UA Appoints 3 New Independent Directors & confirms Proxy Contest By PAR & Altimeter
Mar 8, 2016, 6:20 am
#31
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So two of the three independent directors had senior executive roles at airlines that UA either competes with (DL) or is allied with (AC). Would their non-disclosure agreements with DL and AC now be expired, and would their inside knowledge about these carriers be of value in charting UA's future course?
Milton was gone before those airplanes were ordered.
Mar 8, 2016, 6:22 am
#32
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Saw it just on CNBC, but activists are putting up nominations for 6 new directors to the board. One of the nominees is apparently Gordon Bethune. Will get a link if I can find one shortly...
ETA: It's behind a paywall at WSJ, but PAR Capital Management and Altimeter Capital Management (combined they own 7% of UAL stock) are putting forth the nominees. Apparently they want Bethune as chairman of the board. Certainly puts these recent nominations in a new light - perhaps a way to shore up support for the current board and try to head off this move.
ETA: It's behind a paywall at WSJ, but PAR Capital Management and Altimeter Capital Management (combined they own 7% of UAL stock) are putting forth the nominees. Apparently they want Bethune as chairman of the board. Certainly puts these recent nominations in a new light - perhaps a way to shore up support for the current board and try to head off this move.
http://www.wsj.com/articles/united-c...ats-1457441624
Mar 8, 2016, 6:24 am
#33
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Full link on the activist press release here. The full slate is:
Gordon Bethune (needs no intro)
Brad Gerstner (CEO of Altimeter Capital)
Barney Harford (former Orbitz CEO)
Rodney O'Neal (former Delphi Automotive CEO)
Tina Sharkey (CEO of SherpaFoundry)
Brenda Baty (former SVP of Revenue Management at Carnival Cruise Lines)
Gordon Bethune (needs no intro)
Brad Gerstner (CEO of Altimeter Capital)
Barney Harford (former Orbitz CEO)
Rodney O'Neal (former Delphi Automotive CEO)
Tina Sharkey (CEO of SherpaFoundry)
Brenda Baty (former SVP of Revenue Management at Carnival Cruise Lines)
Mar 8, 2016, 6:55 am
#34
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Full link on the activist press release here. The full slate is:
Gordon Bethune (needs no intro)
Brad Gerstner (CEO of Altimeter Capital)
Barney Harford (former Orbitz CEO)
Rodney O'Neal (former Delphi Automotive CEO)
Tina Sharkey (CEO of SherpaFoundry)
Brenda Baty (former SVP of Revenue Management at Carnival Cruise Lines)
Gordon Bethune (needs no intro)
Brad Gerstner (CEO of Altimeter Capital)
Barney Harford (former Orbitz CEO)
Rodney O'Neal (former Delphi Automotive CEO)
Tina Sharkey (CEO of SherpaFoundry)
Brenda Baty (former SVP of Revenue Management at Carnival Cruise Lines)
Last edited by dkc715; Mar 8, 2016 at 7:02 am
Mar 8, 2016, 7:07 am
#35
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Full link on the activist press release here. The full slate is:
Gordon Bethune (needs no intro)
Brad Gerstner (CEO of Altimeter Capital)
Barney Harford (former Orbitz CEO)
Rodney O'Neal (former Delphi Automotive CEO)
Tina Sharkey (CEO of SherpaFoundry)
Brenda Baty (former SVP of Revenue Management at Carnival Cruise Lines)
Gordon Bethune (needs no intro)
Brad Gerstner (CEO of Altimeter Capital)
Barney Harford (former Orbitz CEO)
Rodney O'Neal (former Delphi Automotive CEO)
Tina Sharkey (CEO of SherpaFoundry)
Brenda Baty (former SVP of Revenue Management at Carnival Cruise Lines)
SL
Mar 8, 2016, 7:11 am
#36
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According to the updated WSJ article, Oscar's current contract has a clause that will have him take over as chairman next year. The fact that PAR and Altimeter wanted to put Bethune in that seat - presumably not to warm the seat for a year - really makes it seem like Oscar would have much more limited authority if this slate gets through.
I agree that the current board is largely responsible for letting Jeff burn UA's reputation to the ground, but I highly question if the answer is to pretty much give the keys back to Bethune. Oscar has been doing good work so far, and he deserves a fair shot.
