- Chairman Henry Meyer, two other directors to leave board
- Settlement pact with hedge funds to be announced Wednesday
United Continental Holdings Inc. has reached an agreement with activist investors that includes naming former Air Canada CEO Robert Milton as chairman as part of a broader board overhaul, a person familiar with the talks said.
Under an agreement to be announced Wednesday morning, Henry Meyer III, United’s chairman for seven months, and two other directors will leave the board as part of a shake-up sought by Altimeter Capital Management LP and PAR Capital Management Inc., which combined control 7.2 percent of the airline’s stock, the person said, asking not to be identified as the information isn’t public. Bloomberg first reported that a settlement had been reached on Monday.
Meyer, the 66-year-old retired banker, has served as United’s non-executive chairman since the September ouster of former Chief Executive Officer Jeff Smisek, but drew criticism for communication lapses when new CEO Oscar Munoz fell gravely ill. He will be replaced by Milton, one of two directors with airline experience named to United’s board a day before the proxy fight became public, the person said.
United spokeswoman Megan McCarthy declined to comment.
The company has been working with the investors to end a boardroom battle that threatened to overshadow Munoz’s efforts to turn around United, whose stock and operational performance have largely lagged peers since it acquired Continental Airlines in 2010.
The parties could have an agreement in hand by the time United reports earnings on April 20, people familiar with the process said earlier this week.
CNBC reported the plan to name Milton late Tuesday.
Employees have rallied in support of Munoz, who took over from Smisek in September after leaving railroad CSX Corp. Munoz was sidelined with a heart attack about a month later and subsequently received a heart transplant.
Pilots and flight attendants picketed Par and Altimeter headquarters in Boston on April 6, complaining that the board fight was creating unnecessary distractions.
During his recovery, Munoz made appearances around the company and pushed for labor peace as a step to revitalizing United’s culture and improving service. The approach has been “night and day” from the divisive tactics favored by previous management teams, said Craig Symons, president of the union that represents United’s flight dispatchers.