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Stonecipher's Scarlet Letter

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Gone are the good old days when it took vodka-peeing ice sculptures, fake subsidiaries and government payoffs to get canned as a CEO. Now, all a top executive has to do is play a bit of tonsil hockey with an underling to be fired, as Boeing CEO Harry Stonecipher discovered today.

Boeing's board forced Stonecipher to tender his resignation, following an investigation into "a personal relationship" between the CEO and a female executive. Ironically, Stonecipher came out of retirement in 2003 to clean up Boeing's image. The company had been under pressure to distance itself from scandals revolving around a controversial bid for US Air Force refueling tankers, and Stonecipher was seen as the right man to do the distancing. CFO James Bell has been tapped as interim president and CEO.

“The resignation was in no way related to the company’s operational performance or financial condition, both of which remain strong," said Boeing Chairman Lew Platt. "However, the CEO must set the standard for unimpeachable professional and personal behavior, and the Board determined that this was the right and necessary decision under the circumstances."

Platt received word of Stonecipher's possible misconduct 10 days ago in the form of an anonymous message. A team of lawyers followed up on the matter and found that the "relationship was consensual and had no effect on the conduct of the company’s business."

Stonecipher - seen here just before the board turned on the engine - is married with two children.

The government is still looking into the influence Boeing's staff had in pushing federal contracts toward the company in exchange for perks.

Still, it's unclear what Stonecipher's bedroom activities have to do with Boeing's performance. If adultery was widely used as a legitimate cause for dismissal, the workforce would be small indeed. And that's not counting televangelists.

Shares of Boeing sit at $58.30 - just 44 cents below a 52-week high. Boeing insisted that "neither the career nor the compensation of the female executive was influenced by this relationship." So why the Puritan push? ®

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