United CEO Smisek Leaves Amid Federal and Internal Investigation
It seems that United may have run a nonstop flight from Newark to Columbia, SC for the benefit of the former chairman of the Port Authority of New York & New Jersey. The wife of David Samson has a house in near Columbia Metropolitan Airport (CAE) and United later canceled this flight, which Samson called the “chairman’s flight”, shortly after he resigned from the Port Authority. Prosecutors allege Mr. Samson used his position for his own personal benefit.
The other two executives at United who’ve been asked to leave are Nene Foxhall, executive vice president of communications and government affairs, and Mark R. Anderson, senior vice president of communications and government affairs.
Smisek leaves with a $4.9 million dollar cash severance package, unpaid salary, stock options, title to the car provided for his use by United as well as lifetime travel and parking benefits. This is someone who just offered customer service reps the opportunity to work from home, but with a 20% pay cut.
The Association of Flight Attendants issued the following statement:
United Airlines Flight Attendants, represented by the Association of Flight Attendants-CWA (AFA), today welcomed new executive leadership at United Airlines with the appointment of Oscar Munoz as Chief Executive Officer.
“Flight Attendants are dedicated to the long-term success of United Airlines. We welcome new leadership and a new direction that recognizes the value of frontline workers and the full potential of our airline,” said AFA International President Sara Nelson. “Oscar Munoz has an impressive business record, including at other highly unionized companies. AFA looks forward to working with him to conclude contract negotiations and return our airline to premier status in the world.”
United Airlines, Continental Airlines and Continental Micronesia merged five years ago on paper, but the airline is still maintaining separate flight attendant operations and has yet to conclude a flight attendant merged agreement. AFA recently filed for federal mediation in order to bring the negotiations to a conclusion.
“We believe a fresh perspective will be healthy for United Airlines in all areas, especially where labor relations languished under previous leadership. New leadership has the potential to improve the flying experience for our passengers and insure Flight Attendants and other frontline workers are recognized, engaged and included in the success of our airline,” said Nelson. “We look forward to discussing a bright future with our new CEO.”
United’s new CEO, Oscar Munoz, sent the following message to employees:
Dear fellow employees:
Today we are announcing a series of executive changes, which are effective immediately. I recognize that this news is unexpected, and I want you to hear it directly from me, as United’s new CEO.
Jeff Smisek, Nene Foxhall, EVP of communications and government affairs, and Mark Anderson, SVP of corporate and government affairs, have stepped down from their roles. These departures are in connection with United’s previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey.
In addition, the company announced Henry L. Meyer III, a current United director and the lead independent director, has been named non-executive chairman of the board.
As we move forward, let me take a moment to tell you a little bit about myself. As you may know, I have been on the board of directors of United, and previously Continental, for more than a decade. I am also a longtime United customer. Before today, I was the president and COO of CSX, one of the largest railroads in North America. Prior to that, I worked for several well known consumer brands including AT&T, Pepsico, and The Coca-Cola Company.
I took this job because I am excited by what we can do together. There is incredible opportunity for innovation, for earnings growth, and for improving an experience that is essential to the vitality of global business and to the personal lives of millions of people. I will be relentless in pursuing these goals, and I hope and expect that all of you will share that same passion.
In the coming weeks, I will be making my first visits around the system. I want to talk to as many of you as possible because I want to get to know you and what you think about how things are going. How can we operate better? How can we better serve our customers? What support do you need to deliver that? You’ll be seeing me frequently; I intend to regularly travel the system to hear about our operations directly from you – and you can hold me accountable for that.
In my career, I’ve found that three things are critical to any successful business. First, we must focus on customers and what we can to do help them. In the telecommunications, consumer products and railway businesses, there are very real consequences if you don’t meet the consumer’s needs and desires. There are also substantive rewards for doing so, and especially for exceeding customer expectations. Every day, you win or lose customers based on the slightest change in value and quality.
