The Boeing Co

Home , Dennis Muilenburg, Lynn Good, Susan Schwab

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ISS Proxy Analysis & Benchmark Policy Voting Recommendations Meeting Type: Annual Meeting Date: 29 April 2019 The Boeing Co. Record Date: 28 February 2019 Meeting ID: 1308084 Key Takeaways New York Stock Exchange: BA In light of uncertainty over the long-term impact of safety problems with the Index: S&P 500 company's 737 Max aircraft, cautionary support is warranted for the members Sector: Aerospace & Defense of the audit committee, which is responsible for compliance and risk GICS: 20101010 assessment and management. Primary Contacts Support is warranted for the proposed policy to require an independent board Marc Goldstein, JD chair, as shareholders would benefit from the most robust form of independent Enver Fitch – E&S U.S. Research Help Center oversight to ensure that the company's management is able to regain the confidence of regulators, customers and other key stakeholders. Support is warranted for the proposed amendment to the proxy access right, which would remove the shareholder aggregation limit, and would enhance the company's existing right for shareholders. Support is warranted for the proposal on lobbying disclosure, as additional information about related policies and procedures would aid shareholders in assessing the company's management of its political activities.

Agenda & Recommendations Policy: United States Incorporated: Delaware, USA Item Code Proposal Board Rec. ISS Rec.

MANAGEMENT PROPOSALS

1a M0201 Elect Director Robert A. Bradway FOR FOR

1b M0201 Elect Director David L. Calhoun FOR FOR

1c M0201 Elect Director Arthur D. Collins, Jr. FOR FOR

1d M0201 Elect Director Edmund P. Giambastiani, Jr. FOR FOR

1e M0201 Elect Director Lynn J. Good FOR FOR

1f M0201 Elect Director Nikki R. Haley FOR FOR

1g M0201 Elect Director Lawrence W. Kellner FOR FOR

1h M0201 Elect Director Caroline B. Kennedy FOR FOR

1i M0201 Elect Director Edward M. Liddy FOR FOR

1j M0201 Elect Director Dennis A. Muilenburg FOR FOR

1k M0201 Elect Director Susan C. Schwab FOR FOR

1l M0201 Elect Director Ronald A. Williams FOR FOR

1m M0201 Elect Director Mike S. Zafirovski FOR FOR

2 M0550 Advisory Vote to Ratify Named Executive Officers' Compensation FOR FOR

3 M0101 Ratify Deloitte & Touche LLP as Auditors FOR FOR

Report Contents Financial Highlights 3 Vote Results 12 Corporate Governance Profile 4 Meeting Agenda and Proposals 13 Board Profile 6 Equity Ownership Profile 35 Compensation Profile 8 Additional Information 35 QualityScore 10 * ISS Environmental and Social QualityScore is newly introduced for 2018 and is based on company disclosure and transparency practices. © 2019 Institutional Shareholder Services Inc. All Rights Reserved. This proxy analysis and the information herein may not be reproduced or disseminated in whole or in part without prior written permission from ISS.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

SHAREHOLDER PROPOSALS

4 S0808 Report on Lobbying Payments and Policy AGAINST FOR

5 S0531 Adjust Executive Compensation Metrics for Share Buybacks AGAINST AGAINST

6 S0107 Require Independent Board Chairman AGAINST FOR

7 S0226 Amend Proxy Access Right AGAINST FOR

8 S0500 Adopt Share Retention Policy For Senior Executives AGAINST FOR Shading indicates that ISS recommendation differs from Board recommendation  Items deserving attention due to contentious issues or controversy

ISS-Company Dialogue Dates Topic Initiated By Notes March 30, Draft Review ISS The company was given the opportunity to review a draft of this 2019 analysis for fact-checking purposes. Note: ISS engages in ongoing dialogue with issuers in order to ask for additional information or clarification, but not to engage on behalf of its clients. Any draft review which may occur as part of this process is done for purposes of data verification only. All ISS recommendations are based solely upon publicly disclosed information.

Material Company Updates Item Summary 737 Max Following two fatal accidents in a five-month period, Boeing 737 Max aircraft have been grounded worldwide. The company is said to be finalizing a software update for these aircraft, but airlines will need to update each plane and receive regulatory approval before flights can resume. For further discussion, see Item 1 below. Joint Ventures with Embraer On July 5, 2018, Boeing and Embraer announced that they had signed a Memorandum of Understanding proposing the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would "strategically align with Boeing's commercial development, production, marketing and lifecycle services operations." Under the terms of the agreement, Boeing and Embraer will hold stakes of 80 percent and 20 percent, respectively, in the joint venture. On Jan. 24, 2019, Boeing and Embraer entered into a Master Transaction Agreement pursuant to which Embraer agreed to contribute certain assets and liabilities related to its commercial aviation business to a newly created subsidiary, and Boeing's Brazilian subsidiary agreed to acquire an 80 percent interest in that new company at an aggregate value of approximately $4.2 billion. The companies also agreed to establish a separate joint venture, 51 percent owned by Embraer, related to Embraer's KC-390 military aircraft. The transactions were approved by Embraer shareholders on Feb. 26, 2019, and the companies expect to obtain regulatory approvals and satisfy other closing conditions by the end of 2019.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Financial Highlights Company Description: The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sales, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide.

STOCK PRICE PERFORMANCE TOTAL SHAREHOLDER RETURNS 1 Yr 3 Yr 5 Yr 250% Company TSR (%) 11.50 34.15 21.82 200% GICS 2010 TSR (%) -16.69 10.45 3.31 S&P500 TSR (%) -4.38 9.26 8.49 150% Source: Compustat. As of last day of company FY end month: 12/31/2018 100% COMPANY SNAPSHOT 50% Market Cap (M) 248,570.8 0% Closing Price 439.96 -50% Annual Dividend 7.19 -100% 52-Week High 441.42 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 52-Week Low 292.47 The Boeing Co. Shares Outstanding (M) 564.99 MSCI ACWI: Aerospace & Defense (GICS: 201010) Average daily trading volume (prior mo)* 4,511.48 S&P 500 As of February 28, 2019 (All currency in USD) * Trading Volume in thousands of shares

FINANCIAL & OPERATIONAL PERFORMANCE Historical Performance (FY ending) Compared to Peers (Compustat FY*) – 2018 All currency in USD 12/2014 12/2015 12/2016 12/2017 12/2018 GD LMT NOC UTX GE Earnings General Lockheed Northrop United General Dynamics Martin Grumman Technologie Electric Co. Corp. Corp. Corp. s Corp. Revenue (M) 90,762 96,114 94,571 93,392 101,127 36,193 53,762 30,095 66,501 121,615 Net Income (M) 5,446 5,176 5,034 8,458 10,460 3,345 5,046 3,229 5,269 -22,355 EBITDA (M) 9,240 8,815 8,470 11,911 13,698 5,220 8,616 4,707 9,760 19,767 EPS (USD) 7.47 7.52 7.70 13.60 18.05 11.37 17.74 18.59 6.58 -2.43 EPS Y/Y Growth (%) 24 1 2 77 33 17 165 61 14 -257 Profitability Pretax Net Margin (%) 8 7 6 11 12 11 11 12 13 -17 EBITDA Margin (%) 10 9 9 13 14 14 16 16 15 16 Return on Equity (%) 63 82 599 2,309 3,086 29 362 39 14 -68 Return on Assets (%) 6 6 5 9 9 7 11 9 4 -7 ROIC (%) 32 34 47 80 95 14 36 15 6 -14 Leverage Debt/Assets 9 11 11 12 12 28 31 39 34 36 Debt/Equity 105 157 1,218 3,132 4,085 109 1,012 178 118 355 Cash Flows Operating (M) 8,858 9,363 10,499 13,344 15,322 3,128 3,138 3,827 6,322 4,246 Investing (M) 2,467 -1,846 -3,380 -2,062 -4,621 -10,234 -1,075 -8,878 -16,973 18,239 Financing (M) -8,593 -7,920 -9,587 -11,350 -11,722 5,086 -4,152 -4,595 7,965 -31,033 Net Change (M) 2,645 -431 -2,501 12 -1,074 -2,020 -2,089 -9,646 -2,806 -9,176 Valuation & Performance Price/Earnings 17.40 19.20 20.20 21.70 17.90 13.80 14.80 13.20 16.20 N/A Annual TSR (%) -2.63 14.13 11.32 94.50 11.50 -21.29 -16.33 -18.95 -14.67 -55.34 Source: Compustat. *Note: Compustat standardizes financial data and fiscal year designations to allow for meaningful comparison across companies. Compustat data may differ from companies' disclosed financials and does not incorporate non-trading equity units. Peers shown here represent closest industry peers drawn from those peers used in ISS’ pay-for-performance analysis. See www.issgovernance.com/policy-gateway/company-financials-faq/ for more information. Publication Date: 2 April 2019 Page 3

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Corporate Governance Profile BOARD SUMMARY SHAREHOLDER RIGHTS SUMMARY Chairman classification Executive Director Separate chair/CEO No Controlled company No Independent lead director Yes Classified board No Voting standard Majority Dual-class stock No Plurality carveout for contested elections Yes Vote standard for mergers/acquisitions Majority Resignation policy Yes Vote standard for charter amendment Majority Total director ownership (000 shares) 456 Total director ownership (%) < 1 Vote standard for bylaw amendment Majority Percentage of directors owning stock 92.3% Shareholder right to call special Yes, 25% Number of directors attending < 75% of 0 meetings meetings Material restrictions on right to call No Average director age 62 years special meetings Average director tenure 7 years Shareholder right to act by written No Percentage of women on board 31% consent Cumulative voting No Board authorized to issue blank-check Yes preferred stock Poison pill No Proxy Access Yes - Ownership requirement (%) 3 - Time requirement (years) 3 - Nomination limit (% of seats) 20 - Nomination limit (# of nominees) 2 - Aggregation cap (# of nominators) 20

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Board & Committee Composition The information provided in the charts and tables below is based on ISS data records, which rely on disclosures in proxy materials and other public sources available as of the date set forth below (for the general meeting under review) and, with respect to information from prior years, information that was available ahead of each year’s annual general meeting at the time of ISS’ report for that meeting. As such, these charts and tables might not reflect changes to the board composition and/or other covered elements subsequently disclosed by the issuer after ISS’ publications or between general meetings. Independence values refer to ISS Independence classifications (“Exec”: Executive Director; “N-Ind.”: Non-Independent Director; “Ind.”: Independent Director). as of April 29, 2019 Board

