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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )
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Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
United Airlines Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
 
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION—DATED APRIL 2, 2021
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Notice of 2021 Annual Meeting of Stockholders
Date and Time
Wednesday, May 26, 2021
9:00 a.m., Central Time
Location
Our Annual Meeting can be accessed virtually at: www.virtualshareholdermeeting.com/UAL2021
Record Date
April 7, 2021
At the meeting, stockholders will be asked to:
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Elect the directors named in this proxy statement
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Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2021
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Consider an advisory vote to approve the compensation of the Company’s named executive officers
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Approve the United Airlines Holdings, Inc. 2021 Incentive Compensation Plan
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Approve and adopt an amendment and restatement of the Company’s certificate of incorporation to preserve certain tax benefits
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Approve the Company’s Tax Benefits Preservation Plan
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Act on two stockholder proposals, if properly presented before the meeting
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Act on any other matters that may be properly brought before the meeting
[signature]
E. Anna Ha
Assistant General Counsel and Corporate Secretary
Chicago, Illinois
April [•], 2021
Proxy Voting
Even if you plan to attend the virtual Annual Meeting, please authorize your proxy or direct your vote as promptly as possible. You may vote your shares by Internet, telephone or mail pursuant to the instructions included on the proxy card or voting instruction card. The Notice of Internet Availability of Proxy Materials includes instructions for voting over the Internet and requesting a paper copy of the proxy materials and proxy card. If you attend the Annual Meeting virtually and want to revoke your proxy, you may do so as described in the attached proxy statement and vote during the Annual Meeting on all matters properly brought before the Annual Meeting.
You can find detailed information about voting in the section entitled “General Information About the Annual Meeting” in the attached proxy statement.
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Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 26, 2021. The Company’s Notice of Annual Meeting, Proxy Statement and 2020 Annual Report to Stockholders are available on the Internet at www.proxyvote.com.

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION—DATED APRIL 2, 2021
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April [•], 2021
Dear Stockholder:
At the start of 2020, our United team was focused on leveraging the momentum we generated in 2019 by growing at our mid-continent hubs, significantly improving the customer experience and putting ourselves on a path towards becoming the best airline in the world.
Then the COVID-19 virus emerged and ultimately presented the most disruptive financial crisis in the history of commercial aviation. By April 2020, the world essentially shut down, and our revenues plummeted 99%.
Since the beginning of the crisis, the hallmarks of United’s response have been to maintain an objective and realistic assessment of the virus’s impact on our industry—and to plan accordingly. Hope was never our strategy. Instead, the best collection of airline professionals in the business confronted the crisis head-on and focused on three pillars that were critical to our ability to survive the crisis: 1) raise and maintain liquidity, 2) reduce cash burn and 3) variabilize our cost structure.
Our primary goal throughout the crisis was to protect the safety of United’s customers and employees. We also managed the crisis aggressively to ensure the airline—and the jobs it supports—was here when customers began flying again. So, in pursuit of both objectives, we got to work on several industry-leading actions including:

Leading on safety and cleaning, including becoming the first airline to mandate masks on board, our industry leading CleanPlusSM partnership with Cleveland Clinic and Clorox and many other initiatives;

Cutting costs and reducing cash burn, including becoming the first airline to announce the elimination of CEO and President base salaries, and later cutting officers’ salaries in half;

Using innovative approaches to raise over $26.0 billion in liquidity in 2020;

Pushing ahead with opportunistic commercial initiatives such as our cargo operations, new route announcements and being the first legacy airline to permanently eliminate change fees on domestic tickets;

Despite the crisis, continuing to invest in industry-first digital capabilities like Search by Map, Travel Destination Guides, virtual agent and more; and

Entering into an industry-leading deal with our pilots.
Those efforts are part of the reason why United was able to turn the page away from just surviving to squarely focusing on preparing for the rebound. So, as we focus on our recovery, instead of trying to “return to normal,” we are focused on a “return to new” mindset that means making meaningful changes that will put us in a position to emerge from the crisis as a new, stronger United Airlines. Our plan includes several areas of focus:

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Truly change how customers feel about United—During the crisis, we doubled-down on customer service, led the industry in cleaning and safety, and permanently got rid of change fees—and our customer satisfaction scores went up by 30 points. We will continue this focus into 2021 and beyond and do things that make United the airline people want to fly.

Lead on environmental sustainability—Our 100% Green by 2050 commitment is unique because we plan to accomplish this without relying on traditional carbon offsets, not only putting United in a leadership position among other airlines, but setting us apart from other big businesses around the world. Fighting climate change is a global challenge that requires big thinking and bold action, and United will not use greenwashing to achieve “net zero.”

Advance Diversity, Equity and Inclusion—United is committed to building a more diverse, equitable and inclusive workplace and world. In 2020, we increased transparency and accountability by sharing diversity representation data with our employees, announcing that we have achieved and are committed to maintaining near perfect pay equity for employees of all genders and races performing comparable work across our U.S. operations. Moving forward, you will see even more substantive actions from us focused on our suppliers, the communities we serve and the way we attract and grow talent as we seek to become the world’s most inclusive airline.

Make innovation a hallmark of our future—We believe we have the best and fastest digital team of any airline in the world, and based on the technology changes we have already made to help our customers and employees navigate the crisis, there is no doubt in our minds that United has flown past the rest of the industry. We are committed to continuing to invest and innovate for our customers.

Restore our balance sheet by maintaining liquidity, reducing debt and unencumbering assets—Given the amount of debt we have taken on, it will take time to restore the balance sheet, and we will have to be thoughtful when it comes to paying down debt versus making investments.

Permanently reduce our cost structure by $2.0 billion per year—To be clear, this is not about taking things away from our employees or customers. We have learned how to run a smarter, more efficient operation and developed some really good habits regarding cost discipline. We will carry those learnings into our post-crisis future.
COVID-19 changed our airline forever. And I am confident that the culture that served us well getting through the crisis is the same culture that will help us push through the recovery and accelerate on the other side as United gets back on track to becoming the global leader in aviation.
Thank you for your continued support of United.
Sincerely,
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Scott Kirby
Chief Executive Officer

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION—DATED APRIL 2, 2021
Proxy Statement Summary
This summary highlights certain information provided by United Airlines Holdings, Inc. (the “Company,” “United,” “we,” “our” or “us”) in this proxy statement. This summary does not contain all of the information that you should consider, and you should read this proxy statement and our 2020 Annual Report carefully before voting. This proxy statement and the accompanying proxy card are being made available to you on or around April [•], 2021.
2021 Annual Meeting of Stockholders Information
Date and Time:
Wednesday, May 26, 2021, at 9:00 a.m., Central Time
Location*:
The Company's 2021 annual meeting of stockholders (the “Annual Meeting”) can be accessed virtually via the Internet at: www.virtualshareholdermeeting.com/UAL2021
 
The Board of Directors of the Company (the “Board”) invites you to participate in the virtual Annual Meeting. To participate in the virtual Annual Meeting, you will need the control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. If you are not a stockholder or do not have a control number, you may still access the meeting as a guest, but you will not be able to submit questions or vote at the meeting.
Record Date:
April 7, 2021
* In light of the coronavirus (“COVID-19”) pandemic, for the safety of all of our people, including our stockholders, we have determined that the 2021 Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. At our virtual Annual Meeting, stockholders will be able to attend, vote and submit questions. Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described in these proxy materials. Additional information can be found under “General Information About the Annual Meeting.”
Voting Matters
Proposals
Board
Recommendation
Page Number for
Additional
Information
1.
Election of directors named in this proxy statement
FOR each of the
nominees
10
2.
Ratification of the appointment of the independent registered public accounting firm for 2021
FOR
96
3.
Advisory vote to approve the compensation of the Company’s named executive officers
FOR
99
4.
Approve the United Airlines Holdings, Inc. 2021 Incentive Compensation Plan
FOR
103
5.
Approve and adopt an amendment and restatement of the Company’s certificate of incorporation to preserve certain tax benefits
FOR
115
6.
Approve the Company’s Tax Benefits Preservation Plan
FOR
121
7.
Stockholder proposal regarding disclosure of political spending
AGAINST
125
8.
Stockholder proposal regarding a report on climate-related lobbying activities
AGAINST
128
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Company Highlights
Selected highlights of our financial and operational results in 2020 are provided below:

Since the beginning of the COVID-19 crisis, through year-end 2020, raised over $26.0 billion in liquidity and ended 2020 with $19.7 billion in available liquidity(1), including undrawn revolver capacity and funds available under the Coronavirus, Aid, Relief, and Economic Security Act (“CARES Act”) loan program from the United States Department of the Treasury (“U.S. Treasury”)

Completed $3.0 billion Enhanced Equipment Trust Certificate (EETC) transaction; the largest deal of this type in aviation history

First U.S. airline to leverage its loyalty program, MileagePlus®, as collateral for a $6.8 billion loan

First airline to safely transport the first delivery of Pfizer and BioNTech’s COVID-19 vaccine into the U.S.

Through a combination of cargo-only flights and passenger flights, United has transported more than 401 million pounds of freight, which includes 87 million pounds of vital shipments, such as COVID-19 vaccines, medical kits, personal protective equipment, pharmaceuticals, and medical equipment, and more than 3.4 million pounds of military mail and packages

Reduced core cash burn(2) from $38.0 million in the second quarter of 2020 to $19.0 million by the end of the fourth quarter of 2020

Only airline to work with the Defense Advanced Research Projects Agency (DARPA), U.S. Transportation Command (USTRANSCOM) and Air Mobility Command (AMC) to study how effectively the unique airflow configuration on board an aircraft can prevent the spread of aerosolized particles among passengers and crew

Launched United CleanPlusSM to reinforce the Company’s commitment to putting health and safety at the forefront of the entire customer experience, with the goal of delivering an industry-leading standard of cleanliness, including partnerships with Clorox and experts from the Cleveland Clinic
(1)
Total available liquidity includes $11.7 billion in cash, cash equivalents and short-term investments and $1 billion available under our revolving credit facility, as well as $7 billion available under the CARES Act Loan program.
(2)
Cash burn is defined as: Net cash from operations, less investing and financing activities. Proceeds from the issuance of new debt (excluding expected aircraft financing), government grants associated with the Payroll Support Program of the CARES Act, issuance of new stock, net proceeds from the sale of short-term and other investments and changes in certain restricted cash balances are not included in this figure. Core cash burn is defined as: Cash burn, as further adjusted to exclude: debt principal payments, timing of certain payments , capital expenditures (net of flight equipment purchase deposit returns), investments in the recovery and severance payments. See Appendix A for more information regarding core cash burn.
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Identified $1.4 billion of annual cost savings, with a path to achieve at least $2.0 billion in structural reductions moving forward

Announced signing of “The Board Challenge” and committed to adding a second Black board member to the Board of Directors, which we did in February 2021

Recognized for the fifth consecutive year as a top-scoring company and best place to work for disability inclusion with a perfect score of 100 on the 2020 Disability Equality Index (DEI), and received a perfect score of 100%, for the ninth consecutive year, on the 2020 Corporate Equality Index, a premier benchmarking survey and report on corporate policies and practices related to LGBTQ+ workplace equality, administered by the Human Rights Campaign Foundation

