United Continental Shareholders Re-elect Board

Fresh from an April settlement with investors that staved off a proxy fight, United Continental Holdings Inc. common shareholders on Wednesday reelected five directors, including two who were chosen to represent the investors and three the airline had named to the board a day before the proxy contest began in early March.

At United's annual meeting Wednesday, a total of 12 directors were re-elected by a majority of the common shareholders, and two others were re-elected to represent labor. As part of the settlement with PAR Capital Management and Altimeter Capital Management LP, which own more than 7% of United's shares, United soon will add a 15th director by mutual agreement.

Oscar Munoz, United's chief executive, said after the annual meeting that the panel will look at board candidates in the coming months. He said he expects that person to be in place by the next board meeting, which is slated for September.

The settlement with PAR and Altimeter also called for new United director Robert Milton, a former CEO of Air Canada, to be named nonexecutive chairman of the airline. The company said the board went to a meeting after the annual assembly to take that step. The settlement also calls for Mr. Munoz to refrain from adding the chairman's role until 2018, not 2017 as previously planned.

Mr. Milton was one of three directors added to United's board in early March after PAR and Altimeter had indicated they planned to take a more active role in United's governance and strategy. The others were James Whitehurst, a former Delta Air Lines Inc. executive who now helms technology firm Red Hat Inc., and James Kennedy, former CEO of T. Rowe Price Group Inc., an investment management firm.

Representing PAR and Altimeter are Barney Harford, former CEO of online travel agency Orbitz Worldwide, and Ed Shapiro, PAR's managing partner, who is taking a temporary break from his investment firm duties to serve on United's board and another board.

At the annual meeting, Mr. Munoz stressed that United has "lots of work to do" to win back its employees and customers, after more than five years of bad blood and bad service plagued the 2010 merger and integration of United Airlines and Continental Airlines. But Mr. Munoz said the ship is being righted and momentum is building for the nation's No. 3 carrier by traffic to finish the integration and build on operational improvements. He said his highest priority is to reach new combined labor contracts with 9,000 mechanics and 24,000 flight attendants.

About 200 employees, mostly flight attendants and mechanics, demonstrated outside United headquarters on Wednesday morning to draw attention to the lack of new contracts. Several of them spoke at the annual meeting, pressing Mr. Munoz to settle new labor agreements. "I hear the whistles and screams and shouting downstairs," the CEO said, pledging his "total commitment" to market-based compensation for the workers and saying "we've got to stop this us vs. them."

The company last week unveiled an ambitious makeover of its international business-class cabins and airport lounges, the first product refresh in more than a decade. In the industry, "we've been docile," Mr. Munoz said of United. "We want to be disruptive." He cited new international routes the company has added, competitive responses to rivals' attempts to grow in its hub airports and improvements to United apps.

The CEO, 57 years old, was plucked from the board last September to lead United after its former chief was ousted. Mr. Munoz weeks later had a heart attack and in January underwent a heart-transplant surgery. He only returned to active duty in March, just in time for the proxy dust-up.

Write to Susan Carey at [e-mail]

(END) Dow Jones Newswires

June 08, 2016 13:45 ET (17:45 GMT)

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