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United CEO suffers heart attack, shares drop even lower
[NEW YORK] United Continental Holdings Inc's new chief executive has suffered a heart attack, a person familiar with the matter said on Friday, barely a month after he took on the job of improving the airline's profitability and reputation.
The board at United - the No. 2 US carrier by capacity - was informed "promptly" after Oscar Munoz was taken to hospital, the person said. "There's no reason for the board to meet," the person said."We're still gathering information about his medical condition and prognosis." United's previous chief executive left while federal authorities were conducting an investigation involving the Port Authority of New York and New Jersey.
United's shares closed down 3.1 per cent, at a one-week low of US$55.97. They have dropped nearly 17 per cent this year.
In a statement on Friday, the airline said Mr Munoz, 56, had been taken to hospital on Thursday. It gave no further details. "Our thoughts and prayers are with his family and we are respecting their privacy," it said, noting that the airline was operating normally.
United Continental has been plagued by complaints by customers and employees in recent years, many related to its struggles to merge the operations of the former United and Continental airlines.
Mr Munoz has made tackling those problems a top priority.
Shortly after taking over, Mr Munoz told employees in a letter that he would meet with as many workers as possible and "hear about operations directly from you".
Mr Munoz had been scheduled to hold a labor summit with union leaders on Thursday. Mike Klemm, head of the local branch of the International Association of Machinists, said he was informed midday Thursday that it had been postponed. "They told us he had a personal emergency," he said. "We wish Mr. Mr Munoz a speedy recovery and look forward to getting back to work with him." The Wall Street Journal, which broke the story, reported that the board was waiting to hear from doctors and Mr Munoz's family about the severity of the heart attack before deciding if the appointment of an interim CEO was necessary.
A spokeswoman for United declined to comment on whether Mr Munoz had suffered a heart attack, his condition and whether the board had been informed that he had been taken to hospital.
United's failure to promptly announce Mr Munoz's admission to a hospital or the reason for it raised concerns about whether the company was disclosing enough to investors. "It is tragic but true that the health of the CEO is not a private matter," said Jeffrey Sonnenfeld, a corporate governance expert and professor at the Yale School of Management. "When someone assumes this responsibility, they surrender some of the everyday rights of others," he said. "The CEO's health is financially material information and has a huge impact on all key constituencies from investors, media, and employees to customers, suppliers, and regulators." Many companies, including Apple Inc and Goldman Sachs Group Inc, have grappled in recent years with how to balance executives' desire for privacy with investors' need to know the state of their health.
The Wall Street Journal cited an "informed individual" as saying the heart attack may have been mild and that Mr Munoz could be back at work in two weeks.
Regulation on the timing of such disclosures and how much detail is required from companies and is not entirely transparent.