Began working with the Centers for Disease Control (CDC) on the first contact tracing initiative for all international and domestic flights

Pledged to be 100% green by reducing greenhouse gas emissions 100% by 2050 without relying on traditional carbon offsets and by investing in innovative technologies like Direct Carbon Capture
Corporate Governance Highlights
Highlights of our corporate governance practices include:
Corporate Governance (See “Corporate Governance” on page 19)

Directors are elected annually

Strong independent Board leadership, with lead independent director

Majority voting standard for directors in uncontested elections

The bylaws grant eligible stockholders the right to include stockholder nominees to the Board in the Company’s proxy materials (proxy access)

Stockholders have the right to call a special meeting

No supermajority provisions in charter or bylaws

Members of the Company’s Board and its executive officers are not permitted to hedge
our securities or to pledge our securities as collateral for a loan

Annual Board and committee evaluations
Executive Compensation Governance (See “Executive Compensation” on page 37)

Emphasize pay-for-performance alignment

Majority of total compensation based on performance

Independent compensation consultant

Compensation claw-back policy

Stock ownership requirements for executive officers (temporarily suspended by the Board in response to the COVID-19 pandemic)

Annual say-on-pay vote
Environmental Sustainability
United is committed to sustainable travel as part of its long-term strategy and strives to minimize its environmental impact. In 2020, United was the only airline globally listed on the Carbon Disclosure Project’s 2020 Climate ‘A List’ for its strategy and actions to reduce the company’s environmental impact, marking the seventh consecutive year that United led the U.S. airline industry in this assessment. The Company continuously looks for ways to reduce its environmental footprint, with efforts focused on (i) the development and use of
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sustainable fuel sources, (ii) carbon capture and sequestration, (iii) innovating for the future, (iv) aircraft modernization and operational efficiency and (v) environmental partners.
Pledge to Reduce Greenhouse Gas Emissions 100% by 2050.    In December 2020, the Company pledged to become 100% green by reducing its greenhouse gas (GHG) emissions by 100% by 2050. In connection with the pledge, the Company disclosed that it has committed to make a multimillion-dollar investment in an atmospheric carbon capture technology known as “Direct Air Capture,” in addition to continuing to invest in the development and use of sustainable aviation fuel.
Sustainable fuel sources.   Sustainable fuel is made from renewable resources and waste byproducts. It has up to 80% fewer carbon emissions than conventional jet fuel. United is working with strategic partners to generate sustainable aviation fuel to enable the Company to reduce its emissions and provide energy diversification. The Company uses sustainable aviation fuel from World Energy in its daily operations at Los Angeles International Airport and has sourced more than four million gallons of sustainable aviation fuel since 2016. Additionally, in 2019, the Company renewed its contract with World Energy with the option to purchase up to 10 million gallons of sustainable aviation fuel through May 2021. In 2015, the Company made a $30 million equity investment in Fulcrum BioEnergy, Inc. (“Fulcrum”), a company that has developed a process for transforming municipal solid waste into low carbon transportation fuels, and entered into a long-term supply agreement with Fulcrum which provides United with the opportunity to purchase at least 90 million gallons of sustainable aviation fuel a year for a minimum of 10 years from Fulcrum, subject to availability.
Direct Air Capture.   Carbon capture and sequestration has been widely viewed by scientists as a necessary step to limit climate change. In December 2020, the Company announced that it intends to make a multimillion-dollar investment in a startup company that will help fund the first Direct Air Capture plant in the United States. A single Direct Air Capture plant is expected to capture, remove and store one million metric tons of CO2 which is like the work of 40 million trees in removing CO2 from our atmosphere but within a much smaller land area.
Electric aircraft.   In February 2021, United announced an agreement with Archer Aviation as part of our broader effort to invest in emerging technologies that decarbonize air travel. United estimates that using Archer’s electric vertical takeoff and landing (eVTOL) aircraft could reduce CO2 emissions by 47% per passenger on a trip between Hollywood and Los Angeles International Airport, in one of Archer’s planned launch cities. Under the terms of the agreement, once Archer’s aircraft are in operation and have met United’s requirements, United may acquire a fleet of up to 200 electric aircraft that would be operated by a partner airline and provide customers a low-carbon way to get to United’s hub airports and commute in dense urban environments.
Aircraft modernization and operational efficiency.   Improving fuel efficiency is critical to the Company’s ability to manage its carbon footprint. Since 1990, the Company has improved its fuel efficiency by more than 45 percent. We have also made significant investments in a modern, fuel-efficient fleet while implementing operational and procedural changes to drive fuel conservation. For example, over 4,000 units of the Company’s ground service equipment around the world are electric or use alternative fuels. United also has Leadership in Energy and Environmental Design (LEED) certified buildings in Chicago, Houston and San Francisco and continues to evaluate ways to reduce its non-fuel energy use at other facilities in the Company’s network.
Environmental partners.   United partners with its employees, customers, airports, suppliers and governmental organizations to advance its sustainability efforts and protect the environment. For example, United has worked with Conservation International since 1998 as part of its Business & Sustainability Council, a community of companies committed to leveraging their business experiences and resources to protect nature for the benefit of humanity. In addition, together with Audubon International and the Port Authority of New York and New Jersey, United launched the Raptor Relocation Program to protect kestrels, hawks, owls and other birds in and around New York-area airports and resettle them to more suitable habitats. In 2019, the Company and Audubon International expanded this program to San Francisco International Airport.
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Additional information on United’s commitment to environmental sustainability is available at united.com/100green. We are not incorporating by reference into this proxy statement the information on this website.
Diversity, Equity and Inclusion
As a global airline driven by purpose and values, we are in the business of bringing people together, and our commitment to doing our part to create a more diverse, equitable and inclusive workplace and world is critical to that purpose. Our approach to diversity, equity and inclusion (“DEI”) is key to a strong United culture and a critical competitive advantage. Over the past decade, our focus has evolved from excellence in employee engagement and talent programs to a strategic approach that embeds diversity, equity and inclusion throughout our business and goes even further to impact the communities where we work, live and fly.
In 2020, we enhanced executive leadership of our DEI strategy by creating the Executive Council on DEI, chaired by our President, Brett Hart, with full participation by our executive team. We also created “We Stand United” an officer-led collaborative action team to build and implement a system-wide DEI strategy focused on employees, customers, communities and commercial partners as we grow and strengthen relationships with those diverse stakeholders. We also announced our signing of “The Board Challenge” and committed to adding a second Black director to our Board of Directors, which we did in February 2021 appointing Laysha Ward to our Board of Directors.
Here are our commitments and some examples of recent actions on behalf of each of our stakeholders:
Employees.   United is committed to creating a workplace where all employees feel included and empowered to make a measurable difference in our success. We offer policies, programs, benefits, training and recognition designed to reward and support the success of our diverse workforce, and we seek to attract, retain and develop diverse leaders.

Committed to transparency and accountability by sharing diversity representation data with our employees, announcing that we have achieved and are committed to maintaining near perfect pay equity for employees of all genders and races performing comparable work across our U.S. operations

Launched multiple initiatives focused on growing our inclusive culture, including trainings, mentoring and sponsorship programs and holding a series of listening sessions and conversations with employees

Leveraged our employee-run Business Resource Groups (BRGs), which are strategic vehicles to amplify our employees’ voices and create platforms for service, learnings, leadership development and challenging inequities

We currently have seven BRGs in 12 global locations, with 30 chapters and over 24,000 employee participants. Each group provides inclusive workplace support for its target demographic, increases awareness and understanding and provides business contributions that reflect the diversity and needs of our customers around the globe. In 2020, we activated a new approach to BRGs. We paired each BRG with a cross-cultural executive team sponsor to learn together and help lead its mission. We also announced the addition of new BRGs based on employee feedback, starting with our first Black and African American BRG, launched in February 2021.
Customers.   We strive to provide a safe and inclusive experience for our millions of diverse customers worldwide, and we strive to treat each one with dignity and respect.

Redesigned the United mobile app to be more accessible for people with visual disabilities
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Launched our Cultural Advisory Board to advise on improving our customer experience by learning more about diverse customers’ needs and implementing new and innovative ways to meet them

Launched Cultural Connections training for employees who interact with customers onboard, in lobbies and gate areas, starting with new routes to Tel Aviv and Accra, and began work on including cultural content on other destinations and expanding to other workgroups
Communities.   Our partnerships with local, national and global organizations and our work with elected officials and civic leaders provide opportunities to make a difference at all levels and champion causes that reflect our purpose and values.

Committed 30 million MileagePlus miles during 2021 to raise funds in support of initiatives and organizations committed to diversity, equity and inclusion

Raised more than $30,000 to benefit our community partner, My Block, My Hood, My City, which serves underprivileged youth through sales of a Black Lives Matter United-branded lapel pin
Commercial partners.   Our commitment to diversity and empowerment extends from our workforce and continues in our relationships with our suppliers. As a global operating company, with countless moving parts, we know the scale of impact we can make on local communities around the world by reaching out to suppliers of all backgrounds and sizes.

Developed a training on the value of diverse businesses and suppliers for leaders who purchase on behalf of United