Audit Comp Nom

Ind.: Ind.: Ind.: 100%, 7 100%, 4 100%, 4

Ind.: 92%, 12

Exec.: Meetings last FY:10 Meetings last FY:7 Meetings last FY:6

8%, 1 Exec N-Ind. Ind. Meetings last FY:7

Independence History Gender Diversity Trend 100% 100% 90% 98% 80% 96% 70% 69% 94% 60% 92% 50%

90% 40%

88% 30% 31%

86% 20% 10% 84% 2015 2016 2017 2018 After AGM 0% Board 90% 92% 92% 92% 92% 2015 2016 2017 2018 After AGM Audit Com 100% 100% 100% 100% 100% male 90% 83% 85% 77% 69% Comp Com 100% 100% 100% 100% 100% female 10% 17% 15% 23% 31%

Nom Com 100% 100% 100% 100% 100%

Director tenure

0 2 4 6 8 10 12 14 16 18

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Board Profile (after upcoming meeting)

Item # Executive Directors Affiliation Independence Leadership Gender Age Tenure Term Committee Ends Co. ISS Audit Comp Nom Gov 1j Dennis Muilenburg Exec Exec CEO, Chair M 55 3 2020

Non-Executive Directors 1b David Calhoun Ind. Ind. Lead Dir M 61 10 2020 M C C 1a Robert Bradway Ind. Ind. M 56 2 2020 F 1c Arthur (Art) Collins Jr. Ind. Ind. M 71 12 2020 C M M 1d Edmund Giambastiani Jr. Ind. Ind. M 70 10 2020 M 1e Lynn Good Ind. Ind. F 59 3 2020 F 1f Nikki Haley Ind. Ind. F 47 NEW 2020 1g Lawrence Kellner Ind. Ind. M 60 7 2020 C F 1h Caroline Kennedy Ind. Ind. F 61 1 2020 M 1i Edward Liddy Ind. Ind. M 73 9 2020 M M M 1k Susan Schwab Ind. Ind. F 63 9 2020 M 1l Ronald Williams Ind. Ind. M 69 9 2020 F 1m Mike Zafirovski Ind. Ind. M 65 15 2020 M M M 100% 100% 100% 100% 92% Ind. 92% Ind. 31% F Ave: 62 Ave: 7 Ave: 1 Ind. Ind. Ind. Ind. Committee Membership: M = Member | C = Chair | F = Financial Expert

DIRECTOR NOTES Lynn Good Deloitte & Touche LLP serves as the company's independent registered public accounting firm and was paid $30.6 million and $31 million for serving in such capacity during fiscal years 2018 and 2017, respectively. Prior to joining Duke Energy, Lynn Good served as an audit partner of Deloitte. (Source: DEF14A, 3/15/19, pp. 7, 50.)

COMMITMENTS AT PUBLIC COMPANIES # of Board Committee Ownership Director Name Company Name Mandate Type CEO boards Chair Audit Comp Nom # % stock % votes Dennis Muilenburg 2 The Boeing Co. Executive Director ✓ ✓ 164,609 <1 <1 Caterpillar Inc. Non-Executive Director F David Calhoun 3 The Boeing Co. Non-Executive Director M C 27,014 <1 <1 Caterpillar Inc. Non-Executive Director M Gates Industrial Corp. Plc Non-Executive Director Robert Bradway 2 The Boeing Co. Non-Executive Director F 3,169 <1 <1 Amgen, Inc. Executive Director ✓ ✓ Arthur (Art) Collins Jr. 3 The Boeing Co. Non-Executive Director C M 41,201 <1 <1 Arconic, Inc. Non-Executive Director M C U.S. Bancorp Non-Executive Director M C Edmund Giambastiani Jr. 3 The Boeing Co. Non-Executive Director M 15,407 <1 <1 THL Credit, Inc. Non-Executive Director M M Oppenheimer AMT-Free Municipals Non-Executive Director M Oppenheimer Capital Appreciation Fund Non-Executive Director M Oppenheimer Developing Markets Fund Non-Executive Director M Oppenheimer Discovery Fund Non-Executive Director M Oppenheimer Discovery Mid Cap Growth Non-Executive Director M Fund Oppenheimer Dividend Opportunity Non-Executive Director M Fund Oppenheimer Equity Income Fund Non-Executive Director M Oppenheimer Global Focus Fund Non-Executive Director M

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Oppenheimer Global Fund Non-Executive Director M Oppenheimer Global Opportunities Fund Non-Executive Director M Oppenheimer Gold & Special Minerals Non-Executive Director M Fund Oppenheimer Government Money Non-Executive Director M Market Fund Oppenheimer Institutional Government Non-Executive Director M Money Market Fund Oppenheimer Intermediate Term Non-Executive Director M Municipal Fund Oppenheimer International Diversified Non-Executive Director M Fund Oppenheimer International Equity Fund Non-Executive Director M Oppenheimer International Growth Fund Non-Executive Director M Oppenheimer International Small Mid Non-Executive Director M Company Fund Oppenheimer Limited Term Bond Fund Non-Executive Director M Oppenheimer Mid Cap Value Fund Non-Executive Director M Oppenheimer Municipal Fund Non-Executive Director M Oppenheimer Municipal Fund Non-Executive Director M Oppenheimer Portfolio Series Non-Executive Director M Oppenheimer Real Estate Fund Non-Executive Director M Oppenheimer Rising Dividends Fund Non-Executive Director M Oppenheimer Rochester Amt Free New Non-Executive Director M York Municipal Fund Oppenheimer Rochester California Non-Executive Director M Municipal Fund Oppenheimer Rochester Fund Municipals Non-Executive Director M Oppenheimer Rochester Limited Term Non-Executive Director M California Muni. Fund Oppenheimer Rochester Limited Term Non-Executive Director M New York Municipal Fund Oppenheimer Short Term Municipal Non-Executive Director M Fund Oppenheimer Value Fund Non-Executive Director M Lynn Good 2 The Boeing Co. Non-Executive Director F 4,551 <1 <1 Duke Energy Corp. Executive Director ✓ ✓ Nikki Haley 1 The Boeing Co. Non-Executive Director 0 0 0 Lawrence Kellner 3 The Boeing Co. Non-Executive Director C F 12,783 <1 <1 Sabre Corp. Non-Executive Director ✓ C Marriott International, Inc. Non-Executive Director C Caroline Kennedy 1 The Boeing Co. Non-Executive Director M 977 <1 <1 Edward Liddy 4 The Boeing Co. Non-Executive Director M M 25,716 <1 <1 Abbott Laboratories Non-Executive Director C F M AbbVie, Inc. Non-Executive Director C 3M Co. Non-Executive Director M C Susan Schwab 4 The Boeing Co. Non-Executive Director M 16,188 <1 <1 FedEx Corp. Non-Executive Director M Marriott International, Inc. Non-Executive Director M Caterpillar Inc. Non-Executive Director M Ronald Williams 3 The Boeing Co. Non-Executive Director F 21,105 <1 <1 American Express Co. Non-Executive Director C M Johnson & Johnson Non-Executive Director C M Mike Zafirovski 2 The Boeing Co. Non-Executive Director M M 48,363 <1 <1 Stericycle, Inc. Non-Executive Director M M

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

DIRECTOR PAY AND ATTENDANCE OVERVIEW MOST RECENT FY Director Name Board Position Attendance (in %) Total Compensation

Dennis Muilenburg ED, CEO, Chair ≥75% ** David Calhoun NED, Comp (M), Nom (C) ≥75% 355,110 Robert Bradway NED, Audit (M) ≥75% 346,000 Arthur (Art) Collins Jr. NED, Comp (C), Nom (M) ≥75% 366,000 Edmund Giambastiani Jr. NED, Audit (M) ≥75% 325,630 Lynn Good NED, Audit (M) ≥75% 315,000 Nikki Haley NED N/A N/A Lawrence Kellner NED, Audit (C) ≥75% 371,000 Caroline Kennedy NED, Audit (M) ≥75% 343,000 Edward Liddy NED, Comp (M), Nom (M) ≥75% 315,000 Susan Schwab NED, Audit (M) ≥75% 346,000 Ronald Williams NED, Audit (M) ≥75% 361,000 Mike Zafirovski NED, Comp (M), Nom (M) ≥75% 346,000 Total 3,789,740 Pay in local currency ED for Executive Directors, NED for Non-Executive Directors **For executive director data, please refer to Executive Pay Overview.

Compensation Profile EXECUTIVE PAY OVERVIEW Executive Title Base Salary Change in Bonus & Restricted Option Total Pension, Non-equity Stock Grant Deferred Comp, Incentives All Other Comp D. Muilenburg Chairman, President and Chief 1,700 1,285 13,076 7,103 0 23,164 Executive Officer L. Caret Executive Vice President, President 872 345 2,564 6,934 0 10,715 and Chief Executive Officer, Boeing Defense, Space & Security G. Smith Chief Financial Officer and Executive 1,032 524 4,575 2,471 0 8,603 Vice President, Enterprise Performance and Strategy G. Hyslop Chief Technology Officer and Senior 602 536 1,298 6,144 0 8,580 Vice President, Boeing Engineering, Test & Technology J. Luttig Executive Vice President and 959 618 4,326 1,848 0 7,751 General Counsel Median CEO Pay ISS Selected Peer Group 1,593 965 3,751 10,698 0 20,338 Company Defined Peers 1,538 1,151 3,901 10,467 0 20,970 Source: ISS. Pay in $thousands. Total pay is sum of all reported pay elements, using ISS' Black-Scholes estimate for option grant-date values. Note: Median total pay will not equal sum of pay elements medians. Company Defined Peers are as disclosed. More information on ISS’ peer group methodology at www.issgovernance.com/policy-gateway/us-compensation-policy-guidance/.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

