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United faces shareholder revolt as CEO returns
[NEW YORK] A pair of large shareholders in United Continental accused the US airline's board on Tuesday of doing too little to improve performance and announced plans to launch a proxy battle.
Altimeter Capital Management and PAR Capital Management, which together hold 7.1 per cent of United shares, proposed a slate of six board candidates, including former Continental Airlines chief executive Gordon Bethune.
The campaign comes just days before chief executive Oscar Munoz returns to work full-time after suffering a heart attack in October.
The move was needed to address "long-term underperformance" at United Continental, parent of United Airlines, one of the three largest US airlines, the shareholders said.
The lagging performance "directly results from an underqualified, ineffective, complacent and entrenched board," Altimeter and PAR said in a letter to United Continental Chairman Henry Meyer.
The shareholders criticised a move by United on Monday to appoint three new directors and plans for a fourth new board member as a "desperate" gesture "to maintain your official privileges and power." "When exactly did you determine that the board was so inadequate as to need four new directors, all at once, and without an annual meeting or a stockholder vote?"
But Mr Meyer said the shareholder campaign ignored efforts by the board to engage the investors and that PAR and Altimeter had refused to make its board nominees available to be interviewed.
"PAR and Altimeter have unilaterally taken this hostile action with no concern that a proxy fight could distract the company from executing on Oscar's strategic plan," Mr Meyer said.
On Sunday, United said Mr Munoz was participating in "all major corporate decisions" through meetings with workers and shareholders and would return to work full-time on March 14. US media have said Mr Munoz had a heart transplant.
United Continental shares were down 1.2 per cent at US$56.95 at midday.