United Continental Holdings late Monday named its general counsel as acting CEO while Oscar Munoz recovers from a heart attack suffered last week.
Brett J. Hart, 46, a United vice president and general counsel, has been responsible for government and regulatory affairs, corporate real estate, customer experience, corporate security, community affairs, contact centers and food services, United said.
Munoz, 56, is on medical leave. United gave no timetable for his return.
United said Hart will work closely with Henry L. Meyer III, non-executive chairman of the board, and the airline’s executive team to run the company in Munoz’s absence.
"Brett has taken on increasing responsibility beyond general counsel over the last few years in the operations and customer facing areas of the company," Meyer said in a statement. "I am confident in his ability to continue to implement the company’s strategy and Oscar’s mission of bringing United’s people together around the shared purpose of becoming the best airline for our customers and employees."
Hart was raised in Cassopolis, Mich., a small town in southwest part of the state where he worked during high school summer breaks in construction with his contractor father, according to an article from the May 2000 issue of "Diversity & the Bar."
Before joining United in 2010, Hart served as executive vice president, general counsel and corporate secretary at Sara Lee, was a partner at Sonnenschein Nath & Rosenthal, and special assistant to the general counsel at the U.S. Department of Treasury.
Hart has a bachelor of arts degree in philosophy and English from the University of Michigan and a law degree from the University of Chicago Law School.
In a statement Monday, Hart supported Munoz’s agenda "focused on customer service, teamwork and innovation and I, along with the executive team, will continue to move quickly to implement it."
"We will not only continue to listen to your feedback, but in the coming days we will be announcing some of the changes that have come from your feedback," Hart wrote in a post Monday evening on United’s new site, unitedairtime.com, aimed at interacting with passengers and employees.
Hart closed his note: "We know what we have to do and we can’t stop now."
United, perhaps pushing back against criticism that it didn’t seem to have a succession plan in place, said its board of directors "remains actively engaged in preparing for all potential outcomes regarding the company’s leadership structure."
Bloomberg News had earlier reported that United’s board of directors was at an impasse Friday about whether to appoint an interim CEO or begin looking for a new one, citing an unnamed source. It said the board was "stymied by a lack of information" about Munoz’s condition.
The move from United’s board of directors was a dicey one for several reasons, which could in part explain its delay, said Nicholas Pearce, a management and organizations professor at the Kellogg School of Management at Northwestern University.
First, the board was balancing the need for public disclosure of more information to employees and the investor community against the rights to privacy of Munoz and his family, Pearce said.
"While he is an executive and has a responsibility to the company, employees, customers and shareholders, he also has some rights to personhood," Pearce said.
And the board was being careful about the signals it’s sending, not only to the public and employees but to senior executives who were already passed over once for the CEO job last month, when Munoz, a longtime board member, was named to the position.
The decision to appoint Hart acting CEO could affect the morale and culture of United Airlines.
"This is not just about who’s going to navigate the organization until Mr. Munoz can return, if and when he can return, but this is about what are we saying to our people, who have been the backbone of the airline for years," Northwestern’s Pearce said.
The episode highlights the apparent fact that United did not have a solid succession plan for temporary or permanent absences of the CEO, even one who had been on the job for just 41 days. Munoz was so new to the job that his compensation package hadn’t been filed with Securities and Exchange Commission.
At least one industry watcher said United’s lack of communication is becoming a problem, Vicki Bryan, a senior bond analyst at Gimme Credit, wrote in a note to clients on Monday. She rates United as "underperform."
The absence of Munoz comes as United is due to report quarterly earnings Thursday, one of the regular appearances for the airline’s CEO and what would have been the first for Munoz since his appointment in September.
The news about Munoz is the second shock in six weeks for United, Chicago’s largest private employer and the world’s second-largest airline. Munoz has been on the job for about a month, since the unexpected Sept. 8 ouster of former CEO Jeff Smisek that was linked to ongoing internal and federal probes associated with the Port Authority of New York and New Jersey.
After moving last month from a seat on United’s board to the company’s executive offices, Munoz quickly got to work on public relations, trying to repair a reputation that has been sullied by the problematic integration of a merged United and Continental that started five years ago.
The question of when to reveal the medical condition of a CEO has played out numerous times, perhaps most notably with late Apple CEO and founder Steve Jobs. He told employees in 2004 that he had surgery for pancreatic cancer, but only after he had already taken a medical leave. Looking gaunt, Jobs took another unexplained medical leave in 2009, returning to work several months later after a liver transplant. Jobs announced his final medical leave in January 2011, requesting privacy in a memo to employees. He stepped down as CEO in August of that year, and died of pancreatic cancer two months later.
Shares of United, after dipping about 3 percent on Friday after the news, closed Monday up 1.4 percent.
Chicago Tribune’s Robert Channick contributed.
gkarp@tribpub.com
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