OPTION VALUATION ASSUMPTIONS CEO PAY MULTIPLES Compared to Multiple For CEO's last FY Grant Company ISS 2nd highest active executive 2.16 Volatility (%)* N/A N/A Average active NEO 2.60 Dividend Yield (%)* N/A N/A ISS peer median 1.14 Term (yrs)* N/A N/A Company peer median 1.10 Risk-free Rate (%)* N/A N/A Median employee/CEO Pay Ratio* 184, 166 Grant date fair value per option* N/A N/A (FY18, FY17) Grant Date Fair Value ($ in 000)** N/A N/A *As disclosed by the company. The company disclosed the median The CEO was not granted stock options in FY2018. compensation of all employees to be $126,991

CEO TALLY SHEET 3-YEAR GRANTED VS. REALIZABLE CEO PAY CEO D. Muilenburg 3-year TSR: 34.15% CEO tenure at FYE: 3.5 years Present value of all accumulated pension: $12,072,212 75,452 Performance- Value of CEO stock owned (excluding options): $72,421,374 based equity Potential Termination Payments 24,184 Involuntary termination without cause: $39,078,776 55,294 STI Cash Termination after a change in control: $39,078,776 8,547 Source: DEF14A 14,028 15,974 LTI Cash 10,975 10,975 Options & time- 15,620 9,153 based stock - - 10,645 10,645 Base + Deferred + Pension + All Granted Pay Realizable Pay other

Source: DEF14A and ISS ($ in thousands)

Granted pay equals the sum of all CEO pay, as disclosed in the proxy statement for the applicable fiscal years, except that equity grant values may be based on ISS' valuation. Realizable pay equals the sum of all cash paid (as disclosed) during the same period, plus the value of all equity grants at the end of the period (based on earned value, if applicable, or re-calculated FV of target level equity awards not yet earned/vested). For additional information, please visit www.issgovernance.com/policy-gateway/us-compensation-policy-guidance/

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Dilution & Burn Rate

DILUTION BURN RATE Dilution (%) Non-Adjusted (%) Adjusted (%) The Boeing Co. 3.73 1-year 0.24 0.72 Peer group median 5.37 3-year average 0.24 0.71

Peer group weighted average 4.30 Peer group 75th percentile 10.72

Dilution is the sum of the total amount of shares available for grant and Burn rate equals the number of shares granted in each fiscal year, including stock outstanding under options and other equity awards (vested and unvested) options, restricted stock (units), actual performance shares delivered under the expressed as a percentage of total basic common shares outstanding as of the long-term incentive plan or earned deferred shares, to employees and directors record date. The dilution figure typically excludes employee stock purchase plans divided by weighted average common shares outstanding. The adjusted burn rate (ESPPs) and 401(k) shares. The underlying information for the company is based places a premium on grants of full-value awards using a multiplier based on the on the company's equity compensation table in the most recent proxy statement company's annual volatility. or 10-K.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Management of Environmental Board Structure Human Rights Risks and Opportunities Compensation Carbon and Climate Labor, Health, and Safety

Shareholder Rights Natural Resources Stakeholders and Society

Audit & Risk Oversight Waste and Toxicity Product Safety, Quality, and Brand

Governance Scores As Of: April 2, 2019 Environmental and Social Scores As Of: April 2, 2019 Last Data Profile Update: April 2, 2019 Last Data Profile Update: Sep. 19, 2018

ISS Governance QualityScore is derived from publicly disclosed data and reporting on company governance disclosure, risk and performance. ISS Environmental and Social QualityScore is based on company disclosure and transparency practices. Scores indicate decile rank among relative index, region (Governance QualityScore), or industry group (Environmental and Social QualityScore). Scores are calculated at each pillar by summing the factor scores in that pillar. Not all factors and not all subcategories have equal weight.

For more information on ISS QualityScore, visit www.issgovernance.com/solutions/qualityscore. For questions, visit ISS Help Center.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Vote Results ANNUAL MEETING 30 APRIL 2018 Proposal Board Rec ISS Rec Disclosed Support Including Support Result Abstains (%)1 Excluding Abstains (%)2 1a Elect Director Robert A. Bradway For For Pass 98.1 98.9 1b Elect Director David L. Calhoun For For Pass 95.8 97.2 1c Elect Director Arthur D. Collins, Jr. For For Pass 96.9 97.7 1d Elect Director Kenneth M. Duberstein For For Pass 96.1 96.8 1e Elect Director Edmund P. Giambastiani, Jr. For For Pass 98.1 98.9 1f Elect Director Lynn J. Good For For Pass 98.2 98.9 1g Elect Director Lawrence W. Kellner For For Pass 98.2 98.9 1h Elect Director Caroline B. Kennedy For For Pass 97.4 98.1 1i Elect Director Edward M. Liddy For For Pass 97.2 98.0 1j Elect Director Dennis A. Muilenburg For For Pass 97.3 98.6 1k Elect Director Susan C. Schwab For For Pass 97.4 98.1 1l Elect Director Ronald A. Williams For For Pass 97.7 98.4 1m Elect Director Mike S. Zafirovski For For Pass 96.4 97.2 2 Advisory Vote to Ratify Named Executive Officers' For For Pass 92.8 93.9 Compensation 3 Ratify Deloitte & Touche LLP as Auditors For For Pass 97.0 97.5 4 Report on Lobbying Payments and Policy Against For Fail 23.7 24.4 5 Reduce Ownership Threshold for Shareholders to Call Against For Fail 36.9 37.3 Special Meeting 6 Require Independent Board Chairman Against Against Fail 24.9 25.2 7 Require Shareholder Approval to Increase Board Size to Against Against Fail 7.7 7.7 More Than 14 Shaded results reflect a majority of votes cast FOR shareholder proposal or AGAINST management proposal or director election 1Support Including Abstains is defined as %FOR/(For + Against + Abstain), as expressed as a percentage. 2Support Excluding Abstains is defined as %FOR/(For + Against), as expressed as a percentage, provided if different from For + Against + Abstain.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Meeting Agenda & Proposals Items 1a-1m. Elect Directors FOR

VOTE RECOMMENDATION A vote FOR audit committee members Bradway, Giambastiani, Good, Kellner, Kennedy, Schwab and Williams is warranted at this time, but with caution. The audit committee's responsibilities include compliance with legal and regulatory requirements as well as Boeing's risk assessment and risk management processes. At this time, there is insufficient evidence to conclude whether or not there have been failures in risk oversight responsibilities at the company relating to its 737 Max aircraft, but grounds for concern exist.

A vote FOR the remaining director nominees is warranted.

Vote Requirement: The company has adopted a majority vote standard (of shares cast) for the election of directors with a plurality carve-out for contested elections, and has a director resignation policy in its bylaws/charter.

Discussion Please see the Board Profile section above for more information on director nominees. ELECTION SUMMARY The company proposes the following (re)elections:

Type of election Nominees Dennis Muilenburg, David Calhoun, Robert Bradway, Arthur (Art) Collins Jr., Edmund Giambastiani Jr., Lynn Good, Lawrence Incumbent board members to be renewed: Kellner, Caroline Kennedy, Edward Liddy, Susan Schwab, Ronald Williams and Mike Zafirovski New board nominee to be elected: Nikki Haley

Terms of candidates Nominees Dennis Muilenburg, David Calhoun, Robert Bradway, Arthur (Art) Collins Jr., Edmund Giambastiani Jr., Lynn Good, Nikki Haley, 1-year term: Lawrence Kellner, Caroline Kennedy, Edward Liddy, Susan Schwab, Ronald Williams and Mike Zafirovski Blank space. INFORMATION ON NEW NOMINEES

Nikki Haley

# Shares held 0

Voting power Less than 1% CEO or Chair N/A positions

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

ISS POLICY COMPLIANCE TABLE

Company-level Nominee impact

Disclosure Names of new nominee(s) Disclosed Biographies of new nominee(s) Disclosed

Independence Board 92% Audit committee 100% Compensation committee 100% Nominating committee 100%

Composition Poor attendance No concerns Executive on a key committee No concerns Combined Chair/CEO N/A Length of term N/A

Blank.

N/A in this market No concerns No impacted nominees Impacted nominees are on ballot

737 MAX INCIDENTS A 737 Max 8 aircraft manufactured by Boeing and operated by Ethiopian Airlines crashed on March 10, 2019, killing everyone on board. This followed the crash of another 737 Max 8, operated by Lion Air, in October 2018. Although both incidents are still under investigation, media reports indicate that investigators have focused on the Maneuvering Characteristics Augmentation System ("MCAS") software meant to prevent a stall, and potentially faulty angle-of-attack sensors that may have caused the MCAS system to improperly engage. Some observers, including U.S. Transportation Secretary Elaine Chao, have raised questions about the company's reported practice of offering certain safety equipment, which is not required by regulators, as extra-cost options. Reportedly, both the Lion Air and Ethiopian Airlines jets lacked an angle-of-attack indicator and a warning light that would have indicated disagreement between angle-of-attack sensors. Other news stories have suggested that development of the 737 Max was rushed due to competitive pressure from the Airbus A320neo; and that Boeing downplayed the differences between the Max and earlier versions of the 737, resulting in potentially inadequate pilot training on new features such as the MCAS. Still other media reports have raised questions about the company's level of involvement in the certification process for the 737 Max, and the quality of its safety analysis. Following the Ethiopian Airlines crash, 737 Max aircraft around the world have been indefinitely grounded, and new deliveries of the model have been halted worldwide. At least one airline, Garuda Indonesia, has requested an order cancellation for Max 8 planes (although it seems likely to switch its order to a different Boeing model); while Norwegian Air became the first airline to demand compensation from Boeing for lost flight time. The company is already facing civil litigation over both the Lion Air and Ethiopian Airlines accidents. As of this writing, Boeing shares are down nearly 8 percent since the March 10 accident, representing an aggregate loss of approximately $18 billion. The U.S. Department of Justice and Federal Bureau of Investigation are reportedly leading an investigation into the certification process for the 737 Max, as well as pilot training materials and the marketing of the aircraft. The U.S. Department of Transportation (DoT) has established a special committee of experts to review the approval process followed by the Federal Aviation Administration (FAA), and the DoT inspector general is conducting an audit of the certification, while the FAA has launched its own inquiry. And US

