United remains silent on medical condition of airline CEO
United Continental Holdings Inc (UAL.N) remained silent on the medical condition of its new chief executive officer, who was admitted to the hospital Thursday, prompting questions from observers about who will lead the company in his absence.
The airline said Friday that Oscar Munoz had been admitted to a hospital without providing further details. A source familiar with situation told Reuters the 56-year-old had suffered a heart attack.
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However, as of Sunday night, United had declined to provide any updates about Munoz' health or state who will handle his responsibilities.
"We need to know who is speaking on the behalf of the company and who is accountable for the decisions of this great airline," said Jeffrey Sonnenfeld, a corporate governance expert and a professor at the Yale School of Management.
While United might be waiting to provide comment out of respect for Munoz' privacy, the company also has an obligation to shareholders, Sonnenfeld said.
"Munoz is entitled to his privacy if he doesn't want to be CEO," he said.
Munoz' health problems come barely a month after Munoz took on the job of improving the profitability and reputation of United, the No. 2 U.S. carrier by capacity.
Munoz and his family could not be reached for comment. It is not known where Munoz is being treated.
United's shares closed down 3.1 percent after the news, at a one-week low of $55.97. They have dropped nearly 17 percent this year.
United acknowledged in a short statement on Friday that Munoz's family informed the company he had been hospitalized the day before, and said it would provide "further details as appropriate."
United has an obligation to disclose material developments, wrote John Coffee, a professor specializing in corporate governance issues at Columbia University's law school, in an email. "It is the obligation of the company to keep the market informed of material developments and this seems clearly material to me," Coffee wrote.
It is puzzling why the company has not stated who will take over for Munoz in the meantime, said Greg Taxin, chief investment officer of New York-based Luma Asset Management, and founder of corporate governance research firm Glass, Lewis & Co.
"It's probably silly or foolish that they just haven't satisfied people's desire to know how the chain of command is working," Taxin said. "On the other hand, I presume the CEO of United Airlines goes on vacation on a regular basis, and he's not around to answer question or make decision and things run just fine.
United is the latest in a string of publicly traded companies that have been caught in the spotlight after their CEO falls ill.
Most notably, Apple Inc (AAPL.O) kept co-founder Steve Jobs' health issues under wraps for years, even when Jobs took medical leave. Jobs died in 2011 of pancreatic cancer.
Walter Isaacson, who wrote Jobs' authorized biography, is on United's board.
Just last month, Goldman Sachs Group Inc (GS.N) CEO Lloyd Blankfein disclosed that he had been diagnosed with lymphoma. He informed the board of directors the day he received the diagnosis, and disclosed it publicly the following day.
Similarly JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon disclosed that he had been diagnosed with throat cancer in July 2014 shortly after receiving the news and he updated shareholders periodically during his treatment. In December, he disclosed that test results showed he was cancer-free.
United's previous chief executive left while federal authorities were conducting an investigation involving the Port Authority of New York and New Jersey.
Since joining the company last month, Munoz had made it a priority to tackle complaints by customers and employees of United Continental in recent years, often related to the company's struggles to merge the operations of the former United and Continental airlines.
Prior to joining United Airlines, Munoz served as president and chief operating officer of CSX Corp (CSX.N), a Jacksonville, Florida-based transportation company.