The agreement announced Friday between former and current Boeing board members and shareholders who accuse them, after the two 737 Max accidents, of failing to meet their obligations, provides for compensation to the company of $237.5 million.
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The agreement was not ratified by the judge, the agreement was disclosed by the Comptroller Services of New York State, the Association of Retired Firefighters and the Colorado Police, which in June 2020 seized the Delaware Chancery Court.
They criticized board members, including many of the company’s former executives, for not ensuring that controls and information about the safety of the 737 Max were in place and operating properly.
The agreement calls for $237.5 million to be paid by insurers to current and former board members affected by the complaint to Boeing.
The Wall Street Journal, which was first involved in the deal Thursday night, had reported $225 million.
The text also includes the creation of an intermediary position in which some employees can directly report their comments on working conditions as well as the designation of an additional officer with experience “in aviation/aviation, engineering and/or supervision. Product safety”.
It also plans to continue to include standards on aviation safety in calculating executive compensation and to publish an annual report on safety improvements.
The 737 Max was launched in 2011 and first entered service in 2017, and was hit by two planes, one by Lion Air in October 2018 and the other by Ethiopian Airlines in March 2019, killing 346 in total.
Investigations revealed that these incidents are related to the Anti Stall System (MCAS).
Shareholders highlighted the fact that none of the board’s committees specifically deal with safety.
The agreement does not include an admission of negligence on the part of those affected by the actions.
“We have sued the Boeing Board of Directors because it failed to fulfill its responsibility to oversee safety and protect the company, its shareholders and customers from unsafe business practices,” said New York state comptroller Thomas Dianapoli.
“We hope that in the future the reforms agreed upon in this agreement will help protect Boeing and passengers from further tragedies and begin to restore the company’s reputation,” he added.
Since the accidents occurred, “Boeing has taken important steps to demonstrate and strengthen its commitment to aviation safety,” a spokesman for the group said on Friday. The manufacturer has already in 2021 appointed to its board of directors, Stace Harris, who has more than 10,000 flying hours on Boeing aircraft, and David Joyce, the former director of engine maker General Electric.
The spokesperson added that additional reforms provided for in the agreement would “enhance the integrity and quality of our work.”
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