Featured diverse suppliers’ products in our United Clubs
Our Awards and Leadership.   United has been recognized for the fifth consecutive year as a top-scoring company and best place to work for disability inclusion with a perfect score of 100 on the 2020 Disability Equality Index, and has received a perfect score of 100%, for the tenth consecutive year, on the 2020 Corporate Equality Index, a premier benchmarking survey and report on corporate policies and practices related to LGBTQ+ workplace equality, administered by the Human Rights Campaign Foundation. We are also proud to have been recognized in the 2020 “DiversityInc Top 50 Companies for Diversity” for our effort to build a more inclusive workplace and customer experience—the only airline in the group to earn this distinction—and are committed to continuing to learn and grow.
We are determined to be a global leader in DEI and the world’s most inclusive airline and will continue to work to ensure that our people, policies and processes reflect the customers and communities we serve.
Global Community Engagement
At United, we believe in connecting people, and that every action we take to positively impact our community counts. The Company focuses its community engagement on (i) investing in communities where our employees and customers live and work, (ii) lifting up communities impacted by disaster, (iii) breaking down barriers and promoting inclusion, (iv) inspiring the next generation of leaders and (v) flying toward a more sustainable future.
Investing in communities where our employees and customers live and work.   United is committed to investing in the communities where its employees and customers live and work. In 2019, United launched “Miles on a Mission,” a first-of-its-kind crowdsourcing platform through which eligible non-profit organizations and charities can raise miles for their organizations’ travel needs and customers can donate miles. During the 2019-2020 timeframe, United customers donated more than 52 million miles, and United donated an additional
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15.5 million miles, totaling over 67 million miles for the Miles on a Mission program. Additionally, United employee-volunteers supported projects both in their local communities as well as projects on a global scale. Since 2017, United employees have assembled more than one million meal kits distributed to over 10 countries around the world in partnership with Rise Against Hunger. In 2019, United employees contributed more than 107,000 volunteer service hours to Company-sponsored community outreach projects and to other organizations of their choice.
Lifting communities impacted by disaster.   United is committed to supporting communities impacted by disaster. Since 2013, United and its employees and customers have raised nearly $10 million and shipped more than one million pounds of relief supplies to impacted areas. In 2019, United donated $1.6 million to Feeding America and regional foodbanks in support of families who needed assistance due to loss of income resulting from the federal government shutdown. The Company also contributed $165,000 in direct donations to funds that aided those impacted by the California wildfires and worked with the American Red Cross to provide approximately 5,000 blankets to shelters across the state of California. In January 2020, the Company donated $250,000 toward the Ellen DeGeneres Show’s campaign to raise $5 million to aid in relief efforts for the Australian wildfires and matched $50,000 in donations to the Australian Wildfire Relief Fund created by Global Giving’s Disaster Recovery Network. Throughout the COVID-19 pandemic crisis, we have supported the communities where our employees and customers live and work. As part of our efforts, we provided free round-trip flights for doctors, nurses and other medical professionals traveling to New York City, New Jersey, California and Guam. In New York City, we partnered with the Mayor’s Fund to Advance New York City and a network of medical volunteer organizations, including The Society of Critical Care Medicine, to coordinate travel. We also worked with local government agencies and their non-profit partners to ensure qualified medical professionals had the proper housing and transportation to enable them to effectively offer their services. Additionally, we collaborated with a network of professional medical volunteer organizations to help enlist volunteers.
Breaking down barriers and promoting inclusion.   At United, caring is at our core and we strive to create a true sense of human connection to demonstrate we value the diversity and unique needs of every individual. United has a global partnership with Special Olympics and shares Special Olympics’ mission of creating a world where all are included and given the chance to participate. Since 2017, United employees have spent more than 12,000 hours volunteering with Special Olympics.
Inspiring the next generation of leaders.   United is committed to inspiring future generations of aviation leaders by supporting K-12 STEM education, college preparation, career readiness and workforce development. As the official airline of Global Glimpse, United provides transportation to more than 1,000 students and their teachers to participate in service-learning trips to Ecuador, Panama and the Dominican Republic each summer. In 2019, for Girls in Aviation Day, United hosted more than 500 girls from diverse backgrounds at 14 locations around the world to encourage their excitement and interest in aviation. Also, in 2019, United sponsored 43 primary and middle school educators from the Company’s hub markets to participate in Air Camp’s four-day professional development program for teachers, inspiring them to confidently incorporate aviation and STEM concepts into their classrooms, which will potentially reach up to 170,000 students annually.
Flying toward a more sustainable future.   In support of the Company’s environmental sustainability initiatives, United engages in projects designed to reduce landfill waste and support those in need. United is proud to be the first airline to partner with Clean the World, an organization that works to prevent millions of hygiene-related deaths each year. Through the Company’s partnership with Clean the World, United collects approximately 50,000 pounds of unused premium cabin amenity kits annually and recycles the products in them to support disaster relief, homeless shelters and aid organizations around the world.
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Director Nominee Skills and Experience Highlights
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Director Nominee Key Attributes
Tenure
Age
Diversity
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10 of 13 Director Nominees are independent
(including 10 of 11 Director Nominees to be elected by holders of our Common Stock)
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Our Director Nominees (See “Proposal No. 1: Election of Directors” on page 10)
Director
Age
Director
Since
Principal
Occupation
Other
Current
Public
Boards
Independent
Current
Committee
Membership
Directors to be Elected by the Holders of Common Stock
Carolyn Corvi
69
2010
Former VP and General Manager, The Boeing Company 2

Finance Committee (Chair)

Compensation

Executive Committee
Barney Harford
49
2016
Former Chief Operating Officer, Uber Technologies, Inc.

Audit

Finance

Public Responsibility
Michele J. Hooper
69
2018
President and CEO, The Directors’ Council
2

Audit (Chair)

Executive

Nominating/Governance
Walter Isaacson
68
2006
Advisory Partner, Perella Weinberg Partners

Public Responsibility (Chair)

Executive

Nominating/Governance
James A. C. Kennedy
67
2016
Former President and CEO, T. Rowe
Price Group, Inc.
1

Compensation

Finance
J. Scott Kirby
53
2020
CEO, United Airlines Holdings, Inc.
CEO

Executive

Finance
Edward M. Philip
55
2016
Former COO, Partners in Health 3

Nominating/Governance (Chair)

Audit

Executive
Edward L. Shapiro
56
2016
Former Managing Partner, PAR Capital Management, Inc.

Finance

Nominating/Governance

Public Responsibility
David J. Vitale
74
2006
Former Chairman, Urban Partnership Bank

Audit

Compensation

Finance
Laysha Ward
53
2021
Executive Vice President, Chief
External Engagement Officer, Target
Corporation
1
None
James M. Whitehurst
53
2016
President, International Business Machines Corporation

Compensation (Chair)

Executive

Nominating/Governance
Directors to be Elected by the Holders of Other Classes of Stock
Todd M. Insler
52
2016
Master Executive Council Chairman,
United Airline Pilots Master
Executive Council of ALPA

Public Responsibility
Sito J. Pantoja
64
2016
General Vice President, IAM Transportation Department

Public Responsibility
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Proposal No. 1:   Election of Directors
The Nominating/Governance Committee has recommended to the Board, and the Board has unanimously nominated, the individuals named below for election as directors at the Annual Meeting to hold office until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, resignation or removal. Each of the nominees currently serves as a director of the Company. There is no family relationship between any of the nominees or between any nominee and any executive officer of the Company. Oscar Munoz will not stand for reelection to the Board at the Annual Meeting and will retire from the Board at the end of his current term as a director. The Company thanks Mr. Munoz for his service on the Board and to the Company. As further detailed below, at the Annual Meeting, 11 directors are nominated for election by the holders of our common stock, $0.01 par value per share (“Common Stock”), and two directors will be elected by the holders of our other classes of stock. Immediately after the Annual Meeting, the size of the Board will be reduced to 13.
Shares represented by properly executed proxy cards will be voted, except where directed otherwise, FOR the election of each of the 11 nominees to be elected by the holders of our Common Stock. In the event that any nominee is unable to serve or for good cause will not serve, such shares will be voted FOR the election of such substitute nominee as the Board may propose. Each of the nominees has agreed to serve if elected, and management has no reason to believe that any of the nominees will be unable to serve.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED BELOW, WHICH IS DESIGNATED AS PROPOSAL NO. 1.
Director Qualifications
Set forth on the following pages is biographical and other information about each nominee for election as a director. This information includes, but is not limited to, the business experience and directorships on the boards of public companies and registered investment companies held by each nominee during at least the past five years. This information also includes a discussion of the specific experience, qualifications, attributes and skills of each nominee that led to the Board’s determination that such nominee is qualified and should serve as a director.
In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills, the Board believes that all of the nominees have demonstrated certain common attributes that the Board would generally expect any director nominee to possess. Those common attributes include an appropriate level of business, government or professional acumen, the capacity for strategic and critical thinking, leadership capabilities, a reputation for integrity and ethical conduct and an ability to work collaboratively. Please see “Corporate Governance—Nominations for Directors” below for further discussion of the criteria considered by the Nominating/Governance Committee when identifying director nominees.
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Directors to be Elected by the Holders of Common Stock
Eleven directors are to be elected by the holders of Common Stock. Each current director has served continuously since the date of his or her appointment.
Carolyn Corvi
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Independent
Age: 69
Director Since: 2010
Committees: Finance (Chair), Compensation and Executive
Select Business Experience:

Vice President and General Manager, Airplane Programs, Commercial Airplanes of Boeing Commercial Airplanes (commercial jet aircraft segment) of The Boeing Company (“Boeing”) (2005-2008)

Various other positions with Boeing for 34 years, including Vice President and General Manager of 737/757 Programs, Vice President of Aircraft Systems and Interiors, Vice President of the Propulsion Systems Division, Director of Quality Assurance for the Fabrication Division and Director of Program Management for 737/757 Programs
Current Public Company Directorships:

Allegheny Technologies Incorporated (2012-present)

Hyster-Yale Materials Handling, Inc. (2012-present)
Past Public Company Directorships:

Goodrich Corporation (2009-2012)

Continental Airlines, Inc. (“Continental”) (2009-2010)
Other Experience and Qualifications: Ms. Corvi provides extensive management expertise to the Board, having served in key management and operational oversight roles for Boeing during her 34 years of service. She also brings an expertise with respect to the manufacturing of commercial aircraft, which she developed through her management of commercial airplane production for Boeing as Vice President and General Manager, Airplane Programs, Commercial Airplanes, Vice President and General Manager of 737/757 Programs, Vice President of Aircraft Systems and Interiors, Vice President of the Propulsion Systems Division, and in the other positions indicated above. Ms. Corvi brings financial expertise to the Finance Committee function of the Board through her previous service on the Audit Committees of Continental and Goodrich Corporation and her current service on the Audit Committee of Hyster-Yale Materials Handling, Inc. Her service on the Continental board of directors provided her with valuable experience in the airline industry.
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Barney Harford
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Independent
Age: 49
Director Since: 2016
Committees: Audit, Finance and Public Responsibility
Select Business Experience:

Chief Operating Officer of Uber Technologies, Inc. (“Uber”) (2018-2019)

Chief Executive Officer of Orbitz Worldwide, Inc. (online travel company) (2009-2015)

Multiple roles at Expedia, Inc. (online travel company) (1999-2006), including President of Expedia Asia Pacific (2004-2006)
Past Public Company Directorships:

Orbitz Worldwide, Inc. (2009-2015)

eLong, Inc. (2004-2008)
Other Experience and Qualifications: Mr. Harford brings travel industry and ecommerce insight, combined with a successful track record deploying large technology teams, having served as Chief Executive Officer of Orbitz Worldwide, Inc. He also provides experience with international markets, in particular the Asia Pacific region, having led Expedia’s entry into China, Australia and Japan. Mr. Harford also brings valuable strategy and operational experience to the Board, having served as Chief Operating Officer of Uber, where he was responsible for Uber’s global ridesharing strategy, operations, marketing and customer support and Uber Eats (Uber’s food-delivery business). He previously served on the board of directors of Lola (2016-2017), LiquidPlanner, Inc., (2007-2017), Crystal Orange Hotel Group (formerly Mandarin Holdings) (2009-2012) and GlobalEnglish Corporation (2008-2011).
Michele J. Hooper
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Independent
Age: 69
Director Since: 2018
Committees: Audit (Chair), Executive and Nominating/Governance
Select Business Experience:

President and Chief Executive Officer, The Directors’ Council (consulting firm that works with corporate boards to increase their independence, effectiveness and diversity) (2013-present)

President and Chief Executive Officer, Voyager Expanded Learning (developer and provider of learning programs and teacher training in public schools) (1999-2000)

President and Chief Executive Officer, Stadtlander Drug Company (provider of disease-specific pharmaceutical care) (1998-1999)
Current Public Company Directorships:

