United Reverses Decision To Make Oscar Munoz Chairman Of The Board

Regulatory filings today indicate that United’s CEO, Oscar Munoz, won’t become chairman of the board in 2018, as was originally expected. This is a reversal of his previous employment agreement, as he’s now leaving “future determinations related to the Chairman position to the discretion of the Board.” I suppose that means they could still appoint him chairman of the board if they so choose, but it’s no longer a sure thing.

United-CEO

A reason wasn’t given for this change in direction. Some are suggesting that this is related to the horrible few weeks that United has had, as David Dao was dragged off a United flight, and United handled the situation horribly. We have heard that United’s board stands behind him, given the calls from some for Oscar to resign. Of course that’s what they said publicly, but that doesn’t necessarily mean that’s what’s being said behind closed doors.

While it’s certainly possible that this is related to the “dragging” incident, let’s also keep in mind that Munoz suffered a heart attack in October 2015, and it’s pretty amazing how quickly he returned to work, given that he had a heart transplant. It could be that he doesn’t want to expand his role at the airline, and might retire sooner than he initially expected. United poached American’s president, Scott Kirby, last year, presumably with the intention of eventually making him CEO.

Only time will tell.

Comments

  1. If I were a fly and I had been in that board room, this is what I would likely have heard:
    “Oscar, the position of Chairman is definitely yours, but you must agree that the “optics” would be very bad if we elevated you right after the 3411 debacle. It would (a) raise doubt about the sincerity of your mea culpa — that you apologized simply to salvage your promotion, making your apology tour a waste; and (b) make this board seem insensitive and callous for appearing to reward bad performance in the face of human suffering. So, just go out there and make us proud by transforming the company as you told us you would and were doing pretty well until 3411 happened. Let’s revisit the promotion matter in, say, ’19, maybe ’20…okay?”

  2. I don’t think Kirby was brought in to become CEO. Kirby was brought in to play the role Isom plays at AA, essentially taking a lot of ops responsibilities away from the CEO post, who instead works business side and with labor. I think Oscar was probably promised the Chairman and CEO dual title. That said, Bob Milton is one of the single best airline executives out there and his being Chairman is a good thing.

  3. I hate to sound like a dunce, but can somebody clear up the difference in duties between the CEO & Chairman?

  4. I almost feel sorry for Munoz… almost.

    Smisek needed to go. I don’t know of anyone who enjoyed his tenure. Staff didn’t, flyers didn’t. There was even a fly-in FlyerTalk celebration when he left. I’m assuming similar happened with employees.

    Munoz is now left the job of trying to turn this mess around. He’s been at it for ~1 year, and we were starting to see some encouraging changes. The UA3411 incident and Munoz’s comments show, however, that he nor the airline has made the changes necessary to get the airline headed in the right direction.

    Even at what he’s getting paid, I wouldn’t want his job. Operations I can deal with. Handling pissy, entitled, union-labor is well beyond my abilities. I’d probably fold the airline and start over to get rid of the union contracts. Then treat the employees well, but it’s still a business.

  5. Congrats Lucky…u made it official….u are the rat that will do anything to make United look good. I no lger need to read your paid infomercial blog

  6. ‘Oscar’, ‘Oscar’, ‘Oscar’; Ben, shees, why this familiarity?? Do you know him personally? Do you have soft spot for United because ‘Oscar’ is in charge. I think ‘Mr. Munoz’ fits him fine. You say he’s a nice guy — and he may well be amongst his friends and colleagues — but he sure showed little empathy and sympathy towards Dr. Dao or passengers in general until United’s stock took a dive. Boy, I hope Dao took them to the friggin cleaners.

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