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United Airlines CEO Makes the Ultimate Sacrifice For the Airline’s Woes (Some United Employees Laugh)

What’s the right response for the leader of America’s, well, slightly less-loved airline?

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BY Chris Matyszczyk - 25 Apr 2018

United Airlines CEO Makes the Ultimate Sacrifice For the Airline's Woes (Some United Employees Laugh)

PHOTO CREDIT: Getty Images

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.

 

Someone had to pay a price, right?

After all, United Airlines had a troubling year -- no, not financially, just image-wise -- after Dr. David Dao was dragged bloodied off a flight last April.

Then there was the problem with dying dogs and flying dogs going to the wrong destinations.

Oh, and finally the absurd new bonus scheme that sought to, well, not give most employees a bonus.

Actually, talking of bonuses, the airline's CEO Oscar Muoz has made a gesture with respect to his own.

He's asked for it not to be paid.

"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," he told employees in a letter that was passed to me.

It's commendable, of course. At first glance, that is.

Indeed, as one United employee caustically told me: "Management wasn't going to give us the choice of giving up our bonuses. It was just going to take them away." (Ultimately, the lottery bonus scheme was shelved for good.)

Another offered: "Do we know how much he really gave up?"

SEC filings show that Muoz was paid $9.56 million last year, which was around half what he was paid in 2016.

When leaders make these sorts of gestures, it's inevitable that some will carp.

They'll say that senior executives are so rich anyway that losing a few million here and there won't make a difference. (Unless, perhaps they have major beach projects going on.)

Muoz was by far the highest paid CEO among the big 4 airlines in 2016.

He was paid $18.7 million, while Delta CEO Ed Bastian managed a mere $12.6.

American Airlines CEO Doug Parker got a mere $11.1 million -- but he says he likes it that way.

As for Southwest CEO Gary Kelly, how does he make ends meet? He was paid a veritable pittance of $7.6 million in 2017.

Of course, all these bosses benefit from stock holdings that never make them feel they're living life in Economy Class.

Among the United employees I've talked to, Muoz is a far more popular executive that the airline's president, Scott Kirby.

But does his gesture really mean anything?

"Even when they get fired, these people make a lot of money," one United employee told me.

Well, yes.

But doesn't Muoz's sacrifice at least show that he understands his own failings in the previous year?

After all, when Dao was first dragged off the plane, Muoz suggested it was Dao's fault.

By giving up his bonus, isn't it a small mea culpa?

What else could he have done? Other than resign, of course.

I wonder how many passengers will even notice.

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