UnitedHealth Group, Inc. (2007-present)
Past Public Company Directorships:

PPG Industries, Inc. (1997-2020)

AstraZeneca PLC (2003-2012)

Warner Music Group Corporation (2006-2011)
Other Experience and Qualifications: Ms. Hooper provides extensive corporate governance expertise to the Board and, as President and Chief Executive Officer of The Directors’ Council, has consulted with major companies to enhance the effectiveness of their corporate governance. Ms. Hooper has significant public company audit committee experience, with over 20 years of experience chairing audit committees at PPG Industries, Inc., AstraZeneca PLC, Warner Music Group Corporation and Target Corporation. Ms. Hooper’s corporate governance and accounting experience, along with her experience as a senior executive at a range of companies, provides the Board with a unique set of skills that enhances the Board’s leadership and oversight capabilities.
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Walter Isaacson
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Independent
Age: 68
Director Since: 2006
Committees: Public Responsibility (Chair), Executive and Nominating/Governance
Select Business Experience:

Advisory Partner, Perella Weinberg Partners (a financial services firm) (2017-present)

President and Chief Executive Officer of The Aspen Institute (international education and leadership institute) (2003-2018)

Chairman and Chief Executive Officer of CNN (2001-2003)
Past Public Company Directorships:

CNN (2001-2003) (Chairman)
Other Experience and Qualifications: Mr. Isaacson provides valuable business operations expertise and extensive management knowledge, having served as President and Chief Executive Officer of The Aspen Institute. Prior to that position, he gained leadership experience and strategic development and implementation skills as Chairman and Chief Executive Officer of CNN. Mr. Isaacson has also served as the editor of Time Magazine. In 2009, Mr. Isaacson was appointed by President Obama to be Chairman of the Broadcasting Board of Governors, which runs international broadcasts for the U.S. government. He served in this role until January 2012. Through his various professional positions, Mr. Isaacson has gained experience in a broad range of industries, including education, economics, communications and broadcasting.
James A. C. Kennedy
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Independent
Age: 67
Director Since: 2016
Committees: Compensation and Finance
Select Business Experience:

President and Chief Executive Officer of T. Rowe Price Group, Inc. (“T. Rowe Price”) (global investment management organization) (2007-2015)

Various other roles at T. Rowe Price throughout his tenure from 1978 to 2016
Current Public Company Directorships:

Columbia Care Inc. (2019-present)
Past Public Company Directorships:

T. Rowe Price (1996-2016)
Other Experience and Qualifications: Mr. Kennedy brings to the Board a stockholders’ perspective and his expertise in management, finance and leadership, particularly as a result of his tenure as President and Chief Executive Officer of T. Rowe Price, a global investment management organization which provides mutual fund, sub-advisory and institutional asset management. Prior to his appointment as President and Chief Executive Officer of T. Rowe Price, Mr. Kennedy served in roles of increasing responsibility at T. Rowe Price since 1978, including equity analysis (1978-1987), Director of Equity Research (1987-1999), and Head of U.S. Equities (1997-2006). Mr. Kennedy also brings executive compensation experience to the Board, having been involved in management compensation since 1987, and served as the Chairman of the Management Compensation Committee at T. Rowe Price for nine years.
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J. Scott Kirby
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Age: 53
Director Since: 2020
Committees:
Executive and
Finance
Select Business Experience:

Chief Executive Officer of the Company (May 2020-present)

President of the Company (August 2016-May 2020)

President of American Airlines Group and American Airlines, Inc. (2013-August 2016)

President of US Airways (2006-2013)
Other Experience and Qualifications: As our Chief Executive Officer, Mr. Kirby is responsible for the Company’s business and ongoing operations and management’s efforts to implement the strategic priorities identified by the Board. Mr. Kirby has been instrumental in the development and implementation both of the Company’s strategic growth plan and its core4 culture. Having served as President of the Company from August 2016 to May 2020, Mr. Kirby has key expertise in the Company’s operations, marketing, sales, alliances, network planning and revenue management, among other items. He also has extensive airline industry experience, having served as President of American Airlines Group and American Airlines, Inc. from 2013 to August 2016, as President of US Airways from October 2006 to December 2013 and in other significant leadership roles at US Airways and at America West prior to the 2005 merger of those carriers, including as Executive Vice President, Sales and Marketing (2001-2006); Senior Vice President, e-business (2000-2001); Vice President, Revenue Management (1998-2000); Vice President, Planning (1997-1998); and Senior Director, Scheduling and Planning (1995-1998). Prior to joining America West, Mr. Kirby worked for American Airlines Decision Technologies and at the Pentagon.
Edward M. Philip
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Independent
Age: 55
Director Since: 2016
Committees: Nominating/Governance (Chair), Audit and Executive
Select Business Experience:

Chief Operating Officer of Partners in Health (non-profit healthcare organization) (2013-2017)

Co-Founder and Managing General Partner of Highland Consumer Fund (2006-2013)

President and Chief Executive Officer of Decision Matrix Group (research and consulting firm) (2004-2005)

President, COO and CFO of Lycos, Inc. (1996-2000)

Vice President of Finance of The Walt Disney Company (1991-1995)
Current Public Company Directorships:

Hasbro, Inc. (2002-present)

BRP Inc. (2005-present)

Experience Investment Corp. (2019-present)
Other Experience and Qualifications: Mr. Philip brings to the Board nearly three decades of leadership across the technology, health care and financial services sectors. Mr. Philip was also one of the founding members of the internet search company, Lycos, Inc. During his tenure with Lycos, Mr. Philip held the positions of President, Chief Operating Officer and Chief Financial Officer at different times. Prior to joining Lycos, he spent time as the Vice President of Finance for The Walt Disney Company and a number of years in investment banking.
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Edward L. Shapiro
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Independent
Age: 56
Director Since: 2016
Committees: Finance,
Nominating/
Governance and
Public Responsibility
Select Business Experience:

Managing Partner of PAR Capital Management, Inc. (“PAR”) (investment management firm) (1999-2016)

Portfolio Manager, PAR (1997-2016)
Past Public Company Directorships:

Global Eagle Entertainment, Inc. (2013-2019)
Other Experience and Qualifications: Mr. Shapiro brings to the Board financial expertise and an investor’s perspective, having served in various capacities at PAR, an investment management firm specializing in investments in travel, media and internet-related companies, from 1997 to 2016. Mr. Shapiro served as Chairman of Global Eagle Entertainment, Inc., a provider of a wide range of connectivity solutions, including portable entertainment solutions, from 2013 to March 2018, and served as lead independent director from March 2018 to June 2019.
David J. Vitale
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Independent
Age: 74
Director Since: 2006
Committees: Audit, Compensation and Finance
Select Business Experience:

Former Chairman of the Urban Partnership Bank (2010-January 2019)

Chairman of Duff & Phelps Global Utility Income Fund (2011-present), DNP Select Income Fund, Inc. (2009-present), DTF Tax-Free Income Inc. (2015-present) and Duff & Phelps Utility and Corporate Bond Trust (2015-present) (investment companies)

President, Chicago Board of Education (education) (2011-2015)

Senior Advisor to the Chief Executive Officer of the Chicago Public Schools (education) (2007-2008)

Chief Administrative Officer of the Chicago Public Schools (2003-2007)
Current Registered Investment Company Directorships:

Duff & Phelps Global Utility Income Fund (2011-present)

DTF Tax-Free Income Inc. (2005-present)

Duff & Phelps Utility and Corporate Bond Trust (2005-present)

DNP Select Income Fund, Inc. (2000-present)
Past Public Company Directorships:

Alion Science & Technology Corporation (2009-2014)
Other Experience and Qualifications: Mr. Vitale provides valuable financial and management expertise to the Board through many years of experience in significant business roles. Mr. Vitale previously served as the Chairman of the Urban Partnership Bank and as President of the Chicago Board of Education, where he was responsible for governance, organizational and financial oversight of the Chicago Public Schools. Mr. Vitale has acted both as Chief Administrative Officer of the Chicago Public Schools and Senior Advisor to the Chief Executive Officer of the Chicago Public Schools, where he provided oversight for all educational departments, including finance, operations, human resources, technology and
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procurement. He brings to the Board expertise on the audit committee function, having served on the Audit Committee of Alion Science & Technology Corporation. He brings additional leadership experience to the Board by serving as Chairman of Duff & Phelps Global Utility Income Fund, DNP Select Income Fund, Inc., DTF Tax-Free Income Inc. and Duff & Phelps Utility and Corporate Bond Trust. Through his extensive professional roles, Mr. Vitale gained experience in a number of industries, including education, banking, financial services and investment management.
Laysha Ward
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Independent
Age: 53
Director Since: 2021
Select Business Experience:

Executive Vice President, Chief External Engagement Officer, Target Corporation (“Target”) (American retail corporation) (2017-present)

Executive Vice President, Chief Corporate Social Responsibility Officer, Target (2015-2017)

President, Community Relations and Target Foundation (2008-2015)
Current Public Company Directorships:

Denny’s Corporation (2010-present)
Other Experience and Qualifications: Ms. Ward provides valuable business and corporate responsibility expertise, having served as a C-Suite executive with nearly 30 years of experience at Target Corporation, including currently as the Executive Vice President, Chief External Engagement Officer since 2017. In her current role, Ms. Ward oversees Target’s enterprise-wide approach to engage and deepen relationships with cross-sector stakeholders to drive positive business and community impact. Prior to her current role, Ms. Ward served as Executive Vice President, Chief Corporate Social Responsibility Officer from 2015 to 2017 and President, Community Relations and Target Foundation from 2008-2015. Ms. Ward brings expertise in consumer industries in her role at Target and having served on the Board of Directors of Denny’s Corporation since 2010. Ms. Ward also brings expertise in Environmental, Social and Governance (ESG) matters.
James M. Whitehurst
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Independent
Age: 53
Director Since: 2016
Committees: Compensation (Chair), Executive and Nominating/
Select Business Experience:

President, International Business Machines Corporation (“IBM”) (April 2020-present)

Senior Vice President, IBM and Chief Executive Officer of Red Hat, Inc. (“Red Hat”) (provider of open source enterprise IT products and services) (2019-April 2020)

President and Chief Executive Officer of Red Hat (2008-2019)

Chief Operating Officer of Delta Air Lines, Inc. (“Delta”) (2005-2007)

Chief Network and Planning Officer of Delta (2004-2005)

Senior Vice President—Finance, Treasury and Business Development of Delta (2002-2004)
Past Public Company Directorships:

Red Hat (2008-2019)

SecureWorks Corp. (2016-2019)

