Boeing (BA 2.28%) shares are under pressure on Tuesday after the aerospace giant said its chief financial officer is retiring. Investors sometimes view executive departures as a harbinger of bad news, and the stock is off by nearly 5%.
On Tuesday, before markets opened, Boeing announced that CFO Gregory D. Smith would retire effective July 9 after 10 years on the job. Smith is highly regarded on Wall Street, having served briefly last year as interim CEO after Dennis Muilenburg was forced out.
Boeing also said the board had approved extending the company's standard CEO retirement age from 65 to 70, allowing 64-year-old Dave Calhoun, Muilenburg's permanent replacement, more time on the job.
Investors in Boeing have endured a turbulent couple of years. The company's flagship 737 MAX was grounded in March 2019 after a pair of fatal accidents, raising difficult questions about company management that eventually led to Muilenburg's ouster. Boeing also saw sales of its other models dry up last year as airlines were forced to scale back, due to the pandemic.
Given all the issues Boeing has had, it's easy to see why news of Smith's departure would put investors on edge, putting the shares under pressure.
Although it's always impossible to know for sure what's going on, there's good reason to believe investors are overacting to this news. Smith, as mentioned, is highly regarded, and was seen by some as an eventual CEO. It's likely that the two announcements are related: Now that Smith knows Calhoun won't be departing later this year, he's likely looking for a new challenge.
Regardless of why Smith is leaving, investors will be eagerly watching to see who Boeing finds to replace him. At the risk of speculating, I'd note that one-time United Technologies CFO Akhil Johri, who left when UTC merged with Raytheon to create Raytheon Technologies, joined the Boeing board last year.