United Board May Receive New Chairman
Joe Cortez April 20, 2016
SAN FRANCISCO, CA - JULY 25: The United Airlines name is displayed on a barrier at San Francisco International Airport on July 25, 2013 in San Francisco, California. United Continental Holdings, the parent company of United Airlines, reported record revenues with second quarter earnings of $469 million. (Photo by Justin Sullivan/Getty Images)
Former airline executives could replace the current chair as part of resolution with activist investors.
The boardroom conflict at United Airlines could be nearing an end and may include the appointment of a new chairman. Bloomberg reports the carrier’s board could be nearing the end of negotiations with two activist investors, but at the cost of non-executive chairman Henry Meyer III.
The two activist investors at the center of the problem – Altimeter Capital Management and PAR Capital Management – began their protest in March, calling out Meyer and United chief executive Oscar Munoz over underperformance issues. In addition to financially lagging behind their legacy competitors since merging with Continental Airlines, the two groups expressed frustration with an “underqualified, ineffective, and entrenched board,” over communication issues when Munoz took a medical leave of absence.
Sources close to the negotiations told Bloomberg a settlement with the investors could come as soon as April 20, when United announces their first quarter financial reports. As part of the concessions, the two groups may be able to seat more appointees to the airline’s board, but not necessarily all six they originally nominated to join the team.
In addition, the choices to replace Meyer may be limited to two former airline executives: Robert Milton, former chief executive of Air Canada and James Whitehurst, former chief operating officer at Delta. Between the two, Milton could hold a competitive edge due to his experience leading Air Canada. The activists’ first choice for board chairman, former Continental CEO Gordon Bethune, is no longer believed to be a candidate.
The sources close to the shuffling noted that the negotiations are continuing and no deals have been reached. None of the parties offered comment to Bloomberg about the potential board shuffling.
[Photo: Photo by Justin Sullivan/Getty Images]
WOW... let me get this straight......CEO Oscar Munoz has a near fatal heart attack in the FIRST month of his tenure and one month later a HEART TRANSPLANT.... and Altimeter and PAR are saying that shortly after he comes back to work (earlier than expected, btw...) that he is under-preforming ?????? sounds like special interests to me.......
If the investors don't like the management, then they can sell their shares.