DigitalGlobe, Inc. (2009-2016)
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Governance Other Experience and Qualifications: Mr. Whitehurst provides valuable business expertise in addition to airline industry knowledge to the Board. Prior to IBM and Red Hat, Mr. Whitehurst spent six years at Delta, where he managed airline operations and drove significant international expansion as Chief Operating Officer. Mr. Whitehurst helped put Delta back on firm footing as it emerged from bankruptcy in 2007. Before Delta, he held several corporate development leadership roles at The Boston Consulting Group, with clients across a wide range of industries.
Directors to be Elected by the Holders of Other Classes of Stock
The following classes of directors are to be elected by the holders of certain classes of our stock other than Common Stock.
THE HOLDERS OF COMMON STOCK DO NOT VOTE ON THE ELECTION OF THE FOLLOWING DIRECTORS.
Each nominee was previously elected or appointed by the holder of the applicable class of our preferred stock and has served continuously as a director since the date of his first election or appointment. If a nominee unexpectedly becomes unavailable before election, or we are notified that a substitute nominee has been selected, votes will be cast pursuant to the authority granted by the proxies from the respective holder(s) for the person who may be designated as a substitute nominee.
ALPA Director—Elected by the Holder of Class Pilot MEC Junior Preferred Stock
One director (the “ALPA director”) is to be elected by the holder of our Class Pilot MEC Junior Preferred Stock, the United Airlines Pilots Master Executive Council of Air Line Pilots Association, International (the “ALPA MEC”). The ALPA MEC has nominated and intends to elect Todd M. Insler as the ALPA director. The Board has recommended that the ALPA MEC vote FOR Captain Insler.
Captain Insler is a current employee of the Company. His compensation for his role as a United pilot is determined under the collective bargaining agreement between United and the Air Line Pilots Association (“ALPA”). Captain Insler does not receive any cash or equity compensation for his service as the ALPA director.
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Todd M. Insler
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Age: 52
Director Since: 2016
Committees: Public Responsibility
Select Business Experience:

Master Executive Council Chairman of ALPA MEC (2016-present)

Captain, United Boeing 767 (2015-present)

Captain, Airbus A320 Aircraft (2010-2015)
Other Experience and Qualifications: Captain Insler provides valuable management expertise and knowledge of aviation and airline services to the Board. Captain Insler has served in key labor union management positions within ALPA, including Chairman of the MEC Grievance Committee, member of the United Pilots’ System Board of Adjustment and member of the ALPA National Information Technology Advisory Committee. In addition, Captain Insler has served as a captain for Boeing 767 aircraft since October 2015 and previously as a captain for Airbus A320 aircraft.
IAM Director—Elected by the Holder of Class IAM Junior Preferred Stock
One director (the “IAM director”) is to be elected by the holder of our Class IAM Junior Preferred Stock, the International Association of Machinists and Aerospace Workers (the “IAM”). The IAM has nominated and intends to elect Sito J. Pantoja as the IAM director. The Board has recommended that the IAM vote FOR Mr. Pantoja.
Sito J. Pantoja
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Age: 64
Director Since: 2016
Committees: Public Responsibility
Select Business Experience:

General Vice President of the IAM Transportation Department (2012-present)

IAM Transportation Department Chief of Staff (2005-2012)
Other Experience and Qualifications: Mr. Pantoja provides valuable management expertise and knowledge of aviation and airline services to the Board. In addition to his current position, Mr. Pantoja has served in key labor union management positions such as the IAM’s representative to the Federal Aviation Administration’s Rulemaking Advisory Committee and as a board member of the Guide Dogs of America.
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Corporate Governance
We are committed to high standards of corporate governance and to conducting our business ethically and with integrity and professionalism. In furtherance of these commitments, the Board has adopted Corporate Governance Guidelines developed and recommended by the Nominating/Governance Committee, which are available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Corporate Governance Guidelines” under the heading “Governance Documents.”
Corporate Governance Guidelines
The Nominating/Governance Committee monitors developments in laws, regulations and best practices relating to corporate governance and periodically recommends to the Board the adoption of amendments to the Corporate Governance Guidelines to reflect those developments. The current Corporate Governance Guidelines provide for the governance practices described below.
Independence.   Our Corporate Governance Guidelines require that a majority of the Board be “independent” under the criteria for independence established by the rules of the Nasdaq Stock Market LLC (the “Nasdaq Listing Rules”) and any other applicable rules or regulations, and the Board has adopted categorical standards to assist it in determining whether a director has any direct or indirect material relationship with the Company. Please see “Director Independence” below for a discussion of the Board’s independence determinations.
Limitation on Board Service.   None of our directors is permitted to serve on the board of directors of more than four other public companies. In addition, no director who is an active chief executive officer or the equivalent of another public company is permitted to serve on the boards of more than two other public companies. No member of the Company’s management is permitted to serve on the board of directors of another company if an independent director of the Company serves as the chairman, chief executive officer or president of such other company.
Retirement Age for Directors.   No candidate is eligible for election or reelection as a director if at the time of such election he or she is 75 or more years of age, unless the Board affirmatively determines otherwise.
Changes in Business or Professional Affiliations or Responsibilities.   If a director experiences a substantial change in his or her principal business or professional affiliations or responsibilities during his or her term on the Board, the director is required to volunteer to resign from the Board. The Board, through the Nominating/Governance Committee (excluding the director who volunteered to resign, if a member of the Nominating/Governance Committee), will have the opportunity to review the continued appropriateness of the director’s Board membership under the particular circumstances and shall determine whether to accept such resignation.
Conflicts of Interest.   Our Corporate Governance Guidelines require any director with a potential conflict of interest to disclose the matter to the Chairman of the Board and the Lead Director (if appointed at the time, as defined below) before any decision is made related to the matter. If the Chairman of the Board and the Lead Director, in consultation with legal counsel, determine that a conflict exists, or that the perception of a conflict is likely to be significant, then the director is obligated to recuse himself or herself from any discussion or vote related to the matter. Directors are also required to comply with the conflicts of interest policy set forth in the Company’s Code of Ethics and Business Conduct, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Code of Ethics and Business Conduct” under the heading “Governance Documents.”
Lead Director.   Pursuant to our Corporate Governance Guidelines, in the event that the Chairman of the Board is not an independent director, the independent directors may designate a lead director from among
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the independent directors (the “Lead Director”). If the independent directors do not designate a Lead Director, then the Chairman of the Nominating/Governance Committee will become the Lead Director on an ex officio basis. Following the 2020 annual meeting of stockholders, (the “2020 Annual Meeting"), Mr. Philip became the Lead Director of the Board when Mr. Munoz assumed the role of Executive Chairman following his transition from the role of Chief Executive Officer.
The Lead Director’s responsibilities include, but are not limited to, the following: consulting with the Chairman of the Board to determine the agenda for Board meetings; presiding at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent directors; serving as liaison between the Chairman of the Board and the independent directors; approving information sent to the Board; approving meeting agendas for the Board; approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; having the authority to call meetings of the independent directors; coordinating the agenda for moderating sessions of the Board’s independent directors; assisting the Board in assuring compliance with and implementation of the Corporate Governance Guidelines; and, if requested by major stockholders, ensuring that he or she is available for consultation and direct communication.
Annual Performance Evaluation of the Board.   The Nominating/Governance Committee develops, recommends to the Board and coordinates the annual performance evaluation of the Board to determine whether the Board is functioning effectively and meeting its objectives and goals. Each of the Audit Committee, Compensation Committee, Executive Committee, Finance Committee, Nominating/Governance Committee and the Public Responsibility Committee separately perform annual self-evaluations. The collective evaluation results are reported by the committee chair to the full committee for discussion. In addition, the Nominating/Governance Committee periodically performs an evaluation of each director’s individual performance.
Annual Meeting Attendance.   Our directors are expected to attend each annual meeting of stockholders absent exceptional reasons. All of our incumbent directors attended the 2020 Annual Meeting, with the exception of Ms. Ward, who joined the Board in February 2021.
Bylaws, Committee Charters and Other Policies
In addition to those practices established by our Corporate Governance Guidelines, our Amended and Restated Bylaws (the “Bylaws”), the charters of the Board committees and our other Company policies provide for the following significant corporate governance practices:

All of the members of the Board are elected annually by our stockholders.

The Board and each of its committees have the authority to retain outside consultants or advisers at the Company’s expense as the directors deem necessary or appropriate.

Our stockholders have the right to submit director nominees to the Board to be included in the Company’s annual proxy statement, known as “proxy access.” Stockholders are eligible to use proxy access if they (individually or together with a group of up to 20 stockholders) own 3% or more of the Company’s capital stock entitled to vote in the election of directors. In addition, such stockholder (or group) must have owned such stock continuously for at least three years. Our proxy access allows any eligible stockholder (or group) to nominate director candidates constituting up to the greater of two or 20% of the Board elected by the holders of Common Stock (subject to reduction in certain circumstances), provided that the stockholder (or group) and each nominee satisfy the requirements specified in the Bylaws.
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Prohibition on Hedging and Pledging
Under our securities trading policy, our officers, directors and certain other management employees are prohibited from engaging in speculative and derivative trading, short-selling, or otherwise hedging our securities. This restriction includes the purchase and sale of puts, calls, warrants, options, forward-sale contracts, prepaid collars and similar derivative instruments.
Our officers, directors and certain other management employees are also prohibited from pledging our securities.
Director Independence
In connection with the annual determination of director independence, the Board has adopted the following categorical standards as part of the Corporate Governance Guidelines to assist the Board in determining whether a director has any direct or indirect material relationship with the Company.
Under the categorical standards adopted by the Board, a director is not independent if:

The director is, or at any time during the past three years was, employed by the Company.

The director accepted or has a family member who accepted any compensation from the Company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the determination of independence, other than the following:

compensation for Board or Board committee service;

compensation paid to a family member who is an employee (other than an executive officer) of the Company; or

benefits under a tax-qualified retirement plan, or non-discretionary compensation.

The director is a family member of an individual who is, or at any time during the past three years was, employed by the Company as an executive officer.

The director is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following:

payments arising solely from investments in the Company’s securities; or

payments under non-discretionary charitable contribution matching programs.

The director is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the Company serve on the compensation committee of such other entity.