ETA: Gordon claims he would not come back for more than 2 years in an interview. If that's the case - and he and Oscar can work together - I could live with that.
I agree that the current board is largely responsible for letting Jeff burn UA's reputation to the ground, but I highly question if the answer is to pretty much give the keys back to Bethune. Oscar has been doing good work so far, and he deserves a fair shot.
ETA: Gordon claims he would not come back for more than 2 years in an interview. If that's the case - and he and Oscar can work together - I could live with that.
Mar 8, 2016, 7:45 am
#37
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United Comments On Proxy Contest Announced By PAR And Altimeter
United Comments On Proxy Contest Announced By PAR And Altimeter
CHICAGO, March 8, 2016 /PRNewswire/ -- United Continental Holdings, Inc. (NYSE: UAL) today confirmed that it has been informed by hedge funds PAR Capital Management, Inc. and Altimeter Capital Management, L.P. of their intention to nominate six director candidates for election to the Board of Directors at the Company's 2016 Annual Meeting of Shareholders. The nominees include Gordon Bethune, Brad Gerstner, Barney Harford, Rodney O'Neal, Tina Sharkey and Brenda Yester Baty. PAR and Altimeter have previously disclosed that they are acting as a group that collectively owns approximately 7.1% of the Company's outstanding shares of common stock.
Henry L. Meyer III, Non-Executive Chairman of the Board, said, "We are deeply disappointed that after United attempted to engage in a constructive, good-faith dialogue with PAR and Altimeter, repeatedly communicated our willingness to make meaningful changes in our Board, publicly announced our intention to name four new independent directors with deep relevant experience and named three of them yesterday, PAR and Altimeter have unilaterally taken this hostile action with no concern that a proxy fight could distract the Company from executing on Oscar's strategic plan."
During United's discussions with PAR and Altimeter, the Company clearly communicated its interest in negotiating a reasonable settlement and, in a show of good faith, offered to amend its bylaws to extend its March 12 director nomination deadline. Despite the Company's offer, not only were PAR and Altimeter uninterested in extending the deadline, but they also refused to cooperate in making their nominees available to be interviewed – which would be a necessary step for the Board to recommend any of their candidates – before launching a proxy contest.
Meyer added, "Underscoring our commitment to good corporate governance, and with the benefit of shareholder input, the Board just appointed three new independent directors with deep relevant experience to the Board, and we plan to appoint a fourth new independent director in the near term. We remain open to engaging in productive conversations with PAR and Altimeter."
Oscar Munoz, who plans to resume the role of President and Chief Executive Officer on March 14, 2016, said, "We have been focused on improving the customer and employee experience at United, and the results are evident in our improved operational and financial performance. United has emerged as a top performer in on-time arrivals and completion factor among our largest industry peers. United's 2015 earnings were one of the best in the Company's history, and we made progress shrinking the margin gap with our closest competitors, strengthening our balance sheet, and returning significant cash to shareholders. Our momentum is strong, we are working hard, and we are confident there is substantial upside yet to come."
Yesterday, the Company announced that its Board of Directors had appointed three new highly qualified independent directors to the Board: James A.C. Kennedy, the former President and Chief Executive Officer of T. Rowe Price Group, Inc., Robert A. Milton, the former Chairman and Chief Executive Officer of ACE Aviation Holdings Inc., and previously Chairman, President and Chief Executive Officer of Air Canada, and James M. Whitehurst, President and Chief Executive Officer of Red Hat, Inc., and previously Chief Operating Officer of Delta Air Lines, Inc., effective immediately.
United's three new directors will be nominated by the Board for re-election at the 2016 Annual Meeting. The Board expects to appoint a fourth new independent director in the near term, who would also be nominated for re-election at the 2016 Annual Meeting. In connection with the appointment of the new directors, certain current directors will step down from the Board at or in advance of the 2016 Annual Meeting.
CHICAGO, March 8, 2016 /PRNewswire/ -- United Continental Holdings, Inc. (NYSE: UAL) today confirmed that it has been informed by hedge funds PAR Capital Management, Inc. and Altimeter Capital Management, L.P. of their intention to nominate six director candidates for election to the Board of Directors at the Company's 2016 Annual Meeting of Shareholders. The nominees include Gordon Bethune, Brad Gerstner, Barney Harford, Rodney O'Neal, Tina Sharkey and Brenda Yester Baty. PAR and Altimeter have previously disclosed that they are acting as a group that collectively owns approximately 7.1% of the Company's outstanding shares of common stock.