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Senate and House of Representatives committees are holding hearings and conducting inquiries into the certification of the 737 Max, including the procedures followed by the FAA. Boeing is reportedly finalizing an update to its MCAS software, for which it hopes to receive FAA approval in the coming weeks, although some US lawmakers are said to be raising questions about why the update has taken so long and may call for enhanced scrutiny of the proposed changes. (A company spokesperson was quoted as saying that Boeing would take a thorough and methodical approach to developing and testing the update to ensure the company gets it right; while the FAA has said that it will not give its signoff until it is fully satisfied that Boeing has appropriately addressed all pertinent issues.) Once the FAA approves the new software and related training, each 737 Max will reportedly need to be manually upgraded, and pilots will need to receive training about the software. The company has also reportedly decided to make certain previously-optional equipment standard in new Max aircraft and to retrofit aircraft sold without that equipment. However, Boeing spokespersons have defended the MCAS system, and the overall safety of the 737 Max; and stated that the plane's development and certification were handled in a manner consistent with the company's approach to previous aircraft. CONCLUSION It is too early to tell whether the company's actions will be sufficient to restore the confidence of global safety regulators, airlines, pilots and passengers, or to quantify the long-term impact of the aircraft safety issues on Boeing's profits and share price stemming from the remediations themselves and from order cancellations, compensation to airlines, regulatory actions and lawsuits. Accordingly, at this time, we are not concluding that the board has failed in its risk oversight responsibilities. However, because of the potential for the incidents to have a lasting impact on the company's business, shareholders should continue to monitor the situation. At this time, cautionary support is warranted for the members of the audit committee, whose responsibilities include compliance with legal and regulatory requirements as well as Boeing's risk assessment and risk management processes.

Item 2. Advisory Vote to Ratify Named Executive Officers' Compensation FOR

VOTE RECOMMENDATION A vote FOR this proposal is warranted, as pay and performance are reasonably aligned at this time. BACKGROUND INFORMATION Policies: Advisory Votes on Executive Compensation

Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count against; broker non-votes have no effect)

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Executive Compensation Analysis

COMPONENTS OF PAY CEO Peer Other ($ in thousands) CEO Median NEOs D. Muilenburg D. Muilenburg D. Muilenburg 2018 Change 2017 2016 2018 2018 Base salary 1,700 0.5% 1,691 1,641 1,592 3,465 Deferred comp & pension 0 1,549 957 43 0 All other comp 1,285 30.4% 985 837 415 2,023 Bonus 0 0 0 0 0 Non-equity incentives 13,076 54.7% 8,450 6,431 3,631 12,763 Restricted stock 7,103 26.3% 5,624 5,006 10,698 17,398 Option grant 0 0 0 0 0 Total 23,164 26.6% 18,299 14,872 20,338 35,650 % of Net Income 0.2% 0.3% % of Revenue N/A 0.0% Blank Non-Performance-Based Pay Elements (CEO) Key perquisites ($) Personal aircraft use: 234,237; Life Insurance: 10,159; CEO Aggregate Other Perks: 13,223 Key tax gross-ups on perks ($) None Value of accumulated NQDC* ($) 12,805,889 Present value of all pensions ($) 12,072,212 Years of actual plan service 30.0 Additional years credited service None *Non-qualified Deferred Compensation

Blank Disclosed Benchmarking Targets Base salary None Disclosed Target short-term incentive None Disclosed Target long-term incentive (equity) None Disclosed Target total compensation 50th Percentile Blank Severance/Change-in-Control Arrangements (CEO unless noted) Contractual severance arrangement Executive Layoff Benefit Plan Non-CIC estimated severance ($) 39,078,776

Change-in-Control Severance Arrangement (Executive Layoff Benefit Plan)* Cash severance trigger** Double trigger Cash severance multiple 1 times Cash severance basis Base Salary + Most Recent Bonus Treatment of equity Vest only upon layoff, retirement, disability or death

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Excise tax gross-up** No Estimated CIC severance($) 39,078,776 * The company does not have a change-in-control agreement. The Executive Layoff Benefit Plan provides a separation package in the event an executive is terminated because his/her position is eliminated, but excludes layoffs (i) because of a merger, sale, spin-off, reorganization, or similar transfer of assets or stock, or because of a change in the operator of a facility or a party to a contract, or because of an outsourcing of work, and cases where (ii) the employee either continues in equivalent employment (in the case of a stock sale or similar transaction), or the employee is offered equivalent employment with the new employer, operator, or contractor (or an affiliated business enterprise). **All NEOs considered Compensation Committee Communication & Responsiveness

Disclosure of Metrics/Goals Annual incentives Yes Long-term incentives Yes

Pay Riskiness Discussion Process discussed? Yes Material risks found? No

Risk Mitigators Clawback policy* Yes CEO stock ownership guideline 6X Stock holding period requirements Stock options/Restricted Stock: Until stock ownership guidelines are met *Must apply to cash as well as equity incentives and at least all NEOs.

Pledging/Hedging of Shares Anti-hedging policy Company has a robust policy Anti-pledging policy Company has a robust policy

Compensation Committee Responsiveness MSOP vote results (F/F+A) 2018: 93.9%; 2017: 95.9%; 2016: 94.5% Frequency approved by shareholders Annual with 89.9% support Frequency adopted by company Annual (most recent frequency vote: 2017)

Repricing History Repriced/exchanged underwater No options last FY? Blank

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Pay for Performance Evaluation PAY-FOR-PERFORMANCE QUANTITATIVE SCREEN Measure Result The pay-for-performance quantitative screen uses four measures that together evaluate the alignment of CEO pay and company performance. The Relative Degree of Alignment 79 screen measures alignment over multiple time horizons, on both an absolute Multiple of Median 1.14 and relative basis, using multiple performance measures. The screen is Absolute Pay-TSR Alignment 23 designed to identify outlier companies that demonstrate a significant Initial Quantitative Concern Low quantitative misalignment over time. Financial Performance Assessment 54.0 Overall Quantitative Concern Low

RELATIVE DEGREE OF ALIGNMENT MULTIPLE OF MEDIAN The chart plots percentiles of the annualized 3-year performance and pay Pay in $thousands. The gray band represents 25th to 75th percentile of CEO pay of ISS' selected peer rankings for the company () and ISS' derived peers (). The gray band group, and the blue line represents the 50th percentile. generally indicates alignment

100% CEO total pay is 1.14 times the median of peers.

50% Performance

- 10,000 20,000 30,000 40,000 50,000 0% 0% 50% 100%

Pay ABSOLUTE PAY-TSR ALIGNMENT FINANCIAL PERFORMANCE ASSESSMENT CEO granted pay trends versus value of a $100 investment made on the first Blue boxes indicate the company's quartile rankings compared to ISS' selected peer group in the day of the five-year period. applicable measure/metric, measured over three years. The leftmost box indicates bottom quartile and rightmost box indicates top quartile. $40,000 2.0000 Pay TSR Measure Quartile Ranking vs. Peers $30,000 1.5000 Pay

$20,000 1.0000 Weighted Performance

$10,000 0.5000 Metrics (ranked by Long-Term Quartile Ranking vs. Peers weight) Performance

$- 0.0000 ROIC 69.1 2014 2015 2016 2017 2018 Return on Assets 7.0 2014 2015 2016 2017 2018 Insufficient Data Pay($000) 28,711 13,155 14,872 18,299 23,164 Return on Equity Indexed TSR 97.54 112.97 124.96 239.36 271.84

EBITDA Growth 28.1 CEO W. James Dennis Dennis Dennis Dennis McNerney, Muilenburg Muilenburg Muilenburg Muilenburg Jr.

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EVA PERFORMANCE The below EVA performance information is provided for informational purposes. It does not affect the pay-for-performance quantitative screens.

Measure Quartile Ranking vs. Peers Metrics Long-Term Quartile Ranking vs. Peers Performance Pay EVA Margin 4.28

EVA Performance EVA Spread 9.90

Result 53.39 EVA Momentum (Sales) 0.46

Result equals EVA performance rank minus CEO pay rank. EVA Momentum (Capital) 1.08 A negative result indicates that the CEO pay rank is greater

than the EVA performance rank.

EVA Metrics are calculated by ISS EVA, and are based on audited financial data reported in 10-K and 10-Q filings. For more information on the EVA methodology and metrics, visit https://www.issgovernance.com/solutions/iss-analytics/iss-eva-resource-center/ ISS AND COMPANY PEER GROUPS PEER GROUP SIZE ISS General Electric Co. Selected Size (by revenue) of the ISS, company and overlap peer groups. The (1) gray area represents 0.4 - 2.5 times the company’s revenue. AT&T, Inc. Chevron Corp. 3 Exxon Mobil Corp. Ford Motor Co. 2.5 General Dynamics Corp. Honeywell International, Inc. International Business Johnson & Johnson 2 Shared (13) Machines Corp. Northrop Grumman Corp. 1.5 Lockheed Martin Corp. United Technologies Corp. Procter & Gamble Co. 1 Verizon Communications, 0.5 Inc. 0

3M Co. Caterpillar Inc. Size multiple as target of Company- Cisco Systems, Inc. Intel Corp. Disclosed Microsoft Corp. Raytheon Co. (7) United Parcel Service, Inc. The Boeing Co. ISS Only The shaded area represents the overlap group of companies that are in both ISS’ Shared Company Only comparison group and the company's disclosed CEO compensation benchmarking peer group. Excludes company peers for which financial data is not available. For more information on the ISS peer group methodology, visit https://www.issgovernance.com/policy-gateway/voting-policies/ Data for ISS’ pay-for-performance tests are sourced from proxy disclosures for pay and from Compustat for TSR and financial performance. For more information on ISS' quantitative pay-for-performance evaluation, visit https://www.issgovernance.com/policy-gateway/voting-policies/

Short-Term Cash Incentives Short-term Incentives

CEO STI Opportunities FY 2018 (D. Muilenburg) FY 2017 (D. Muilenburg) Target Maximum Target Maximum STI targets ($) 2,975,000 5,950,000 2,876,260 5,752,520 STI targets (calculated) 175% of base salary 350% of base salary 170% of base salary 340% of base salary STI targets (as disclosed) 175% of base salary ISS peer median 173% of base salary Company peer median 175% of base salary Blank Publication Date: 2 April 2019 Page 19

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Actual Payouts ($) FY 2018 (D. Muilenburg) FY 2017 (D. Muilenburg) Amount % of base salary Amount % of base salary Bonus 0 0 0 0 Non-equity incentive 5,432,350 320 5,752,520 340 Total Bonus + Non-equity 5,432,350 320 5,752,520 340 Blank1 Performance Provisions STI performance Metric Form Weight* Threshold Target Maximum Actual metrics/goals Core EPS Absolute ND ND $14.00 ND $15.51 Free cash Absolute ND ND $12.8 billion ND $13.6 billion flow Individual Absolute ND ND ND ND ND performance Revenue Absolute ND ND $97.0 billion ND $100.8 billion

Blank6

B*FCF, Core EPS and Revenue account for 50%, 25% and 25%, respectively, of the company performance score, which is combined with the individual

performance score to determine final awards.