The director is, or has a family member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.
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The Board considers the purchase of the Company’s air carrier services in the ordinary course by the employer of any director who is actively employed to be immaterial in amount and significance to the Company, and therefore, do not preclude a finding of independence for such director.
For purposes of these categorical standards, (i) a “family member” of a director includes a director’s spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home, and (ii) the “Company” means United Airlines Holdings, Inc. and its direct and indirect subsidiaries. In connection with the determination of director independence, the Nominating/Governance Committee reviewed the categorical standards adopted by the Board together with the Nasdaq Listing Rules and other applicable legal requirements. The Nominating/Governance Committee also reviewed information compiled from the responses to questionnaires completed by each of the directors, information derived from the Company’s corporate and financial records and information available from public records.
Consistent with the recommendation of the Nominating/Governance Committee, the Board has applied these independence tests and standards to each of the current directors and nominees for director. The Board has affirmatively determined that each of Mses. Corvi, Hooper and Ward, and Messrs. Harford, Isaacson, Kennedy, Philip, Shapiro, Vitale and Whitehurst qualifies as “independent” under the applicable independence tests and standards. Messrs. Kirby, Munoz and Pantoja and Captain Insler do not qualify as “independent” under the applicable tests and standards. Messrs. Kirby and Munoz are not independent because they are employees of the Company. Captain Insler is not independent because he is an employee of United Airlines. Mr. Pantoja is not independent because he is affiliated with the IAM, a union that represents certain of the Company’s employees. Please see “Proposal No. 1: Election of Directors” above for a list of all nominees, together with biographical summaries for the nominees, including each individual’s business experience, directorships and other qualifications.
Majority Voting; Resignation Policy
The Bylaws and the Corporate Governance Guidelines provide that directors will be elected by a majority of votes cast in uncontested elections and a plurality vote in contested elections. When a majority vote standard applies, the Corporate Governance Guidelines require any incumbent director who fails to receive a majority of the votes cast in an uncontested election to tender his or her resignation to the Board promptly following certification of the stockholders’ vote. The Nominating/Governance Committee will consider the tendered resignation, and recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. The Board is expected to act on the recommendation within 120 days following certification of the stockholders’ vote and will promptly disclose its decision regarding whether to accept the director’s resignation offer through a press release, a Current Report on Form 8-K, or other means of public disclosure deemed appropriate. The director who tenders his or her resignation will not participate in the recommendation of the Nominating/Governance Committee or the decision of the Board with respect to his or her resignation.
Board Meetings
The Board meets regularly on previously determined dates, and special meetings are scheduled when required. The Board held 17 meetings in 2020. During 2020, each of the incumbent directors attended at least 75% of the total number of meetings of the Board and each committee of which he or she was a member. As indicated above under “Corporate Governance Guidelines—Annual Meeting Attendance,” our directors are also expected to attend each annual meeting of stockholders absent exceptional reasons.
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Executive Sessions of Non-Management Directors
Our non-management directors regularly meet separately in executive session outside the presence of any management director. Our Corporate Governance Guidelines provide that the independent Chairman of the Board or Lead Director (in the event the Chairman of the Board is not independent) preside over non-management director executive sessions. In addition, our Corporate Governance Guidelines require our independent directors to meet outside the presence of management and the other directors at least twice per year, with the independent Chairman or Lead Director, as applicable, also presiding over such sessions.
Board Leadership Structure
The Board has the responsibility for selecting the appropriate leadership structure for the Company. Our Corporate Governance Guidelines state that the offices of the Chairman of the Board and Chief Executive Officer may be either combined or separated, in the Board’s discretion.
The Board is currently led by our Executive Chairman, Mr. Munoz, a role he assumed after stepping down from the role of Chief Executive Officer of the Company after the 2020 Annual Meeting, and Mr. Philip, our Lead Director. As previously disclosed, Mr. Munoz will retire from the Board at the end of his current term at the Annual Meeting. At such time, a new independent Chairman of the Board is expected to be appointed by the Board pursuant to a selection process conducted by the Nominating/Governance Committee. The Board believes that separating the roles of Chief Executive Officer and Chairman of the Board is the most appropriate structure at this time. Having an independent Chairman of the Board is a means to ensure that Mr. Kirby is able to more exclusively focus on his role as Chief Executive Officer. The Board also believes that an independent Chairman of the Board can effectively manage the relationship between the Board and the Chief Executive Officer.
Board Oversight of Risk Management
The Board considers effective risk oversight an important priority. As we consider risks in connection with virtually every business decision, the Board discusses risk throughout the year generally and also in connection with specific proposed actions. The Board’s approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight among the full Board and its committees, and fostering an appropriate culture of integrity and compliance with legal and ethical responsibilities.
The Board exercises its oversight of our risk management policies and practices primarily through its committees, as described below, which regularly report back to the Board regarding their risk oversight activities.

The Audit Committee oversees the Company’s risk assessment and risk management policies and strategies with respect to major business risk exposures (taking into account the risk assessment and risk management policies and strategies managed through the respective committees of the Board), including risks related to the Company’s financial statements, the financial reporting process, accounting and certain legal and compliance matters and data privacy, network security and other cyber risks. The Audit Committee also oversees the internal audit function and the Company’s ethics and compliance program.

The Finance Committee oversees the Company’s management of certain financial, operating and economic risks, including the Company’s hedging strategies related to fuel, foreign currency and interest rates, various insurance programs, including coverage for property, casualty, fiduciary and political risk and directors and officers liability, and certain legal and regulatory matters that may have a material impact on the Company’s financing or risk management activities (taking into account
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the review of the Company’s risk assessment and risk management policies and strategies managed through the Company’s Audit Committee).

The Compensation Committee periodically reviews the potential risks arising from our compensation policies, practices and programs in light of the Company’s risk profile and risk management process, as well as risk-mitigating features and controls, to determine whether any such risks are material to the Company. In reviewing our compensation program design, the Compensation Committee engages in discussions with its independent compensation consultant and management regarding potential risks arising from our compensation policies, practices and programs. Compensation risk is assessed in the context of compensation program design, setting of performance targets, certifying performance against targets, compensation risk in the context of overall risk procedures and our broad-based compensation programs. Based on those discussions and a September 2020 compensation risk assessment, the Compensation Committee determined that the structure of the Company’s compensation policies, practices and programs in place at that time did not create any risks that were reasonably likely to have a material adverse effect on the Company. In reaching this determination, the Compensation Committee considered certain of our compensation policies, practices and program features including: oversight by an independent compensation committee; our balance of base pay combined with short- and long-term incentives that reward both absolute and relative performance measures, as well as individual performance; 2020 long-term incentives include time-vested restricted share unit awards, which help to further balance performance results and contain the overall volatility of outstanding incentives; our incentive awards include a cap on maximum payout opportunities which mitigates against excessive earn-out potentials; performance awards occur annually, resulting in overlapping performance periods that even out business cycles and introduce multiple-year incentive horizons; use of multiple financial and non‑financial performance metrics to create a further balance of rewards; payout timing over multi-year and overlapping performance periods; the inclusion of consistent performance metrics and incentives across performance periods; the inclusion of a discretionary gate for cash incentives based on the Company’s having an adequate cash balance; the Compensation Committee retains discretion to reduce the annual incentive payouts below the formulaic performance results; inclusion of equity incentives and stock ownership guidelines that discourage short-term risks that disadvantage long-term stock price; our compensation claw-back policy and inclusion of claw-back provisions in our programs; and securities trading policies that prohibit pledging and hedging of our securities, including our Common Stock, by our officers and directors. The Company is addressing reputational risk potential through initiatives focusing on positive customer experience and a culture that emphasizes customer centricity. Customer-centric goals were included in both the 2020 annual and long-term incentive programs, which mitigate behaviors that could result in reputational risk. In addition, the Compensation Committee receives input from an independent compensation consultant regarding program design, including risks associated with plan design features. Considerable support and analysis accompanies the target setting process, and targets are established based on the Company’s Board-approved budgets, updated forecast information and long-term operating plan. The Compensation Committee certifies performance against our targets based on results reviewed by our internal audit group before any payments are made.

The Nominating/Governance Committee periodically reviews the risks arising from our corporate governance policies and practices, including the structure and performance of the Board, its committees and our individual directors. The Nominating/Governance Committee also reviews and oversees the Company’s succession planning process for executive officers.

