United CEO Munoz `Recovering Well' After Heart Transplantby
Chief set to return to work no earlier than end of quarter
Likely to make a `quick recovery and return,' doctor says
Oscar Munoz, chief executive of United Continental Holdings Inc., is recuperating well from his Wednesday heart transplant surgery and likely to make a quick recovery and a return to his duties, his physicians said.
“The transplanted heart is functioning very well,” Duc Pham, director of the Northwestern Medicine Heart Transplant Program, said in a statement from the airline. Munoz is expected to return at the end of the current quarter or the beginning of the next, the company said.
Munoz, 57, has been on sick leave since suffering a heart attack Oct. 15, and United tapped general counsel Brett Hart to serve as acting chief executive in his absence. While the company made it clear it expects him to resume his duties, United suggested things could change depending on his recovery.
Before falling ill, Munoz had promised to improve customer relations at United. The company has made progress with its workers, including a potential contract extension with its pilots union and a tentative agreement with the Teamsters-represented mechanics.
“We will, of course, be monitoring Oscar’s progress closely and both his and the board’s focus will be on the best interests of our shareholders,” said Henry L. Meyer III, non-executive chairman, said in the statement Thursday.
The company initially disclosed Munoz’s surgery on Wednesday, which caught some investors and analysts off-guard. United earlier had said little about the initial heart attack or Munoz’s recovery, and his surprise visit to United’s operations center in Chicago on Thanksgiving Day led some to believe the incident had been relatively minor.
“We are struck by the the lack of any visible leadership from United in the form of personal appearances or even attributed statements from United’s management,” Gimme Credit analyst Vicki Bryan wrote Thursday in a note before the airline released its update. “United’s serious management issues have been its main problem for years now and it doesn’t need further strains on its already shredded credibility.”
After suffering the heart attack, Munoz had been progressing well with the help of an “implanted medical device,” the company said Thursday. He had begun meeting with Hart and visiting with company employees.
He and his physicians opted to have the transplant, which was considered preferable to relying on the implant. The surgery didn’t represent a setback in his recovery, United said. A United spokeswoman declined to specify what kind of device Munoz had been using.
United, in an unrelated regulatory filing, disclosed terms of Munoz’s employment and his compensation. The contract gives Munoz a base salary of $1.25 million, with a target annual bonus of at least twice his annual salary. The compensation also includes annual long-term incentive awards worth at least $10.5 million and a sign-on bonus including a one-time $5.2 million payment.
The company said it expected to name him board chairman at or before United’s 2017 annual shareholders meeting. Munoz’s predecessor, ousted CEO Jeff Smisek, also held the three roles of chief executive, president and chairman.
Many patients now turn to mechanical devices that can take over for the heart because of advances that have improved their function and a dearth of donor organs, said Allen Taylor, chief of cardiology at the Medstar Heart and Vascular Institute in Washington, D.C. While they work well, their track record is far shorter than transplant, which has been done for three decades.
Some patients use machines called left ventricular assist devices as a temporary measure until a heart becomes available. Others rely on the LVADs, sold by St. Jude Medical Inc. and HeartWare International Inc., as a permanent replacement.
United shares fell 4.7 percent to close at $52.63 in New York amid a broad market retreat, before the update on the CEO’s health.
Munoz became CEO in September after Smisek was ousted amid a federal probe into the airline’s ties with the former chairman of the Port Authority of New York & New Jersey.