Henry L. Meyer III, Non-Executive Chairman of the Board, said, "We are deeply disappointed that after United attempted to engage in a constructive, good-faith dialogue with PAR and Altimeter, repeatedly communicated our willingness to make meaningful changes in our Board, publicly announced our intention to name four new independent directors with deep relevant experience and named three of them yesterday, PAR and Altimeter have unilaterally taken this hostile action with no concern that a proxy fight could distract the Company from executing on Oscar's strategic plan."
During United's discussions with PAR and Altimeter, the Company clearly communicated its interest in negotiating a reasonable settlement and, in a show of good faith, offered to amend its bylaws to extend its March 12 director nomination deadline. Despite the Company's offer, not only were PAR and Altimeter uninterested in extending the deadline, but they also refused to cooperate in making their nominees available to be interviewed – which would be a necessary step for the Board to recommend any of their candidates – before launching a proxy contest.
Meyer added, "Underscoring our commitment to good corporate governance, and with the benefit of shareholder input, the Board just appointed three new independent directors with deep relevant experience to the Board, and we plan to appoint a fourth new independent director in the near term. We remain open to engaging in productive conversations with PAR and Altimeter."
Oscar Munoz, who plans to resume the role of President and Chief Executive Officer on March 14, 2016, said, "We have been focused on improving the customer and employee experience at United, and the results are evident in our improved operational and financial performance. United has emerged as a top performer in on-time arrivals and completion factor among our largest industry peers. United's 2015 earnings were one of the best in the Company's history, and we made progress shrinking the margin gap with our closest competitors, strengthening our balance sheet, and returning significant cash to shareholders. Our momentum is strong, we are working hard, and we are confident there is substantial upside yet to come."
Yesterday, the Company announced that its Board of Directors had appointed three new highly qualified independent directors to the Board: James A.C. Kennedy, the former President and Chief Executive Officer of T. Rowe Price Group, Inc., Robert A. Milton, the former Chairman and Chief Executive Officer of ACE Aviation Holdings Inc., and previously Chairman, President and Chief Executive Officer of Air Canada, and James M. Whitehurst, President and Chief Executive Officer of Red Hat, Inc., and previously Chief Operating Officer of Delta Air Lines, Inc., effective immediately.
United's three new directors will be nominated by the Board for re-election at the 2016 Annual Meeting. The Board expects to appoint a fourth new independent director in the near term, who would also be nominated for re-election at the 2016 Annual Meeting. In connection with the appointment of the new directors, certain current directors will step down from the Board at or in advance of the 2016 Annual Meeting.
Mar 8, 2016, 7:49 am
#38
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My only concern is that if Gordon comes back, United instantly becomes "his" airline. I think he can do a lot of good here, but people in the airline business do not forget easily, and he will have to rehabilitate his "HIV-positive" remark eventually. I think the way to do it would be to point to the admirable work (and sacrifices made) by the United people in the years 2003-2012 to get the company on solid financial footing and in position to merge, noting that United of 2003 was decidedly another era. I also would not want to see his presence undermine the good momentum Oscar has spun up.
The activist position taken by PAR/Altimeter earlier this year signaled a widely-held belief that there was a lack of leadership on the BOD, as it was mostly a no-show while Smisek ran roughshod over UAL, destroying its reputation. As a corollary to that, the lack of airline experience on the board is a concern, and the move to add Whitehurst and Milton, in particular, is aimed to address that.
I don't think it's a sure thing that Bethune and the activist slate will be elected, but I am heartened to see Gordon associated with it, rather than someone like Carl Icahn or his ilk.
The activist position taken by PAR/Altimeter earlier this year signaled a widely-held belief that there was a lack of leadership on the BOD, as it was mostly a no-show while Smisek ran roughshod over UAL, destroying its reputation. As a corollary to that, the lack of airline experience on the board is a concern, and the move to add Whitehurst and Milton, in particular, is aimed to address that.
I don't think it's a sure thing that Bethune and the activist slate will be elected, but I am heartened to see Gordon associated with it, rather than someone like Carl Icahn or his ilk.