The Public Responsibility Committee oversees social, political, safety and environmental issues that could pose significant risk to the Company’s reputation, business or performance. As part of its oversight, the Public Responsibility Committee also monitors sustainability issues that pose a significant risk to the Company and seeks to mitigate these risks.
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While the Board oversees risk management, the Company’s management is charged with identifying and managing the risks. The Company has robust internal processes and a strong internal control environment to identify and manage risks and to communicate with the Board about these risks. These include an enterprise risk management program, an enterprise risk management committee, an ethics and compliance program, and comprehensive internal and external audit processes. The Board receives periodic reports on each of these aspects of the Company’s risk management process. In addition, the Board, through the Audit and Finance Committees, participates in the enterprise risk management process by providing feedback on management’s identification and assessment of the key risks facing the Company.
Board’s Role in the Oversight of Cybersecurity Risks
The Board and the Audit Committee also regularly review United’s cybersecurity and other technology risks, controls and procedures, and it receives reports from our Chief Digital Officer and Chief Information Security Officer at least twice annually regarding our adherence to leading industry standards (i.e., National Institute of Standards and Technology (NIST) Cybersecurity Framework) for assessing cybersecurity maturity, identifying security gaps and meeting cybersecurity regulations. The Company’s cybersecurity program is regularly audited by independent third parties against various regulatory frameworks, and the Company incorporates regular information security training as part of its employee education and development program.
Board’s Role in the Oversight of COVID-19 Risks
Our Board and its committees have been providing strong oversight of our response to the COVID-19 pandemic. Since the first quarter of 2020, the Board has met regularly to consider and discuss updates on the Company’s management of the COVID-19 pandemic, with a focus on monitoring key areas of risk and impact with regard to the Company’s operations, such as health and safety priorities, financial position and liquidity, internal controls, travel demand and market trends, capital expenditure and budgeting, cybersecurity, communications strategy, personnel management, supply chain impact and government affairs engagement, among other items. The scope of information exchanged between the Board and management has expanded, and communications with management has increased during this unprecedented time, including bi-weekly updates regarding the Company’s response to the COVID-19 pandemic and its impact on the Company’s operations, financial position and liquidity. Under the direction of the Board, the Company has implemented a number of initiatives to mitigate the risks of the COVID-19 pandemic, including being the first airline to require masks onboard, expanding on-site testing for customers at the Company’s hub airports, and being the first major U.S. airline to ask all passengers to complete a health self-assessment during their check-in process based on recommendations from the Cleveland Clinic.
Communications with the Board
Stockholders and other interested parties may contact the Board as a whole, or any individual member, including the Chairman or the non-management or independent directors as a group, by one of the following means: (i) writing to the Board of Directors, United Airlines Holdings, Inc., c/o the Corporate Secretary’s Office, 233 S. Wacker Drive, Chicago, Illinois 60606; or (ii) emailing the Board at UALBoard@united.com.
Stockholders may communicate with the Board on an anonymous or confidential basis. The Board has designated the Corporate Secretary’s Office as its agent for receipt of communications. All communications will be received, processed and initially reviewed by the Corporate Secretary’s Office. The Corporate Secretary’s Office generally does not forward communications that are not related to the duties and responsibilities of the Board, including junk mail, service complaints, employment issues, business suggestions, job inquiries, opinion surveys and business solicitations. The Corporate Secretary’s Office maintains communications and they are available for review by any member of the Board at his or her request.
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Code of Ethics and Business Conduct
The Company has adopted a code of ethics, the “Code of Ethics and Business Conduct,” for directors, officers (including the Company’s principal executive officer, principal financial officer and principal accounting officer), employees and third-party representatives such as contractors, consultants and agents of the Company and its subsidiaries. The code serves as a “Code of Ethics” as defined by SEC regulations and Nasdaq Listing Rules. The code is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Code of Ethics and Business Conduct” under the heading “Governance Documents.”
Nominations for Directors
As described below, our Nominating/Governance Committee identifies and recommends for nomination individuals qualified to be Board members, other than directors elected by holders of preferred stock of the Company (the ALPA director and the IAM director). The Nominating/Governance Committee identifies director candidates through a variety of means, including suggestions from members of the Nominating/Governance Committee and the Board, as well as suggestions from Company officers and employees. The Nominating/Governance Committee may retain a search firm to identify director candidates (other than those elected by holders of preferred stock of the Company). Ms. Ward, who is standing for election as a director for the first time at the Annual Meeting, was first identified as a candidate to join the Board by Russell Reynolds Associates, the Company’s independent executive search firm.
In addition, the Nominating/Governance Committee considers candidates for director suggested by stockholders. Holders of Common Stock may submit director candidates for consideration (other than those elected by holders of preferred stock of the Company) by writing to the Chairman of the Nominating/Governance Committee, United Airlines Holdings, Inc., c/o the Corporate Secretary’s Office, 233 S. Wacker Drive, Chicago, Illinois 60606. Stockholders must provide the recommended candidate’s name, biographical data, qualifications and other information required by Section 2.10 of the Bylaws with respect to director nominations by stockholders.
A candidate for election as a director of the Board (other than those elected by holders of preferred stock of the Company) should possess a variety of characteristics. Candidates for director recommended by stockholders must be able to fulfill the independence standards established by the Board as set forth in Nasdaq Listing Rules, any other applicable rules or regulations, and the Company’s Corporate Governance Guidelines as outlined above under “Director Independence.”
Submissions of candidates who meet the criteria for director nominees approved by the Board will be forwarded to the Chairman of the Nominating/Governance Committee for further review and consideration. The Nominating/Governance Committee reviews the qualifications of each candidate and makes a recommendation to the full Board. The Nominating/Governance Committee considers all potential candidates in the same manner and by the same standards regardless of the source of the recommendation and acts in its discretion in making recommendations to the full Board. Any invitation to join the Board (other than with respect to any director who is elected by holders of preferred stock of the Company) is extended by the entire Board through the Chairman of the Board or the Chairman of the Nominating/Governance Committee.
In addition to recommending director candidates to the Nominating/Governance Committee, stockholders may also, pursuant to procedures established in the Bylaws, directly nominate one or more director candidates to stand for election at an annual or special meeting of stockholders. For an annual meeting of stockholders, a stockholder wishing to make such a nomination must deliver written notice of the proposed nomination to the Secretary of the Company not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. For a special meeting of stockholders, a stockholder wishing to make such a nomination must deliver written notice of the nomination to the Secretary of the Company not earlier than 120 days prior to the date of such special meeting and not later than the close of business on the later of: (x) 90 days prior to the date of such special meeting; and (y) 10 days following the day on
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which public announcement is first made of the date of such special meeting. In either case, a notice of nomination submitted by a stockholder must include information concerning the nominating stockholder and the stockholder’s nominee(s) as required by the Bylaws.
In accordance with the Bylaws, stockholders may also submit director nominees to the Board to be included in the Company’s annual proxy statement, known as “proxy access.” Stockholders who intend to submit director nominees for inclusion in the Company’s proxy materials for the 2022 annual meeting of stockholders must comply with the requirements of proxy access as set forth in the Bylaws. The stockholder or group of stockholders who wish to submit director nominees pursuant to proxy access must deliver the required materials to the Company not less than 120 days nor more than 150 days prior to the anniversary of the date that the Company first mailed its proxy materials for the annual meeting of the previous year.
Pursuant to the Company’s Corporate Governance Guidelines, the Board seeks independent directors with diverse professional backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity. The Board is committed to actively seeking women and minority candidates for the pool from which director candidates are chosen. A candidate for director should have experience in positions with a high degree of responsibility and be selected based upon contributions he or she can make to the Board and upon his or her willingness to devote adequate time and effort to Board responsibilities. In making this assessment, the Nominating/Governance Committee will consider the number of other boards on which the candidate serves and the other business and professional commitments of the candidate. The candidate should also have the ability to exercise sound business judgment to act in what he or she reasonably believes to be in the best interests of the Company and its stockholders. As described above, no candidate is eligible for election or reelection as a director if at the time of such election he or she is 75 or more years of age, unless the Board affirmatively determines otherwise.
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Committees of the Board
The Board has six standing committees: Audit, Compensation, Executive, Finance, Nominating/Governance and Public Responsibility. The Audit Committee, Compensation Committee and Nominating/Governance Committee are comprised solely of independent directors. The chart below shows the current membership of each committee and a summary of the functions performed by each committee.
COMMITTEE MEMBERSHIP
AUDIT
COMPENSATION
EXECUTIVE
FINANCE
NOMINATING/
GOVERNANCE
PUBLIC
RESPONSIBILITY
Carolyn Corvi
M
M
C
Barney Harford
M
M
M
Michele J. Hooper*
C
M
M
Todd M. Insler
M
Walter Isaacson
M
M
C
James A. C. Kennedy
M
M
J. Scott Kirby
M
M
Oscar Munoz
C
M
M
Sito J. Pantoja
M
Edward M. Philip*
M
M
C
Edward L. Shapiro
M
M
M
David J. Vitale*
M
M
M
James M. Whitehurst
C
M
M
Key:
M = Committee Member
 
