay, on a shorter, more certain timeline. This approach is an all-around winner for Boeing, too. We maintain our qualitative advantage over competitors in the segment, we free up resources to invest in other growth projects, and we reduce our business risk substantially for the next decade.”

Read the source article at lexblog.com

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