Blank space Other Short-Term Incentive Factors Performance results adjusted? Core EPS excludes impact of unallocated pension and postretirement benefit expense. In addition, the compensation committee adjusted core EPS upward to exclude or partially exclude the impact of strategic investments in the MQ- 25 and T-X programs and a litigation outcome, and adjusted core EPS downward to exclude the financial impact of lower-than-planned tax rates. Discretionary component? Yes, award determination includes an "individual performance" score determined by the compensation committee. Discretionary bonus?* No CEO's last FY award ($) 5,432,350 (320% of base salary) CEO's last FY award target 175% of base salary Future performance metrics Not disclosed *Based on the Bonus column in the SCT; per SEC rules, amounts disclosed in this column were not based on pre-set goals.

Blank Long-Term Incentives CEO's last FY LTI target (%) 750 of base salary NEOs' last FY award type(s) Performance-based cash or stock award, Performance-based stock, Time- based stock Last FY performance Metric Threshold Target Maximum metrics/goals (cash and equity) 3-yr TSR vs. peer 20th percentile ND 91st percentile and group plus Airbus above 3-yr free cash flow ND ND ND 3-yr core EPS ND ND ND 3-yr revenue ND ND ND *Includes S&P 500 is FALSE

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Long-Term Cash Performance Awards

CEO Cash Award FY 2018 FY 2017 Opportunities Threshold Target Maximum Threshold Target Maximum Long-term cash ($) 0 7,331,300 14,662,600 0 5,775,000 11,550,000 LTI cash paid in last fiscal year ($) 7,644,000 for performance period FY 2016 – 2018

Long-Term Equity Grants

CEO Equity Awards FY 2018 FY 2017 Shares (#) % shares* Value ($)* % value Shares (#) % shares* Value($)* % value Time-based shares 10,150 52 3,689,322 52 16,157 52 2,899,051 52 Time-based options 0 0 0 0 0 0 0 0 Performance shares 9,392 48 3,413,804 48 15,184 48 2,724,465 48 Performance options 0 0 0 0 0 0 0 0 Total equity 19,542 7,103,126 31,341 5,623,516 Time-based equity vesting RSUs: Cliff vest after 3 years Perf. measurement period 3 years (FY2018-20) CEO equity pay mix (by value)* Performance-conditioned: 48.1%; Time-based: 51.9% *Performance shares, if any, are counted and valued at target.

| Other Long-Term Incentive Factors Performance results adjusted? Core EPS excludes impact of unallocated pension and postretirement benefit expense Discretionary component? No

Executive Summary

Evaluation Component Level of Concern Key Reason Non-Performance-Based Pay Elements Medium Significant Perks Peer Group Benchmarking Low Severance/CIC Arrangements Low Comp Committee Communication/Responsiveness Low Pay for Performance Evaluation Low ISS Recommendation: FOR Analysis OVERVIEW Boeing's total shareholder returns strongly outperformed those of its GICS peers, as well as the S&P 500 Index, over one-, three- and five-year periods through Dec. 31, 2018. Operational and financial performance were strong in 2018 as well, with growth in revenue, net income, EBITDA and operating cash flow; and record commercial aircraft deliveries. CEO pay increased by nearly 27 percent year-over-year; or by 38 percent when subtracting the change in pension value from 2017 pay. The increase was primarily driven by larger equity and performance cash awards; with the latter reflecting strong economic profit performance over the 2016-18 cycle.

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ANNUAL COMPENSATION As in 2017, annual incentive awards for 2018 were based on a corporate payout factor and an individual performance factor. The corporate payout factor was again based on free cash flow, core EPS and revenue, weighted at 50 percent, 25 percent and 25 percent, respectively. Targets for all three metrics were set above targets and actual performance for 2017. The CEO's annual incentive target was increased from 170 percent to 175 percent of base salary. However, the actual payout declined from 340 percent of salary to 320 percent, as the company performance score dropped from 187 percent in 2017 to 166 percent in 2018. Individual performance scores for the NEOs ranged from 95 percent to 110 percent, with the CEO receiving a score above 100 percent; but the exact scores for each NEO are not disclosed. LONG-TERM COMPENSATION The CEO was granted performance awards (paid in cash, stock, or a combination thereof), performance-based RSUs, and time-based RSUs in 2018. The total target value was 750 percent of salary, up from 700 percent in the prior year and 650 percent the year before that. Performance awards, which represent 50 percent of the total at target, will vest based on three-year revenue, core EPS and free cash flow; performance-based RSUs (25 percent of the long-term incentive award) will vest based on three-year relative TSR; and time-based RSUs (25 percent of the award) will cliff vest after three years. Shareholders generally prefer to see different metrics used in a company's short- and long-term incentive programs, to prevent a situation where executives receive multiple payouts for achieving a single set of results, although this concern is mitigated by the use of different measurement periods for the two types of awards. The company states that "because of the long product cycles in our business, the Compensation Committee believes that the one-year and three-year versions of these metrics create differentiated yet complementary incentives for our employees." Performance awards granted under the 2016-2018 program (based on economic profit rather than the current metrics) were earned at 147 percent of target, up from 109 percent in the previous cycle, and were paid in cash. Performance-based RSUs granted under the 2016-2018 program earned a payout of 200 percent of target and paid at the maximum 400 percent of grant date target value. Boeing's relative TSR rank for the PRSUs was first out of 22 companies, as in the previous cycle. Other Notable Factors Large personal use of corporate aircraft perquisite. The company provided a large personal use of corporate aircraft perquisite to the CEO. The value of this perquisite, which in 2018 was provided by only 36 percent of companies in the S&P 500 Index, significantly exceeded the index median. Conclusion Pay and performance were reasonably aligned in 2018, and support for this resolution is warranted.

Item 3. Ratify Deloitte & Touche LLP as Auditors FOR

VOTE RECOMMENDATION A vote FOR this proposal to ratify the auditor is warranted. BACKGROUND INFORMATION Policies: Auditor Ratification Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count against) Discussion AUDIT FIRM INFORMATION The board recommends that Deloitte & Touche LLP be reappointed as the company's independent audit firm.

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Audit firm name Deloitte & Touche LLP

Audit firm since (as disclosed) 1934

Audit opinion for the last fiscal year Unqualified

Term to serve if reappointed 1 year

FEES PAID DURING THE LAST FISCAL YEAR

Audit firm name Deloitte & Touche LLP

Fees currency USD

Total fees paid to the audit firm 30,600,000

Audit fees 30,300,000

Audit-related fees 100,000

Total transaction-related fees 0

Total tax fees 100,000

Other fees 100,000

Total non-audit fees* 200,000

Total non-audit fees as a percentage of total fees 0.65%

*Total non-audit fees include other fees, tax advice fees, and certain transaction-related fees. Non-audit fees will also include any tax-related fees not identified as tax compliance or tax preparation. The auditor's report contained in the annual report is unqualified, meaning that in the opinion of the auditor, the company's financial statements are fairly presented in accordance with generally accepted accounting principles. Analysis This request to ratify the auditor does not raise any exceptional issues, as the auditor is independent, non-audit fees are reasonable relative to total fees, and there is no reason to believe the auditor has rendered an inaccurate opinion or engaged in poor accounting practices.

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Item 4. Report on Lobbying Payments and Policy FOR

VOTE RECOMMENDATION A vote FOR this proposal is warranted, as additional disclosure of the company's lobbying-related policies and oversight mechanisms, along with its trade association memberships and payments, would help shareholders better assess the risks and benefits associated with the company's participation in the public policy process.

Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count against; broker non-votes have no effect). Discussion PROPOSAL An undisclosed shareholder has submitted a precatory proposal requesting a report on the company's lobbying activities that discloses its lobbying-related oversight, policies, and expenditures. The resolution reads: "Resolved, the shareholders of Boeing request the preparation of a report, updated annually, disclosing:

Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. 1.

Payments by Boeing used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the 2. amount of the payment and the recipient.

Boeing’s membership in and payments to any tax-exempt organization that writes and endorses model legislation. 3.

Description of management’s and the Board’s decision making process and oversight for making payments described above. 4. For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Boeing is a member. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Boeing’s website." PROPONENT'S STATEMENT In its supporting statement, the proponent advocates for transparency and accountability in the use of corporate funds used to influence legislation or regulation. The proponent states that Boeing spent $137.675 million dollars from 2010 to 2017 on federal lobbying, and that this amount does not include lobbying expenditures to influence state legislation. The proponent also says that the company serves on the board of the National Association of Manufacturers and contends that this association has spent $79,550,014 on lobbying from 2010 to 2017. The proponent asserts that the company does not disclose its memberships in, or payments to, trade associations, or the amounts used for lobbying. Further, the proponent says that while Boeing restricts trade associations from using its payments for political contributions, it does not have the same prohibition against lobbying. The proponent argues that this leaves a disclosure gap, as trade associations usually spend far more on lobbying than on political contributions. Lastly, the proponent says it is concerned that Boeing's lack of disclosure related to its lobbying activities presents reputational risks.

