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Free Flights for Life and $28 Million: What a Federal Corruption Probe Gets a CEO

Former United Airlines CEO Jeff Smisek is leaving with free health insurance and a company car and parking for life, in addition to $21 million in cash and stock, amid bribery allegations.

by Reuters and VICE News
Sep 16 2015, 3:40pm

Photo by Manuel Balce Ceneta/AP

The top dog of United Airlines and its parent company, United Continental Holdings, will retire with a package sweeter than the one offered to even the US president, despite the airline CEO stepping down amid a federal corruption probe.

While the leader of the free world will retire next year with more than $201,000 a year among other benefits, the embattled outgoing boss of one of the largest airlines in the world, Jeff Smisek, will be able to travel on free flights in perpetuity, on top of exiting with a cool $21 million in cash and stock.

Yet should he choose to travel by the company car he'll be given access to, Smisek will also get free parking anywhere in downtown Chicago, and at Chicago and Houston airports, as well as a host of other benefits such as health insurance. All perks included, the airline chief executive could snag a severance package worth up to $28.6 million, according to Bloomberg estimates.

Related: Is the Government Pursuit of Wall Street Criminals Too Little Too Late?

Smisek's departure was announced last week along with the retirements of United Continental's executive vice president of communications and government affairs, Irene Foxhall, and its senior vice president of corporate and government affairs, Mark Anderson.

"The departures announced today are in connection with the company's previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey," United Continental Holdings Inc said in a statement last week. "The investigations are ongoing and the company continues to cooperate with the government."

After the announcement, United Continental shares dropped 2.8 percent in after-hours trading.

The airline also launched its own internal investigation into the carrier's relationship with David Samson, a former chairman of the Port Authority of New York and New Jersey in February after the federal government began its inquiry. Media reports have said the government probe focuses on whether United added direct flights to Columbia, South Carolina, from Newark to accommodate Samson, who had a home there.

Samson retired in early 2014 after the government began investigating a potential conflict of interest between his private law firm and his role as the port authority's chairman. The airline route was cancelled shortly thereafter.

Related: The UN's Unpaid Internships Are Screwing Young People From the Developing World

Some workers are taking issue with the large sum Smisek is walking away with.

"From the worker's perspective, it's obviously a different mentality," Molly Sheerer, a spokeswoman for Association of Flight Attendants, which is currently negotiating contracts for United workers, told The Washington Post. "We believe there's something wrong when an executive is awarded over $25 million for failing to do his job."

The severance package is sealed in a pre-made agreement, unless Smisek is actually convicted of a felony or a "crime involving moral turpitude," in which case United has — at its discretion — the right to invalidate the terms.

Reuters contributed to this report

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