If Bloomberg’s reporters are correct, Boeing’s (NYSE: BA) CEO James McNerney, who is also chairman of the Procter & Gamble (NYSE: PG) board of directors compensation and leadership development committee, has pressed to oust Robert McDonald, the consumer products firm’s chief executive. McNerney’s pressure is outrageous, given his own tenure as Boeing’s head.

Since McNerney joined Boeing, its shares have performed no better than the Dow Jones Industrial Average. As a matter for fact, the stock has dropped 15% over the past five years. Boeing has blundered enough since McNerney became CEO that it is a wonder he has kept his own job.

McNerney objects to the fact that McDonald has dropped earnings estimates three times over the past year. McNerney has conveniently forgotten that Boeing revised its earnings down in early 2009. Boeing also dropped earnings projections in 2003. The multiple delays of the Boeing 787 Dreamliner flagship are the stuff of mismanagement legend. McNerney should have been dismissed long ago, if earnings and executive performance are the primary yardsticks.

One problem that P&G’s board has with the McDonald issue is that its board members erred when they made McNerney one of the primary judges of McDonald’s performance. Because of McNerney’s own performance, the board should have named another of its members to act as head of its compensation and leadership development committee.

McDonald’s tenure as the chief executive of P&G may have been marred by slow sales growth and disappointing profits. The steward of one of the great corporate brands in the world probably should have done better. Ultimately, if P&G has not lived up to its promise, McDonald deserves the blame. And underperformance may cost him his job.

If the board does fire McDonald, it will be a great shame that McNerney is one of the judges.

Douglas A. McIntyre

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