Exleftseat

There is precedent. Is this where we are headed
"http://www.panamrailways.com/"

flyr16

. He'll receive a separation payment in the amount of $4,875,000, and remain eligible for a pro-rated bonus. Smisek will have health insurance until his is eligible for Medicare, and maintain flight benefits and parking privileges for the remainder of his lifetime. He also gets to keep his company car."[/QUOTE]


What would he have to have done NOT to get this golden parachute?

JHIN

Dont let the door hit ya where the good lord split ya - see ya Smisek!!

Now...elect me as head of UAL & I will show you how to be profitable with goid customer service bringing UAL back to the top of all airlines!

HitAndRun

I think those hoping for significant improvement in United's performance and frequent flyer program are going to be disappointed. Smisek was not let go for operational issues but due to potential ethics lapses.

The reality is that Wall street and industry dynamics preclude the return of the days where frequent fliers were richly rewarded for their loyalty. United is a crappy airline with lousy employee morale, horrible operational performance and disdain for it's most frequent fliers. The most you can hope for is that someone at United finally understands how bad flying United is and decides to fix front line employee attitude and operational performance.

I gave up on United a year back and jumped to Delta, once flying United on business became too much of a distraction. I was fortunate that United is no longer viable in Seattle and Delta stepped into the void. Laugh all you like at Delta's frequent flier program - and for the most part I agree with you - but the reality for a business travel is that Delta is a world away from United in terms of customer service, operational performance and customer experience.

The best you can hope of United is that it becomes more Delta like in performance and service. I doubt it will happen without a huge housecleaning at United.

This written while in Beijing by someone who ponied up $5800 for a Delta one roundtrip from USA to PEK...something I would never do while flying United.

vkykam

I agree with those that think there's more to come. You don't get a CEO and two high-up's quitting/firing without some inside knowledge of what's coming down the pipe. If it were purely performance issues, it would have been just Smisek, nor would they have mentioned the ongoing investigation specifically as part of the press releases. Where there's smoke, there's fire.

My question is, does UA have to pay to defend Smisek for the actions during his tenure? Is there an indemnity clause somewhere in his hiring contract that would provided legal after his departure?

Is the $4m+ simply to distance UA from Smisek? Or is it more like "Here's $4m, take it and defend yourself?" Maybe the evidence is there, but not strong enough for a certain conviction that UA would set him sailing with a suitcase of money and leave him to fend for himself?

Either way, get your popcorn and armchair ready.

Pat89339

Come join the fun Friday!

http://www.flyertalk.com/forum/commu...irst-post.html

exerda

Well, he could actually lose it in the unlikely case the feds get him as part of the bribery scandal w/r/t PANYNJ.

cerealmarketer

If he is terminated for 'cause' his contract says he forfeits exit compensation.

From his contract...

"Cause" means, in general, (i) gross neglect or willful gross misconduct (for Mr. Smisek such conduct must result in a material economic harm
to the Company); (ii) conviction of, or plea of nolo contendre to, a felony or crime involving moral turpitude; (iii) the executive's commission
of an act of deceit or fraud intended to result in personal and unauthorized enrichment of the executive at the Company's expense; or (iv) a
material breach of a material obligation of the executive.


Note in the filing today they were specific about highlighting point (ii) - being convicted of a crime - as a clawback option if it comes to fruition as part of the case / investigation.

Which means the board feels he did not engage in (i), (iii), or (iv), and there is no conclusion on (ii) - it's an outstanding matter, even if a low probability one.

Apparently though, Jeff was allowed to become a drunk, while Rainey, Compton, and Hart are not.

"For Messrs. Rainey, Compton and Hart, "cause" also includes (a) the executive's
abuse of alcohol or drugs rendering the executive unable to perform the material duties and services required by his position or (b) a material
violation of Company policies."

entropy

I do think Gordo probably had a personal mentor/mentee relationship with Smisek and likes the guy, and doesn't want to disparage him. I don't agree with him.

The whole merger was botched from the first scribble of the United logo with in mega-serif CO Font with the globe.

CashN

I wish I would have known on today's flight but I will surely start a chant on the Thurs return. If karma exists I expect much more to come...

cerealmarketer

I'll bet they will be spending a fair amount of time in a fishing boat in Texas in the coming 2 years.

And at some point Jeff probably gets to be 'of counsel' or other advisor at a law firm or financial institution if he feels like working again.

blueman2

Yes, all public companies have D&O insurance that will cover Smisek. Even if criminal investigation, D&O often covers up to some limit. Fraud is not covered, but this type of investigation would be. Company does not pay, the insurer pays.

LASUA1K

Gordo has always been over rated. He's the blame for all the crappy regionals. I'm happy to see Smisek gone and Gordo can finally go away.

username

Wow, was busy all day then I heard this on NPR and went to FT a few hours ago to see the reactions. I think we should not celebrate too early. If we end up with people who are like Doug Parker or the Delta guy who really devalued SkyMiles, it will be much worse than Smisek.

mike1968

Bloomberg seems to be tacking over toward your hypothesis that corruption probe plus growing list of underperformance issues 4 years after the merger.

http://www.bloomberg.com/news/articl...rruption-probe

while asleep at the wheel may be too strong, the fact he was Chairman, President an CEO implies to me that it was clearly going to be very difficult to push him out and that they were obviously inclined to give him a lot of leeway to run the show without a lot of interference fitting with the top down "yes sir" /"my way or the highway" culture he brought over.

When the airline is this visibly bad and in the news regularly for minor issues like a flight diversion or system back up that get spectacularly out of hand in one of the best airline business environments in almost 20 years, it's not hard for me to agree that some savvy board members used this as the air cover to make a move to try to right the ship before it's too late.

Time will tell if they can work to fix, the visible soft product and re empower and motivate the employee base but unfortunately so much capital has already gone to hard product things like truly torturous slimline seats and lord only knows what as far as the awful antiquated IT systems that we'll be stuck with those investments for quite some time.