ITEM 4. SHAREHOLDER PROPOSAL ON HEALTH CARE PRINCIPLES
The American Federation of Labor and Congress of Industrial
Organizations, 815 Sixteenth Street, N.W., Washington, D.C. 20006, owner of at least 600 shares of common stock, has advised the Company that it intends to present the following resolution at the Annual Meeting. Approval of this proposal would
require the affirmative vote of a majority of the outstanding shares of Boeing stock present in person or by proxy and entitled to vote at the Annual Meeting.
Shareholder Resolution
RESOLVED: Shareholders of The Boeing Company (the “Company”) urge the Board of Directors (the
“Board”) to adopt principles for health care reform based upon principles reported by the Institute of Medicine:
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1.
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Health care coverage should be universal.
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2.
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Health care coverage should be continuous.
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3.
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Health care coverage should be affordable to individuals and families.
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4.
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The health insurance strategy should be affordable and sustainable for society.
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5.
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Health insurance should enhance health and well being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable.
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Supporting Statement
The
Institute of Medicine, established by Congress as part of the National Academy of Sciences, issued five principles for reforming health insurance coverage in a report,
Insuring America’s Health:
Principles and Recommendations
(2004). We believe principles for health care reform, such as those set forth by the Institute of Medicine, are essential if public confidence in our Company’s commitment to health care coverage is to be maintained.
Access to affordable, comprehensive health care insurance is the most significant social policy issue in America according to polls by NBC News/
The Wall Street
Journal
, the Kaiser Foundation and
The New York Times
/CBS News. In our opinion, health care reform also is a central issue in the presidential campaign of 2008.
Many national organizations have made health care reform a priority. In 2007, representing “a stark departure from past practice,” the American Cancer Society redirected its entire $15 million
advertising budget “to the consequences of inadequate health coverage” in the United States (
The New York Times
, 8/31/07).
John
Castellani, president of the Business Roundtable (representing 160 of the country’s largest companies), has stated that 52 percent of the Business Roundtable’s members say health costs represent their biggest economic challenge. “The
cost of health care has put a tremendous weight on the U.S. economy,” according to Castellani, “The current situation is not sustainable in a global, competitive workplace.” (
BusinessWeek,
July 3, 2007)
The National Coalition on Health Care (whose members include some of the largest publicly-held companies, institutional investors and labor unions) also has created
principles for health insurance reform. According to the National Coalition on Health Care, implementing its principles would save employers presently providing health insurance coverage an estimated $595-$848 billion in the first 10 years of
implementation.
Our Company currently has Other Postretirement Benefit (which includes health care benefits) liability of more than $8 billion, according
to its 10-K. We believe that the 47 million Americans without health insurance results in higher costs to our Company, as well as all other U.S. companies that provide health insurance to their employees. Annual surcharges as high as $1,160 for
the uninsured are added to the total cost of each employee’s health insurance, according to Kenneth Thorpe, a leading health economist at Emory University. Moreover, we feel that increasing health care costs further reduce shareholder value
when it leads companies to shift costs to employees, thereby reducing employee productivity, health and morale.
Board of Directors’ Response
The Board of Directors opposes this proposal because the Board does not believe that the adoption of this proposal’s principles advances a solution
to health care issues or that the Company’s annual meeting is the proper forum for this national policy debate. The Company agrees with the proponent that rising health care costs and health care
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reform are significant social policy issues, and the Company works with a range of stakeholders to address health care reform. However, it is not in the best
interests of the Company or its shareholders to be constrained by adopting the principles of a single organization as called for by this proposal. To do so would limit our effectiveness to work with a range of organizations. Accordingly, we
recommend that shareholders vote against this proposal.
The Company is committed to the health and well-being of its employees, retirees and their
families. The Company knows that employee health has a direct relation to productivity and that providing health insurance enhances its ability to attract and retain employees. At the same time, the Company is keenly aware of the cost burden of
providing quality health care to its employees and retirees and has adopted as part of its competitive total pay and benefits package the goal of reducing employee and retiree health care cost trends, while maintaining quality and encouraging
consumerism.
The Company has undertaken various initiatives on several fronts to address the issues of rising health care costs while ensuring quality
health care for its workforce. Our strategy is to promote employee well-being by providing employees with the tools to manage their health care and live a healthy lifestyle, as well as to drive positive change within the health care marketplace and
public policy in order to improve health care quality and efficiency. Following are examples of how the Company is working to improve employee health care:
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Offers a premier wellness program to employees, including on-site health screenings, health risk assessment incentives, on-site fitness centers, lifestyle coaching,
disease management and decision-making tools to help employees better manage their overall health.
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Works with the unions and our health care plans to offer quality health care at reasonable costs.
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Advocates health care reform at both the national level and in our largest local markets by working together with government and multi-stakeholder organizations to
influence health care quality, safety and efficiency. Some of the organizations with which the Company works include: Business Roundtable, The Leapfrog Group, The American Health Information Community, U.S. Department of Health & Human
Services, the Quality Alliance Steering Committee and the Puget Sound Health Alliance.
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Initiates market-based health care change through use of purchasing leverage and participation in alliances and coalitions with organizations that share the
Company’s view that health care reform is needed.
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Takes the lead to influence change through pilot programs focused on promoting health care innovation and best practices.
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Over the long term, we believe these initiatives will help our business and employees by enhancing employee well-being and productivity, as well as controlling health
care benefit costs for employees and the Company.
The Company is committed to working with employees and at the national level to bring about the type of
change in the health care system that will make a difference for our employees. The Company has addressed and will continue to address the issue of affordable, quality health care for its employees, retirees and their families. We believe that a
strong, effective, high-quality and well-managed health care system is vital to our country’s and the Company’s well-being, prosperity and strength, and we will continue to be engaged in this issue on several fronts. Without such action,
the Company may not be able to attract and retain the best talent and may lose market share.
In addition, much of the debate on this significant public
policy issue will take place in various public forums at the national, regional and business levels. Since the Company is involved in discussions with many groups, adopting any one organization’s principles may limit our ability to work
effectively with other organizations to effect meaningful health care changes. In summary, we do not believe that national health care reform is an issue that should be addressed through the Company’s annual meeting process. Accordingly, we
believe that this proposal is an inappropriate topic for the annual meeting, will not provide health care solutions for the Company or its employees, and will not benefit the Company or its shareholders.
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