By Abhijith Ganapavaram
(Reuters) – Proxy advisory firm Glass Lewis has recommended Spirit AeroSystems shareholders vote against the election of two directors, including the head of the aero parts supplier’s risk committee, Ronald Kadish, at the 2024 annual meeting.
Spirit, which is in talks to be bought by its biggest customer Boeing Co, was not immediately available for comment.
The companies have come under regulatory and investor scrutiny following a Jan. 5 mid-air cabin panel blowout on a Boeing 737 MAX 9 jet, the fuselage for which was made by Spirit.
The Federal Aviation Administration said last month its 737 MAX production audit found multiple instances where both the companies allegedly failed to comply with manufacturing quality control requirements.
“We believe that the investigations since the incident, particularly the results of the FAA’s audit, have indicated questionable oversight and management of safety and related risks by the company,” Glass Lewis said in its report.
“Accordingly, we do not believe that the board, and in particular the risk committee, has appropriately addressed potential shareholder concern” regarding safety, legal and regulatory risks, Glass Lewis said.
Kadish, 75, has been a director at Spirit since 2006.
He has held various government and corporate positions in the aerospace and defense industry, including as director of the U.S. Missile Defense Agency between 2002 and 2004 and executive vice president at military contractor Booz Allen Hamilton between 2005-2015.
Glass Lewis also recommended shareholders vote against the election of Laura Wright, chair of Spirit’s governance committee, citing insufficient efforts at improving board diversity.
Spirit’s annual meeting is set to take place on April 24. The company has nominated 11 directors, including CEO Patrick Shanahan, to serve on its board. Ten of those directors are independent.
(Reporting by Abhijith Ganapavaram in Bengaluru and Allison Lampert in Montreal; Editing by Sriraj Kalluvila)
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