United Continental Holdings faces a battle with disgruntled shareholders over the direction of the company just as its CEO returns from a five-month absence during which he received a heart transplant.
In a surprise move Tuesday morning, saying they are fed up with poor performance at United Continental Holdings, two investment firms, Altimeter Capital Management and PAR Capital Management, want to shake up the airline's board of directors.
Brad Gerstner, CEO of Altimeter Capital, said in a statement that investors are "greatly disappointed with United's poor performance and bad decisions over the last several years." The firms' announcement comes one day after United increased its existing board by three members to 15, a move Gerstner called "a cynical attempt to preserve power by this entrenched board." The two investment firms own a combined 7.1 percent stake of United Continental Holdings Inc.
The two activist investor groups said they are proposing six new members to be added to United's Board of Directors and give a prominent role to the ex-CEO , Gordon Bethune .
Gordon Bethune, who served as CEO of Continental Airlines from 1994 to 2004 was credited with turning that troubled airline into one of the country's leading carriers more than a decade ago.
In addition to Bethune, Altimeter and PAR are proposing as United Board members Altimeter CEO Brad Gerstner; former Orbitz Worldwide CEOBarney Harford; former Delphi Automotive CEO Rodney O'Neal; SherpaFoundry CEO Tina Sharkey; and Brenda Yester Baty, now head of strategic initiatives at homebuilder Lennar Corp. but previously an executive in the cruise line industry.
Chief Executive Officer Oscar Munoz said employees should avoid being distracted by the board changes. "This situation shouldn't change your focus," he said in an email to employees.
Bethune, 74, said the fight was "not about Mr. Munoz."
"It's about ... having someone who actually understands the airline business on the board," Bethune said in CNBC interview Tuesday. He noted that the investors insisted he stand for election as United's chairman, and that he would only stay two years, if appointed.
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