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BOARD'S STATEMENT In its opposing statement, the board states that the company's current policies, procedures, and level of disclosure sufficiently address the proponent's request, and therefore the proposal is unnecessary. Boeing reports that it "regularly engages in policy debates at the federal, state and local levels." The board says that such activities "comply with applicable laws and regulations and Boeing’s high standards of ethical conduct." The company states that it has instituted full transparency and extensive oversight of company political expenditures and has implemented additional policies and procedures with respect to lobbying, including expenditures to trade associations. The board states that the company files Lobbying Disclosure Act (LDA) reports with Congress, and similar reports at the state level where required, and prohibits trade associations and other third-party organizations from using its funds for any "election-related political expenditure." Boeing states that it participates in trade associations for a variety of reasons, including "technical, business, and professional" reasons, and that sometimes these organizations also promote Boeing's public policy interests. The board recognizes that the views expressed by these associations do not always align with those of the company but states that it would be "misleading to suggest that those associations’ lobbying activities were directed by Boeing, or that Boeing’s dues were paid either partially or entirely to fund lobbying." Boeing contends that additional disclosure could also place the company at a competitive disadvantage. The company also notes that it was listed as a "trendsetter" company in the 2018 CPA-Zicklin Index of Corporate Political Accountability and Disclosure. BACKGROUND AND RECENT SHAREHOLDER ACTIVISM For more information on lobbying, see ISS' Environmental and Social Background Report. For an update on the most recent shareholder activism around this issue, refer to ISS' 2018 Proxy Season Review - US Environmental and Social Issues Report (requires login to ISS Link). This is the sixth year in a row that Boeing has received this proposal. The proposal averaged 22.5 percent shareholder support in the five previous years. RECENT CONTROVERSY In the wake of two recent deadly crashes involving Boeing 737 Max aircraft, including the Ethiopian Airlines crash that killed 157 people, and a Lion Air crash that killed 189 people, the U.S. Congress is investigating the Federal Aviation Administration’s (FAA) oversight of Boeing, particularly after the FAA did not ground the company's planes right after the second incident, and only did so after regulators in Europe, China, Australia and elsewhere acted first. Boeing has been accused of having a cozy relationship with the federal government and federal regulators. Boeing was among the top companies spending money on lobbying last year to influence U.S. government decision-making. The Washington Post reports that the company spent $15.1 million lobbying the federal government. Congress will also be investigating the FAA’s approval process for Boeing’s 737 Max 8 aircraft, amid reports agency managers pushed FAA safety engineers to delegate safety evaluations to Boeing and to speedily approve federal analysis of a new flight control system.

Analysis BOEING'S LOBBYING DISCLOSURE Public Policy Positions Boeing's Government Operations web page reports that the company works with government officials, public policy groups, think tanks, trade associations, and international organizations "to protect and advance the company's interests, competitiveness, and reputation; win support for Boeing programs; and shape public policy issues that impact the company." The company also says that its efforts focus on making sure that the U.S. regulatory and political climate is "conducive to global aerospace and defense leadership and supports long-term American manufacturing competitiveness and innovation." Boeing's government operations web page also provides information about the company's advocacy priorities, which include: the U.S. Export-Import Bank, "trade policies that level the playing field for American companies," Federal Aviation Administration (FAA) certification reform, space exploration, greater fuel efficiency and lower emissions, and illegal subsidies to Airbus from European Union countries. Political Expenditures The company's Government Operations website has a Political Expenditures section which states that Boeing uses corporate resources in order to support the company's perspectives on important public policy issues, "including expenditures for external entities who advocate on Boeing's behalf." Publication Date: 2 April 2019 Page 25

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Boeing says that any such advocacy conducted by the company requires the prior approval of the company's senior Vice President of Government Operations and is overseen and managed by the company's Government Operations organization. Boeing states that it files lobbying disclosure reports with the U.S. House and Senate, in addition to providing the links to the LDA Reports website. The company says that it files similar reports, as required, on the state level. Lastly, Boeing says that the company's Senior Vice President of Government Operations reports regularly to Boeing's board of directors on the company's lobbying and other advocacy activities. Trade Associations Boeing states on its Political Expenditures web page that it is company policy to prohibit external organizations, such as trade associations, from using its funds for any election-related political expenditures. The company states, "Boeing has requested and received written assurance of adherence to that policy by its largest trade associations." The company says that it regularly reviews its external affiliations to ensure alignment with Boeing's business interests and business strategy. Boeing states that "any continued support for such organizations must be approved by the Senior Vice President, Government Operations, on at least an annual basis." The company currently does not have any restrictions on trade associations' using money for lobbying. CONCLUSION Boeing articulates a rationale for participating in the political process, discusses the issues of importance to the company, and has established a Government Operations division to manage the company's political and lobbying activities. Further, it notes that the Senior Vice President of Government Operations "reports regularly" to the board on the company's lobbying activities. Boeing also prohibits payments to trade associations from being used as political contributions, although it does not have the same prohibition against payments being used for lobbying. However, the company does not disclose any other policies or procedures it may have implemented to manage its lobbying activities or trade association memberships, nor does it disclose lobbying expenditures or a list of its trade association memberships and payments. In addition, the company is currently involved in a significant controversy over the FAA's approval process for its 737 Max 8 aircraft in the wake of two deadly airplane crashes. As a result, the company's relationship with the FAA and its lobbying efforts will come under closer scrutiny. There may be instances where lobbying for changes in legislation or regulation provides the company with short-term benefits, but there is also the possibility that this undisclosed activity may expose the company to long-term legal and reputational risks. In this environment, the type of disclosure suggested by the proposal would allow shareholders to better assess Boeing's management of its comprehensive political activities. This resolution therefore warrants shareholder support.

Item 5. Adjust Executive Compensation Metrics for Share Buybacks AGAINST

VOTE RECOMMENDATION A vote AGAINST this proposal is warranted, as the timing of the company's share buybacks and their impacts on metric results do not raise significant concerns at this time.

Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count as votes against; broker non-votes have no effect) Discussion PROPOSAL A shareholder has submitted the following non-binding proposal: "Resolved: Shareholders of The Boeing Company (the “Company”) urge the Compensation Committee of the Board of Directors to adopt a policy that financial performance metrics shall be adjusted, to the extent practicable, to exclude the impact of share repurchases when determining the amount or vesting of any senior executive incentive compensation grant or award. The policy should be implemented in a way that does not violate existing contractual obligations or the terms of any plan."

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PROPONENT'S STATEMENT The proponent states that stock buybacks affect many of the financial ratios used as performance metrics for incentive pay of senior executives. The proponent is concerned that stock buybacks can deprive companies of the capital necessary to create long-term growth. The proponent believes that senior executives should not receive larger pay packages simply for reducing the number of shares outstanding. Instead, pay should be aligned with operational results, the proponent argues. The proponent also highlight that stock buybacks reached record levels in 2018, and according to data from S&P Dow Jones Indices, S&P 500 companies spent a combined total of $519.4 billion on stock repurchases and $419.77 billion on dividends in 2017. The proponent also notes that performance goals for senior executives include core earnings per share, a financial metric that can be inflated by stock buybacks. The proponent also mentions that Boeing announced an $18 billion share buyback at the end of 2017, after spending over $9.2 billion buying back shares that year. In addition, only $3.2 billion was spent on research and development and $1.7 billion on capital expenditures in 2017. BOARD'S STATEMENT The board argues that its strategy has long reflected a commitment to align the interests of the company's executives with the interests of shareholders. The board notes that core EPS drives 25 percent of STI payouts and 25 percent of the performance award portion of the LTI program, with core EPS driving less than 15 percent of NEO total pay. In addition, the board states that if this proposal had been adopted when the board introduced core EPS as a performance metric, NEO pay would have been approximately 1 percent higher in 2017 and unchanged in 2018 as compared to actual payouts. The board also mentions that they have a long- standing commitment to return cash to shareholders through a combination of dividends and repurchases of common stock. The board has the discretion to adjust performance levels, and in 2018 they adjusted core EPS for several factors, including the impact of lower than planned tax rates, the net impact of which was to reduce executives’ pay. Finally, the board states that this proposal would eliminate their ability to use discretion with respect to one category of potential adjustments and would limit their ability to ensure alignment between executive pay and the company's core operating performance. Analysis Opinions vary on whether the impact of share buybacks should be excluded from the results of metrics utilized in executive incentive pay programs. Some stakeholders believe that executives should not be incented or rewarded for the positive effect that share buybacks have on per-share or financial return ratio metrics, while others contend that such incentives are appropriate when buybacks are in shareholders' best interests. Company approaches also vary – many firms do not make adjustments for buybacks while others, including some prominent S&P 500 companies, adjust for this impact under the reasoning that it does not reflect core business performance. Also, the opportunity for metric manipulation exists. For example, shareholders may question the appropriateness of a share buyback made shortly before the end of an incentive performance period if the impact of such repurchase resulted in incentive payouts that would not have otherwise have been earned. ISS recognizes that the compensation committee and board are in the best position to determine the most appropriate incentive metrics for the company, and any related adjustments, absent indication of problematic issues. In assessing shareholder proposals that seek to exclude the impact of share buybacks on executive pay metrics, ISS utilizes a case-by-case approach, considering factors such as the frequency and timing of the company's share buybacks, the effect of recent buybacks on performance metrics utilized in executive incentive programs, and the types of one-time adjustments generally made to those metrics. In December 2018, the board announced a new repurchase plan for up to $20 billion of common stock, with no end date. During 2018 and 2017 the company repurchased 26.1 million and 46.1 million shares totaling $9.0 billion and $9.2 billion through its repurchase program. Only a small portion of the buybacks were in Q4 of FY18; as such the timing of the buybacks does not suggest metric manipulation. While the buybacks have been frequent and large in magnitude, their impact on the incentive program metrics does not appear to be substantial. Although EPS was consistently utilized in the annual and long-term programs, its weighting within the company performance component has been only 25 percent (or, as the company notes, only 15 percent of the total pay opportunity). As a result, buyback activity appears to have had an insignificant impact on NEO payouts relating to incentive plan per- share metrics. CONCLUSION While the dollar amount of buybacks was high in FY2017 and FY2018, the timing of the buybacks and their impacts on metric results and payouts does not raise significant concerns at this time. In addition, EPS is weighted at only one-fourth of the incentive Publication Date: 2 April 2019 Page 27

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084 programs, and overall incentive awards do not appear to have been appreciably affected by the change in outstanding shares caused by the company's repurchases. In the absence of specific concerns identified with respect to buyback-related metric adjustments, support for this proposal is not warranted.

