Chairman at United Continental Stepping Down
- Updated: April 20, 2016
Two other members of the current board will also not stand to be reelected during the shareholders meeting.
This ends up being a big victory for PAR Capital and Altimeter, a pair of investment firms that together own a stake of 7.2% in United.
The compromise entered into between United and the pair of hedge funds will bring to an end any possibility of a fight taking place during the shareholder’s meeting.
It also is a sign that United might be stabilizing after what has been a turbulent past few months.
In March, the pair of hedge funds nominated six board members, including former CEO at Continental Gordon Bethune and they said they would be pushing more shareholders to vote for the nominees so they could shake things up in the airline.
However, the two hedge funds said they would drop those plans for more control of the board following United’s agreement to add Edward Shapiro the managing director of PAR Capital and Barney Harford the former CEO at Orbitz to the United board.
United and the two hedge funds said as well that they are planning to name one more independent director to their board within a six month period.
Oscar Munoz the CEO at United who was previously expected to be named chairman following the annual meeting of 2017 will now wait one more year.
Robert Milton, a former Air Canada CEO who last month was named to the board of United, will become its new chairman.
This past September, Jeff Smisek the former CEO was forced to step down following a corruption probe. The airline was accused of attempting to curry favor of the Port Authorities of New York and New Jersey.
Munoz, who was president of CSX railroad, was hired as a replacement for Smisek. However, he was on the job just a few weeks prior to suffering a severe heart attack and needing a heart transplant. He returned full time to work last month.
Reaction by Wall Street seemed lukewarm at best, as stock at United was flat on Wednesday in midday trading.
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