In late 2015, Oscar Munoz was appointed as United’s CEO. Oscar Munoz was universally loved, including by employees and passengers, which is extremely rare. It seemed like he really wanted to change the airline for the better, and he made his motto “actions speak louder than words.”
Unfortunately for Munoz, United has had a really rough time in 2017 and 2018, with seemingly more public relations nightmares than any other airline. On top of that, the airline tried to change the bonus program for employees in a way that created a lot of anger among employees, negating a lot of the goodwill that he has built up.
Last month I wrote a post titled “The Disappointing Tenure Of Oscar Munoz,” which sums up my thoughts on the topic. I actually think Munoz is a good guy, I just don’t think the board ever intended for him to really lead the company, or else they wouldn’t have appointed Scott Kirby as president shortly thereafter. Scott Kirby is a bean counter, and his strategy is very different than that of Munoz.
I do have to give Munoz a lot of credit for something that has just been revealed in an SEC filing — Oscar Munoz will be turning down his bonus for 2017. He wrote a letter to employees on Monday in which he said the following:
“I felt it was important to send a message about the culture of accountability and integrity that we are building here as a United team. We had some incredible successes in 2017 but also some setbacks.”
I obviously have to commend Munoz for this move, since there are tons of airline executives who would never turn down a bonus. Ever.
However, I do think it’s worth acknowledging that he wasn’t exactly working for free. His 2017 compensation ended up totaling $9,561,134 without the bonus he turned down, which says a lot about executive compensation in the US. That’s still significantly less than the $18,720,548 he made in 2016.
As a point of comparison, United president Scott Kirby made $6,107,618 in 2017, compared to $7,163,015 in 2016. For Kirby, under one million dollars of that was part of the non-equity incentive plan, which is what Oscar Munoz turned down. In 2016, Oscar Munoz’s non-equity incentive plan totaled $3.5 million, so it was only about 20% of his total compensation.
Bottom line
We have to give Oscar Munoz credit for turning down a bonus, since that’s something a lot of executives would have never done. However, in reality he still made nearly $10 million, so I’m not necessarily sure how relatable his message of accountability is to employees.
What do you make of Oscar Munoz turning down his 2017 bonus?
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