As you know, in the airline business, this is especially critical. Getting people where they want to go, reliably and happily, can make or break their ability to succeed in a work endeavor or to hug a family member at an important moment.
At United, I will dedicate myself to making our airline flyer-friendly.
Second, in any organization, especially a great airline, it’s all about teamwork. I like to refer to this as “shared purpose.” We are in a service business, and the thousands of people who work here are the key ingredient determining our success. To get our passengers where they want to go safely and happily requires thousands of us working together with a shared purpose of supporting each other in serving our customers. To achieve this, we must create and sustain a respectful dialog about our common goals – an ongoing conversation among ourselves. We cannot do this apart.
Third, I am excited to be a part of a company and industry that demands innovation. The world around us is changing. There are new forms of loyalty programs and affinity groups, a constantly changing regulatory environment, plus new digital and networking technologies that are emerging on a daily basis. At United, we will embrace this change, and make this an energized and exciting place to work.
Above all, my career has taught me that safety is paramount. Our passion for the safety of our people and our customers must be at the core of everything we do.
As we bring this airline forward, I promise to hold true to these principles of customer focus, teamwork through our shared purpose, continual innovation, and of course, safety.
I want our customers, my fellow workers, and our communities to respect each other and take pride in our accomplishments. Thank you for your dedication to our customers and to United, and I look forward to meeting you soon.
United Continental Holdings, Inc. today announced that it has named Oscar Munoz as president and chief executive officer. The company also announced that Jeff Smisek has stepped down from his roles as chairman, president and chief executive officer, and as a director. These changes are effective immediately.
Munoz brings to this role deep and broad experience in the transportation industry and large consumer brands including AT&T, Pepsico and The Coca-Cola Company. He most recently served as president and chief operating officer of CSX Corporation.
Henry Meyer, non-executive chairman of the board of directors of United Continental Holdings, Inc. said, “Oscar’s track record demonstrates that he has the right blend of strategic vision and strong leadership to continue United’s upward trajectory. United is well positioned to continue executing on its strategic plan to further improve performance and the value and service it provides to its customers. I’m honored to have been elected non-executive chairman by my fellow directors. The board thanks Jeff for his service to both United Airlines and Continental Airlines.”
“It is truly a privilege to serve as United’s CEO. United has an incredible opportunity for improving an experience that is essential to the vitality of global business and to the personal lives of millions of people, for innovation, and for earnings growth,” said Oscar Munoz, president and CEO of United. “In my years serving on the board, I have been impressed by the dedication and skill of my new coworkers. Together, we will make United the top-performing airline.”
Prior to joining United Airlines, Munoz served as president and chief operating officer of CSX Corporation, a premier transportation company. Munoz also served as a director at CSX. During Munoz’s tenure, CSX transformed itself into an industry leader in customer focus, reliability and financial performance. CSX was named one of Institutional Investor’s Most Honored Companies for a decade of excellent financial performance, including increasing its operating income by nearly 600%. Prior to joining CSX, Munoz served in various senior financial and strategic capacities at some of the world’s most recognized consumer brands, including AT&T, The Coca-Cola Company and Pepsico.
He has served on the board of directors for United Continental Holdings, Inc. since 2010 and served on the board of directors of Continental Airlines, Inc. since 2004. Munoz is active in several industry coalitions and philanthropic and educational organizations including the University of North Florida’s board of trustees and the PAFA advisory board ofVanderbilt University.
Munoz graduated from the University of Southern California with a bachelor’s degree in business administration, and he received a master’s in business administration from Pepperdine University. Munoz has been named one of the “100 Most Influential Hispanics” by Hispanic Business magazine.
The company also announced that its executive vice president of communications and government affairs and its senior vice president of corporate and government affairs have stepped down.
The departures announced today are in connection with the company’s previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey. The investigations are ongoing and the company continues to cooperate with the government.
The company’s internal investigation and the related circumstances do not raise any accounting or financial reporting concerns.