Last edited by EWR764; Mar 8, 2016 at 7:57 am
Mar 8, 2016, 7:50 am
#39
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Wonder why they even quoted Oscar - none his comments pertain to the proxy challenge itself.
As for Meyer - of course he's disappointed...Gordon wants his seat at the table!
Think Gordon is scheduled for a CNBC interview at 10am...will see what he has to say about it.
As for Meyer - of course he's disappointed...Gordon wants his seat at the table!
Think Gordon is scheduled for a CNBC interview at 10am...will see what he has to say about it.
Mar 8, 2016, 8:15 am
#40
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Gordon and Henry should talk
These two unique leaders know each other, and have some similar ideas about management. They both see things from a higher perspective rather than at a micro level. My hope is that something gets worked out where the carrier can continue its slow plodding improvements that we are now seeing. Munoz clearly has been well received, and Bethune (while salty) is a beloved figure by those who worked for him and those who flew when he was in charge. IMHO.
My only concern is that if Gordon comes back, United instantly becomes "his" airline. I think he can do a lot of good here, but people in the airline business do not forget easily, and he will have to rehabilitate his "HIV-positive" remark eventually. I think the way to do it would be to point to the admirable work (and sacrifices made) by the United people in the years 2003-2012 to get the company on solid financial footing and in position to merge, noting that United of 2003 was decidedly another era. I also would not want to see his presence undermine the good momentum Oscar has spun up.
The activist position taken by PAR/Altimeter earlier this year signaled a widely-held belief that there was a lack of leadership on the BOD, as it was mostly a no-show while Smisek ran roughshod over UAL, destroying its reputation. As a corollary to that, the lack of airline experience on the board is a concern, and the move to add Whitehurst and Milton, in particular, is aimed to address that.
I don't think it's a sure thing that Bethune and the activist slate will be elected, but I am heartened to see Gordon associated with it, rather than someone like Carl Icahn or his ilk.
The activist position taken by PAR/Altimeter earlier this year signaled a widely-held belief that there was a lack of leadership on the BOD, as it was mostly a no-show while Smisek ran roughshod over UAL, destroying its reputation. As a corollary to that, the lack of airline experience on the board is a concern, and the move to add Whitehurst and Milton, in particular, is aimed to address that.
I don't think it's a sure thing that Bethune and the activist slate will be elected, but I am heartened to see Gordon associated with it, rather than someone like Carl Icahn or his ilk.
Mar 8, 2016, 8:19 am
#41
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Gordon on CNBC: he loves Oscar and says he would leave him in place. Says UA needs better governance and more knowledge around the airline business. He reiterated that he does not want to do this more than 2 years. Gets a bit squishy on the timing and why the demand that he be chairman seemed to be a sticking point.
Mar 8, 2016, 8:22 am
#42
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These proxy battles rarely make any headway, particularly where, as here, most of the shares are institutionally held.
btw, where were these "activists" when Smisek was burning the house down???
btw, where were these "activists" when Smisek was burning the house down???
Mar 8, 2016, 8:29 am
#43
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Gordon on CNBC: he loves Oscar and says he would leave him in place. Says UA needs better governance and more knowledge around the airline business. He reiterated that he does not want to do this more than 2 years. Gets a bit squishy on the timing and why the demand that he be chairman seemed to be a sticking point.
Kudos for Faber for actually conducting a serious interview instead of another CNBC puff piece.
Mar 8, 2016, 8:32 am
#44
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Hasn't UA been adopting CO policies since the merger, which is why MP has been devalued so much?
If that's the case, Bethune as chairman would mean continued devaluation?
The people cheering him are talking from the POV of investors or shareholders, not customers? Hedge fund is driving this so yeah, it is highly unlikely that their main concern is customers or employees, despite Bethune saying he's a part of this effort because he has all these friends among the employees.
Yeah Bethune was saying despite increased cash flow and a strong balance sheet, UA should be number one, because of fleet, employees and routes.
If that's the case, Bethune as chairman would mean continued devaluation?
The people cheering him are talking from the POV of investors or shareholders, not customers? Hedge fund is driving this so yeah, it is highly unlikely that their main concern is customers or employees, despite Bethune saying he's a part of this effort because he has all these friends among the employees.
Yeah Bethune was saying despite increased cash flow and a strong balance sheet, UA should be number one, because of fleet, employees and routes.
Mar 8, 2016, 8:46 am
#45
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