Item 6. Require Independent Board Chairman FOR

VOTE RECOMMENDATION A vote FOR this proposal is considered warranted, as concerns raised within the last year about the company's risk oversight and actions related to the development, certification and marketing of the 737 Max aircraft are serious enough to suggest that shareholders would benefit from the most robust form of independent board oversight, in the form of an independent board chair. BACKGROUND INFORMATION Policies: Independent Chair (Separate Chair/CEO)

Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count as votes against; broker non-votes have no effect) Discussion PROPOSAL A shareholder has submitted a precatory (non-binding) resolution to request that the company adopt a policy that the chair of the board be an independent director. The resolution reads: "Shareholders request our Board of Directors to adopt as a policy, and amend our governing documents as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. The Board would have the discretion to phase in this policy for the next Chief Executive Officer transition, implemented so it does not violate any existing agreement. If the Board determines that a Chairman, who was independent when selected is no longer independent, the Board shall select a new Chairman who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chairman. This proposal requests that all the necessary steps be taken to accomplish the above." PROPONENT'S STATEMENT The proponent states that "the roles of chairman and CEO are fundamentally different and should be held by two directors, a CEO and a chairman who is completely independent of the CEO and our company." The proponent argues that "an independent chairman is best positioned to build up the strategic planning capabilities of our directors while our CEO addresses the challenging day-to-day issues facing the company." Examples of such challenges cited by the proponent include the Lion Air 737 Max accident "potentially due in part to faulty anti-stall protections"; losses on the KC-46 Air Force tanker aircraft; and fierce competition for various future defense programs on which Boeing is bidding. BOARD'S STATEMENT The board responds that it "should be able to select its leadership structure based on what will best serve shareholders' interests under the circumstances, not pursuant to an inflexible policy established in advance." The board notes that at various times in the past the role of chairman has been performed by the sitting CEO, a former CEO, and an independent director. The board states that its leadership structure "is reviewed on at least an annual basis by the independent directors in executive session based on all relevant factors."

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

The board goes on to state that it "is not aware of clear evidence demonstrating that splitting the CEO and Chairman roles is good for all companies in all circumstances" and to note that "most shareholders with whom we discussed this topic echoed this view." The board believes that "Boeing's strong independent Lead Director role, combined with other governance features, already provides the management oversight and independent leadership requested by the proposal." In this connection, the board points out that all current directors other than the Chairman/CEO are independent; that the independent directors meet without management present following every stated board meeting; and that each member of the board's key committees is an independent director. The board notes as well that the company "generated record revenues, operating earnings, margins, earnings per share, cash flow and commercial aircraft deliveries" in 2018, and that its total shareholder returns for 2014-18 and 2016-18 led the Dow Jones Industrial Average. The board "believes that this recent performance further validates the decision to maintain the board's current leadership structure." Analysis Although ISS recognizes that many companies maintain the combined posts of chairman and CEO and perform well with this arrangement, many shareholders believe that it is preferable to separate these positions. The board is responsible for overseeing management and instilling accountability, and conflicts of interest may arise when one person holds both the chairman and CEO positions, thereby leading both the management team and the board which oversees it. Effective board oversight may be enhanced by independent leadership. ISS will generally recommend in favor of shareholder proposals requiring that the chairman's position be filled by an independent director, taking into consideration the following:

• The scope of the proposal; • The company's current board leadership structure; • The company's governance structure and practices; • Company performance; and • Any other relevant factors that may be applicable.

SCOPE OF THE PROPOSAL The proposal is non-binding, and states that the board would have the discretion to phase in the policy for the next CEO transition and to implement it so as to not violate any existing agreement. Thus, the proposal is not overly prescriptive and does not seek an immediate change to the board leadership structure. BOARD AND GOVERNANCE FEATURES Chairman classification Executive Director Separate chair/CEO No Independent lead director Yes Lead Director elected by and from Independent Directors Yes Board Independence 92%

100% Independent Key Committees Yes Disclosed Governance Guidelines Yes Average Board Tenure 7 years CEO Tenure 4 years Compensation Concerns No

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Problematic Governance Practices No

BOARD LEADERSHIP STRUCTURE Dennis Muilenburg has served as CEO since 2015, and added the role of chairman in 2016. Former Chairman and CEO James McNerney continued to serve as chairman for eight months following his retirement as CEO in 2015. An independent lead director is chosen on an annual basis by the independent directors. David Calhoun has served as lead director since 2018. The duties of the lead director at Boeing include presiding at board meetings at which the chairman is not present, having the authority to call meetings of the independent directors, serving as a liaison between the chairman and the independent directors, approving board meeting schedules and agendas and the type of information sent to the board, and being available for consultation and direct communication with shareholders upon request. In addition, current lead director Calhoun "speaks with the CEO before and after each stated meeting of the board to review presentation materials, address matters discussed during executive sessions of the board's independent directors, and/or discuss important strategic matters; ensures that the board's governance policies are responsive to shareholder concerns, including with respect to matters such as proxy access, succession planning, and limits on outside board memberships for directors; and meets regularly with members of senior management other than the CEO." GOVERNANCE STRUCTURE AND PRACTICES There are no significant concerns at this time with board or committee independence or shareholder rights. However, as discussed in Item 1 above, problems with the 737 Max aircraft, including allegations that it was rushed into production and that the company had excessive influence over the FAA certification process, do raise questions about the sufficiency of risk oversight by the board. COMPANY PERFORMANCE TOTAL SHAREHOLDER RETURNS

1 Yr 3 Yr 5 Yr

Company TSR (%) 11.50 34.15 21.82 GICS 2010 TSR (%) -16.69 10.45 3.31 S&P500 TSR (%) -4.38 9.26 8.49 Source: Compustat. As of last day of company FY end month: 12/31/2018

Through the end of 2018, the company has outperformed its four-digit GICS peer group on a one-, three- and five-year basis. The CEO has served in the chair position over the past three years. Notwithstanding a decline in the share price following the Ethiopian Airlines crash on March 10, Boeing shares are still in positive territory year-to-date, and appear to be ahead of peers for this period. CONCLUSION When Boeing last received this proposal in 2018, ISS concluded that the proposal did not warrant support at that time, as the lead director role was robust and there were no concerns at that time regarding board or committee independence, the company's performance, or its governance practices. There have been no significant changes to Boeing's governance practices since last year, and the company has continued to outperform its peers. However, as detailed above, serious concerns have been raised about Boeing's actions (or inactions) related to the development, certification and marketing of the 737 Max, a product which is critical to the company's financial performance. One need not accept at face value all of the allegations made in the media, or by members of the U.S. Congress, to acknowledge that the company faces serious challenges in regaining the confidence of regulators, airlines, pilots and passengers worldwide. Any missteps in the process of remediating the issues and open questions that have led to the grounding of the 737 Max, or any repeat of the problems in future aircraft programs, could have a devastating impact on the company's business prospects, its brand and its reputation, for years. These circumstances suggest that shareholders would benefit from the most robust form of independent board oversight, in the form of an independent board chair.

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Item 7. Amend Proxy Access Right FOR

VOTE RECOMMENDATION A vote FOR this proposal is warranted as the proposed elimination of the 20-shareholder aggregation limit would improve the company's existing proxy access right for shareholders. Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count as votes against; broker non-votes have no effect) Discussion PROPOSAL A shareholder has submitted a non-binding proposal to amend Boeing's existing proxy access bylaw provisions to eliminate the aggregation limit on the number of shareholders who can combine their holdings to reach the 3 percent ownership threshold to make use of the bylaw. The proposal reads as follows:

"Resolved: Stockholders ask the board of directors to amend its proxy access bylaw provisions and any associated documents, to include the following change for the purpose of decreasing the average amount of Company common stock the average member of a nominating group would be required to hold for 3-years to meet the ownership requirement to form a nominating group: No limitation shall be placed on the number of stockholders that can aggregate their shares to achieve the 3% of common stock required to nominate directors under our Company’s proxy access provisions." PROPONENT'S STATEMENT The proponent believes that "a competitive election is good for everyone," and that this proposal "can help ensure that our management will nominate directors with outstanding qualifications in order to avoid giving shareholders a reason to exercise their right to use proxy access." The proponent goes on to note that according to the Council of Institutional Investors, "even if the 20 largest public pension funds were able to aggregate their shares, they would not meet the current 3 percent criteria for a continuous 3-years at most companies." The proponent believes that the current situation means that proxy access is effectively available "for only the largest shareholders who are the least unlikely [sic] shareholders to make use of it." Finally, the proponent argues that "a more practical proxy access right would give our directors more of an incentive to oversee the management of three new military contracts that were won with low bids that come with added risk." BOARD'S STATEMENT The board believes the current terms of Boeing's proxy access bylaw, adopted following extensive consultation with shareholders, "appropriately balance the benefits and risks to shareholders." By contrast, the board believes that "allowing an unlimited number of shareholders to aggregate their shares for proxy access purposes would expose Boeing to costly administrative burdens and enable small shareholders with narrow, special interests to exercise disproportionate influence over the director nomination process." Finally, the board argues that Boeing's existing governance practices – including regular shareholder engagement, annual director elections, a majority vote standard for uncontested elections, shareholders' right to call a special meeting and the existing proxy access provisions – already "preserve the board's accountability without the expense and risk associated with eliminating the proxy access aggregation limit." BACKGROUND ON PROXY ACCESS Although a 2010 SEC rule requiring proxy access at public companies was ultimately struck down by the D.C. Circuit Court, the SEC lifted its stay on access proposals under Rule 14a-8, thereby allowing shareholders to submit proposals for proxy access procedures in company proxy materials. Recent investor focus on board composition resulted in strong support for proxy access shareholder proposals. Between 2015 and 2017, a total of 206 such proposals reached votes at meetings, and average support exceeded 53 percent of votes cast. By the end of 2018, more than two-thirds of S&P 500 companies had adopted some form of proxy access, either in response to a shareholder proposal or at the board’s initiative.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

In line with institutional investor feedback, ISS generally recommends a vote for management and shareholder proposals with the following provisions: - Ownership threshold: maximum requirement not more than three percent (3%) of the voting power; - Ownership duration: maximum requirement not longer than three (3) years of continuous ownership for each member of the nominating group; - Aggregation: minimal or no limits on the number of shareholders permitted to form a nominating group; - Cap: cap on nominees of generally twenty-five percent (25%) of the board. ISS will consider the reasonableness of any other restrictions on the right of proxy access, but will generally recommend a vote against proposals that are more restrictive than these guidelines. Analysis The company's bylaws currently permit a shareholder, or a group of up to 20 shareholders, owning at least 3 percent of outstanding shares of common stock continuously for at least three years, to nominate and include in the annual proxy materials director nominees constituting the greater of two directors or 20 percent of the board. This proposal would eliminate the 20-shareholder limit on the number of investors who might aggregate their shares to form a nominating group. Based on Boeing's March 26, 2019 market capitalization of approximately $209 billion, a 3 percent ownership stake equates to an investment of nearly $6.3 billion. Based on the equity ownership profile below, just five investors hold a stake of 3 percent or more and could use the proxy access right unilaterally (assuming they meet the duration requirement). While up to 20 shareholders can aggregate their shares to form a nominating party, the company's market cap makes it difficult to reach the 3 percent threshold, even for large, long-term investors. Members of a full 20-shareholder nominating group would have to own an average of $313 million worth of BA shares to utilize proxy access. Boeing expresses concern that eliminating the aggregation limit would permit small, special interest shareholders to take part in a nominating group and thus have a disproportionate influence over the director nomination process. However, it is not likely that a small shareholder whose interests are not aligned with those of the broader shareholder base would be able to convince the holders of $6 billion worth of shares to unite in support of a director candidate chosen by the small shareholder. It is still less likely that an unqualified or fringe candidate would be able to win the support necessary to be elected to the board. Conclusion Although Boeing currently has a proxy access bylaw, that bylaw contains an aggregation limit that may not be reasonable for a company of this size. The proposed amendment to the access right would eliminate the 20-shareholder aggregation limit which could restrict even large, long-term investors from aggregating their shares to use the right. Given that the proposed amendment would enhance the company's existing proxy access right for shareholders while maintaining safeguards on the nomination process, support for this proposal is warranted.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

Item 8. Adopt Share Retention Policy For Senior Executives FOR

VOTE RECOMMENDATION A vote FOR this proposal is warranted as the more rigorous guidelines recommended by the proponent may better address concerns about creating a strong link between the interests of top executives and long-term shareholder value. BACKGROUND INFORMATION Policies: Hold Equity Past Retirement or for a Significant Period of Time

Vote Requirement: Majority of shares present in person or by proxy and entitled to vote (abstentions count as votes against; broker non-votes have no effect)

Discussion PROPOSAL A shareholder has proposed the adoption of the following resolution: Resolved: Shareholders of The Boeing Company (“Company”) urge the Compensation Committee of the Board of Directors (“Committee”) to adopt a policy requiring that senior executives retain a significant percentage of shares acquired through equity compensation programs until reaching normal retirement age. For the purpose of this policy, normal retirement age shall be defined by the Company’s qualified retirement plan that has the largest number of plan participants. Shareholders recommend the Committee adopt a share retention percentage requirement of at least 25 percent of net after-tax shares awarded. The policy should prohibit hedging transactions for shares subject to this policy which are not sales but reduce the risk of loss to the executive. This policy shall supplement any other share ownership requirements that have been established for senior executives, and should be implemented so as not to violate the Company’s existing contractual obligations or the terms of any compensation or benefit plan currently in effect. SHAREHOLDER'S SUPPORTING STATEMENT The proponent notes that equity-based compensation is an important component of senior executive compensation at Boeing. While the proponent encourages the use of equity-based compensation, the proponent expresses concern that "senior executives are generally free to sell shares received from equity compensation plans," and believes that requiring senior executives to hold a significant percentage of such shares until reaching retirement age, regardless of when the executives actually retire, "will better align the interests of executives with the interests of shareholders and the company." The proponent does not believe that Boeing's existing share ownership guidelines go far enough to ensure that compensation plans "continue to build stock ownership by senior executives over the long-term," and points out that the value of CEO Muilenburg's equity awards in 2016 and 2017 was great enough that he could satisfy the ownership requirement (six times base salary) in just two years. The proponent concludes by arguing that "without stronger retention requirements, the CEO is generally free to sell any additional equity awards granted," and "requiring executives to retain a portion of all annual stock awards provides incentives to avoid short-term thinking and to promote long-term shareholder value." BOARD'S STATEMENT The board counters that it already "require[s] senior executives to own significant amounts of Boeing stock throughout the term of their employment." These ownership requirements, which are based on pay grade, range from one times base salary for certain vice presidents to six times base salary for the CEO. The board notes that the compensation committee "annually reviews officers' ownership relative to these requirements, and may adjust the cash/equity mix of an executive's compensation if needed." However, the board points out that many executives own stock far in excess of the requirements – for example, CEO Muilenburg owns more than five times as many shares as are required. The board notes as well that executive officers must hold all newly-vested stock until their minimum ownership requirements have been satisfied, and that executives are prohibited from reducing their economic exposure to Boeing through hedging transactions. The board argues further that the company's restricted stock units "reward long- term value creation because the units do not vest until the third anniversary of the grant date and increase in value only to the

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084 extent the price of Boeing stock increases." The performance-based restricted stock units, meanwhile, have a three-year performance period, and "pay out only upon achievement of the company's long-term financial performance goals." For these reasons, the board believes that "post-termination ownership requirements [are] unnecessary." Finally, the board argues that the compensation program is intended to drive strong performance by current executives, and that "imposing unnecessary restrictions on former executives . . . would make Boeing's compensation packages less competitive, but with no associated benefit to the company." Analysis ISS agrees that significant stock ownership by company management aligns managers' interests with those of shareholders. However, when evaluating stock retention/holding period proposals, ISS takes into account the following factors: • Rigorous ownership guidelines (at least 10x base salary); • Holding period requirements coupled with significant long-term ownership requirements; • A meaningful retention ratio; • Actual executive stock ownership compared to the ownership/holding requirements; • Any post-termination holding requirement policies or policies aimed at mitigating risk taking; and • Pay practices (past and present) that may promote short-term versus long-term focus. In this case, the company has stock ownership guidelines of six times base salary for the CEO, four times base salary for executive vice presidents, three times base salary for senior vice presidents, and one or two times base salary for other vice presidents. These must be met within five years after attaining the relevant executive grade. Shares underlying stock options and PBRSUs do not count toward the ownership guidelines, but stock units, deferred stock units, RSUs and shares held through company savings plans, as well as directly-owned shares, do count. Executive officers must hold all newly-vested stock until their minimum ownership requirements have been satisfied, after which no further retention requirements apply. According to the proxy statement, as of Dec. 31, 2018 each NEO exceeded the applicable stock ownership requirement. CONCLUSION While the company maintains stock ownership requirements, these do not qualify as rigorous under ISS policy. Moreover, the retention requirements are only applicable until the ownership guidelines are met. Hence, the more rigorous guidelines recommended by the proponent may better address shareholders' concerns about creating a strong link between the interests of top executives and long-term shareholder value, given that it would further enforce the alignment of executives who would be required to hold a portion of their equity awards until reaching normal retirement age. Although the board emphasizes that Boeing's compensation programs are intended to drive performance by current executives, and believes it is unnecessary to impose holding requirements on former executives who have left the company but not yet reached retirement age, an executive who knows that he or she will be required to hold a portion of equity awards even after leaving the company will have an incentive while in office to avoid taking actions that result in a short-term stock price gain but whose negative impact on the company is only apparent years later. Because the proposed requirement to retain 25 percent of net shares awarded is not considered unduly burdensome, shareholder support for this resolution is warranted.

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084

EQUITY OWNERSHIP PROFILE Type Votes per share Issued Common Stock 1.00 564,479,479

Ownership - Common Stock Number of Shares % of Class The Vanguard Group, Inc. 41,344,098 7.32 Newport Trust Co. 33,492,259 5.93 T. Rowe Price Associates, Inc. 33,495,926 5.93 SSgA Funds Management, Inc. 26,022,586 4.61 BlackRock Fund Advisors 24,382,205 4.32 Capital Research & Management Co. (World Investors) 15,346,112 2.72 Fidelity Management & Research Co. 7,976,946 1.41 Jennison Associates LLC 7,817,279 1.38 Geode Capital Management LLC 6,262,103 1.11 Henderson Global Investors Ltd. 6,187,017 1.10 Northern Trust Investments, Inc. 6,162,143 1.09 Capital Research & Management Co. (International Investors) 5,949,990 1.05 Morgan Stanley Smith Barney LLC (Invt Mgmt) 3,770,122 0.67 TIAA-CREF Investment Management LLC 3,447,188 0.61 JPMorgan Investment Management, Inc. 3,067,382 0.54 American Century Investment Management, Inc. 2,847,474 0.50 Columbia Management Investment Advisers LLC 2,583,549 0.46 Merrill Lynch, Pierce, Fenner & Smith, Inc. (Invt Mgmt) 2,592,021 0.46 Goldman Sachs Asset Management LP 2,487,297 0.44 The Bank of New York Mellon Corp. (Investment Management) 2,452,784 0.43 © 2019 Factset Research Systems, Inc. All Rights Reserved. As of: 31 Dec 2018

Additional Information Meeting Location The Field Museum, 1400 South Lake Shore Drive, Chicago, Illinois

Meeting Time 9:00 CDT

Shareholder Proposal Deadline November 16, 2019

Solicitor Morrow Sodali LLC.

Security IDs 097023105(CUSIP)

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The Boeing Co. (BA) Meeting Date: 29 April 2019 POLICY: United States Meeting ID: 1308084 ISS’ experienced research team provides comprehensive proxy analyses and complete vote recommendations for approximately 40,000 meetings annually in around 117 markets worldwide. With a team of more than 370 research and/or data professionals, fluent in 25 languages, ISS covers every holding within a client’s portfolio in both developed and emerging markets. Our Research Analysts are located in financial centers worldwide, offering local insight and global breadth. Research office locations include Berlin, Brussels, London, Manila, Paris, San Francisco, Sydney, Singapore, Tokyo, Toronto, and Rockville, Maryland. ISS has long been committed to engagement and transparency. For information on the policies applied in this research report, please see our Policy Gateway. Please use the ISS Help Center for questions on research reports, policy, and for requests for engagements.

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