C = Committee Chair
 
* = Audit Committee Financial Expert
Audit Committee
The Audit Committee met eight times during 2020 and has a written charter adopted by the Board, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Audit Committee Charter” under the heading “Governance Documents.” All of the members of the Audit Committee are independent as defined by the applicable Nasdaq Listing Rules and SEC standards. The Board has determined that each of the Audit Committee members satisfies the financial literacy requirements under the Nasdaq Listing Rules, and that each of Ms. Hooper and Messrs. Philip and Vitale qualifies as an “audit committee financial expert” as defined by SEC regulations.
The purpose of the Audit Committee is to: (i) oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements; (ii) assist the Board in fulfilling its responsibility to oversee: (a) the integrity of the Company’s financial statements and the adequacy of the Company’s system of disclosure controls and internal controls over financial reporting; (b) the Company’s compliance with legal and regulatory requirements and ethical standards; (c) the independent auditors’ qualifications and independence; and (d) the performance of the Company’s internal audit function and independent auditors; (iii) provide an open avenue of communication between the independent auditors, the internal auditors, management and the Board and (iv) prepare an audit committee report as required by the SEC, which is set forth in this proxy statement under “Audit Committee Report.”
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In discharging its duties, the Audit Committee has the authority to conduct or authorize investigations or studies into any matters within the Audit Committee’s scope of responsibilities. The Audit Committee can form and delegate authority to subcommittees. It also has the authority, without further Board approval, to obtain, at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisers as it deems advisable.
Compensation Committee
The Compensation Committee met seven times during 2020 and has a written charter adopted by the Board, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Compensation Committee Charter” under the heading “Governance Documents.” All of the members of the Compensation Committee are independent as defined under the Nasdaq Listing Rules.
The Compensation Committee is responsible for, among other things: (i) overseeing the administration of the Company’s compensation plans (other than plans covering only directors of the Company), including the equity-based plans and executive compensation programs of the Company; (ii) discharging the Board’s responsibilities relating to the performance evaluation and compensation of the Company’s officers, including the Company’s Chief Executive Officer and (iii) preparing the compensation committee report required by the SEC to be included in the annual proxy statement, which is set forth in this proxy statement under “Executive Compensation—Compensation Committee Report.” The Compensation Committee also is responsible for reviewing and discussing with management the Compensation Discussion and Analysis (the “CD&A”), and based on such discussions, determining whether to recommend to the Board that the CD&A be included in the Company’s annual proxy statement or annual report on Form 10-K, as applicable. The Compensation Committee also reviews and makes recommendations to the Board with respect to the adoption (or submission to stockholders for approval) or amendment of executive incentive compensation plans and all equity-based compensation plans for the Company (other than equity-based plans covering only directors of the Company). Furthermore, the Compensation Committee exercises the powers and performs the duties, if any, assigned to it from time to time under any compensation or benefit plan of the Company or any of its subsidiaries.
The Compensation Committee performs a review, at least annually, of the goals and objectives of the Company and establishes the goals and objectives for the Chief Executive Officer. In addition, the Compensation Committee annually evaluates the performance of the Chief Executive Officer, including evaluating the Chief Executive Officer’s performance in light of the goals and objectives relevant to his compensation and discusses that evaluation with the Board. The Compensation Committee has the sole authority to set the Chief Executive Officer’s compensation based on this evaluation and the Company’s compensation philosophy. The Compensation Committee also reviews and determines at least annually the compensation of each other executive officer of the Company. In addition to the Chief Executive Officer, the Compensation Committee oversees the annual performance evaluation process of the other executive officers of the Company.
The Compensation Committee has delegated to the Chief Executive Officer the authority to grant stock awards to eligible participants (other than executive officers of the Company), the interpretative authority under the Company’s incentive compensation plans for interpretations and determinations relating to the grant of stock awards to such eligible participants and the modification of the terms of such a participant’s award following termination of employment. Additionally, the Chief Executive Officer makes recommendations to the Compensation Committee regarding the compensation of the officers who report directly to him. His recommendations are based on input from the Executive Vice President, Human Resources and Labor Relations and her staff, and the Compensation Committee’s independent compensation consultant. The Compensation Committee has the authority to review, approve and revise these recommendations as it deems appropriate.
The Compensation Committee has the authority, in its sole discretion, to retain or obtain, at the expense of the Company, the advice of a compensation consultant, independent legal counsel or other adviser (each, a “compensation adviser”). The Compensation Committee may select a compensation adviser only after taking into consideration all factors relevant to the compensation adviser’s independence from management,
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including the factors specified under Nasdaq Listing Rules. The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any compensation adviser retained by the Compensation Committee. It also has the authority, without further Board approval, to obtain, at the expense of the Company, advice and assistance from internal and external legal, accounting or other advisers as it deems advisable. The Compensation Committee can also form and delegate authority to subcommittees.
Role of Compensation Consultant in Determining Executive Compensation
The Compensation Committee has retained Exequity LLP (“Exequity”) as its independent compensation consultant. A representative of Exequity regularly attends Compensation Committee meetings, participates in discussions regarding executive compensation issues, and, from time to time and in connection with the setting of incentive compensation targets, makes executive compensation recommendations to the Compensation Committee based on available marketplace compensation data for U.S. peer airlines and certain non-airline companies with comparable revenue and other characteristics. Exequity reports exclusively to the Compensation Committee and does not provide any additional services to the Company other than advising the Nominating/Governance Committee with respect to director compensation.
The Compensation Committee maintains a conflict of interest policy governing the relationship with its compensation consultant in order to ensure objectivity and minimize the potential for conflicts of interest in the delivery of executive compensation advice. The policy establishes management’s obligation to report periodically to the Compensation Committee the scope and amount of work being performed by the consultant or its affiliates for the Company. The policy also specifies that the consultant reports directly to the Compensation Committee and has direct access to the Compensation Committee through its Chairman (or in the case of services being provided to the Board, through the Chairman of the Board or, as applicable, the Lead Director). The policy prohibits the consultant from soliciting business from the Company other than work on behalf of the Compensation Committee or the Board and requires the consultant to develop policies and procedures to prevent any employee of the consultant who advises the Compensation Committee or the Board from discussing such services with other employees of the consultant who currently provide other services to the Company or who were providing other services during the prior year. The Compensation Committee has assessed the independence of Exequity pursuant to Nasdaq Listing Rules and concluded that Exequity’s work for the Compensation Committee does not raise any conflict of interest.
Executive Committee
The Executive Committee met four times during 2020 and has a written charter adopted by the Board, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Executive Committee Charter” under the heading “Governance Documents.” The Executive Committee is authorized to exercise all of the powers of the Board, subject to certain limitations, in the management of the business and affairs of the Company, excluding any powers granted by the Board, from time to time, to any other committee of the Board. The Executive Committee can also form and delegate authority to subcommittees.
Finance Committee
The Finance Committee met five times during 2020 and has a written charter adopted by the Board, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Finance Committee Charter” under the heading “Governance Documents.” The Finance Committee is responsible for, among other things: (i) reviewing financial plans and budgets and cash management policies and activities; (ii) evaluating and advising the Board on any proposed merger or consolidation, or any significant acquisition or disposition of assets; (iii) evaluating and advising the Board on business opportunities and financing transactions; (iv) evaluating capital structure and recommending certain proposed issuances of securities and (v) reviewing strategies relating to financial, operating or economic risk. The Finance Committee can also form and delegate authority to subcommittees.
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Nominating/Governance Committee
The Nominating/Governance Committee met four times during 2020 and has a written charter adopted by the Board, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Nominating/Governance Committee Charter” under the heading “Governance Documents.” All of the members of the Nominating/Governance Committee are independent as defined by Nasdaq Listing Rules.
The Nominating/Governance Committee is responsible for, among other things: (i) identifying, evaluating and recommending for nomination individuals qualified to be Board members, other than directors appointed by holders of preferred stock of the Company; (ii) developing, recommending and periodically reviewing the Company’s Corporate Governance Guidelines and overseeing corporate governance matters; (iii) reviewing and overseeing the Company’s succession planning process for executive officers, including the Chief Executive Officer; (iv) overseeing an annual evaluation of the Board and (v) reviewing and making recommendations to the Board with respect to director compensation. In discharging its duties, the Nominating/Governance Committee has the authority to conduct or authorize investigations into any matters within the Nominating/Governance Committee’s scope of responsibilities. The Nominating/Governance Committee can form and delegate authority to subcommittees.
The Nominating/Governance Committee has the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm’s fees and other terms of engagement. It also has the authority, without further Board approval, to obtain, at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisers as it deems advisable.
Public Responsibility Committee
The Public Responsibility Committee met three times during 2020 and has a written charter adopted by the Board, which is available on the Company’s website, ir.united.com, by following the link “Corporate Governance” and selecting “Public Responsibility Committee Charter” under the heading “Governance Documents.”
The Public Responsibility Committee is responsible for oversight of: the Company’s policies, positioning and practices concerning various broad public policy issues, including those that relate to safety (including workplace safety and security); environmental affairs; political and governmental affairs; consumer affairs; diversity, including, without limitation, employee diversity and supplier diversity; civic activities and business practices that impact communities in which the Company does business; and charitable, political, social and educational organizations. The Public Responsibility Committee can also form and delegate authority to subcommittees.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is currently composed of Messrs. Kennedy, Vitale and Whitehurst and Ms. Corvi, each of whom is an independent, non-management director, and no member of the Compensation Committee has ever been an officer or employee of the Company or any of its subsidiaries. None of our executive officers has served as a member of any board of directors or compensation committee of any other company for which any of our directors served as an executive officer at any time since January 1, 2020. In addition, no member of the Compensation Committee had any relationship requiring disclosure under Item 404 of Regulation S-K promulgated by the SEC.
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Certain Relationships and Related Transactions
Review, Approval or Ratification of Transactions with Related Parties
The Board recognizes that transactions involving the Company and related parties present a heightened risk of conflicts of interest. In order to ensure that the Company acts in the best interests of its stockholders, the Board has adopted a written policy for the review and approval of any Related Party Transaction (as defined below). It is the policy of the Company that any Related Party Transaction must be approved or ratified by the Audit Committee or, if the Board determines that a transaction should instead be reviewed by all of the disinterested directors on the Board, by a majority of the disinterested directors on the Board. No director is permitted to participate in the review or approval of a Related Party Transaction if such director or his or her immediate family member is a Related Party (as defined below). In reviewing a proposed transaction, the Audit Committee or the disinterested directors, as applicable, must (i) satisfy themselves that they have been fully informed as to the Related Party’s relationship and interest and as to the material facts of the proposed transaction; (ii) consider all of the relevant facts and circumstances available to them, including but not limited to: the benefits to the Company, the impact on a director’s independence, the availability of other sources for comparable products or services, the terms of the transaction, and the terms available to unrelated third parties or to employees generally and (iii) determine whether or not the proposed transaction is fair to the Company and is not inconsistent with the best interests of the Company and its stockholders.
If the Company enters into a transaction that (i) the Company was not aware constituted a Related Party Transaction at the time it was entered into but which it subsequently determines is a Related Party Transaction or (ii) did not constitute a Related Party Transaction at the time such transaction was entered into but thereafter becomes a Related Party Transaction, then in either such case the Related Party Transaction shall be presented for ratification by the Audit Committee or a majority of the disinterested directors on the Board. If such Related Party Transaction is not ratified by the Audit Committee or a majority of the disinterested directors, then the Company shall take all reasonable actions to attempt to terminate the Company’s participation in the transaction.
As set forth in the policy, a “Related Party Transaction” is a transaction (including any financial transaction, arrangement or relationship (including an indebtedness or guarantee of indebtedness)), or series of similar transactions, or any material amendment to any such transaction, in which:
(a)
the aggregate amount involved exceeds or is expected to exceed $120,000;
(b)
a Related Party had, has or will have a direct or indirect material interest (other than solely as a result of being a director, limited partner or less than 10% beneficial owner (together with all other Related Parties) of another entity that is party to the transaction); and
(c)
the Company is a participant.
For purposes of this definition, a “Related Party” means (i) an executive officer of the Company, (ii) a director of the Company or nominee for director of the Company, (iii) a person (including an entity or group) known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities or (iv) an individual who is an immediate family member (as defined below) of an executive officer, director, nominee for director or 5% stockholder of the Company.
An “immediate family member” includes any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of such person, and any person (other than a tenant or employee) sharing such person’s home.
Related Party Transactions Since January 1, 2020
John Gebo, Senior Vice President and Chief Transformation Officer, of United Airlines, is the spouse of Kate Gebo, Executive Vice President, Human Resources and Labor Relations, of the Company. For 2020,
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Mr. Gebo received aggregate cash compensation of approximately $359,532, consisting of base salary and excess 401(k) cash direct and cash match program payments for management and administrative employees; equity compensation, consisting of time-based and performance-based restricted stock unit awards with an aggregate grant date fair value of approximately $586,779; and other customary officer and employee benefits. Mr. Gebo and Ms. Gebo do not report to, or determine the compensation of, each other.
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Beneficial Ownership of Securities
Certain Beneficial Owners
The following table shows the number of shares of our voting securities owned by any person or group known to us, as of March 31, 2021, to be the beneficial owner of more than 5% of any class of our voting securities.
Name and Address of Beneficial
Owner
Title of Class
Amount and Nature
of Ownership
Percent of
Class(1)
The Vanguard Group(2)
100 Vanguard Blvd.
Malvern, PA 19355
Common Stock
29,978,771
9.3%
PRIMECAP Management Company(3)
177 E. Colorado Blvd.,
11th Floor
Pasadena, CA 91105
Common Stock
28,448,950
8.8%
United Airlines Pilots Master Executive Council, Air Line Pilots Association, International(4)
9550 West Higgins Road,
Suite 1000
Rosemont, IL 60018
Class Pilot MEC Junior Preferred Stock
1
100%
International Association of Machinists and Aerospace Workers(4)
District #141
900 Machinists Place
Upper Marlboro, MD 20722
Class IAM Junior Preferred Stock
1
100%
(1)
For beneficial owners of Common Stock, percentages are calculated based upon 323,577,438 shares of Common Stock outstanding as of March 31, 2021.
(2)
Based solely on a Schedule 13G/A (Amendment No. 8) filed on February 10, 2021, in which The Vanguard Group, on behalf of itself and certain wholly-owned subsidiaries, reported shared voting power for 301,438 shares, sole dispositive power for 29,130,076 shares and shared dispositive power for 848,695 shares.
(3)
Based solely on a Schedule 13G/A (Amendment No. 7) filed on February 12, 2021, in which PRIMECAP Management Company reported sole voting power for 27,822,942 shares and sole dispositive power for 28,448,950 shares.
(4)
Shares of Class Pilot MEC and Class IAM stock elect one ALPA and IAM director, respectively, and have one vote on all matters submitted to the holders of Common Stock other than the election of directors.
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Directors and Executive Officers
The following table shows the number of shares of our Common Stock owned by our directors, director nominees, the named executive officers identified in this proxy statement and all our directors, director nominees and executive officers as a group as of March 31, 2021. The persons listed below have sole voting and investment power with respect to all shares of our Common Stock beneficially owned by them, except to the extent this power may be shared with a spouse, or as otherwise described in the footnotes following the table.
Name of Beneficial Owner
Amount and Nature
of Ownership
Percent of
Class
Directors
Carolyn Corvi 19,098(1) *
Barney Harford 108,890(1) *
Michele J. Hooper 11,737(2) *
Todd M. Insler *
Walter Isaacson 26,497(2) *
J. Scott Kirby (3) 355,484(4) *
James A. C. Kennedy 13,144(1) *
Oscar Munoz (3) 176,046 *
Sito J. Pantoja *
Edward M. Philip 13,799(2)(5) *
Edward L. Shapiro 19,900(2) *
David J. Vitale 22,882(1) *
Laysha Ward *
James M. Whitehurst 25,681(2) *
Named Executive Officers
Brett J. Hart 115,263(6) *
Gerald Laderman 51,199 *
Andrew Nocella 11,024 *
Linda Jojo 21,958(7) *
Directors and Executive Officers as a Group (20 persons)
1,026,843 *
*
Less than 1% of outstanding shares.
(1)
Includes 3,296 shares representing the portion of the director’s 2020 equity award that will vest on May 21, 2021 and will be settled in Common Stock.
(2)
Includes shares units representing non-employee director compensation that the director elected to defer into a share account pursuant to the terms of the Company’s 2006 Director Equity Incentive Plan, as amended and restated (the “DEIP”), including the director’s 2020 equity award, as follows: Ms. Hooper—8,695 share units; Mr. Isaacson—20,144 share units; Mr. Philip—12,972 share units; Mr. Shapro—19,900; Mr. Vitale—7,028 share units; and Mr. Whitehurst—12,974 share units. The share units will be settled in Common Stock within 60 days following the director’s separation from service on the Board. Share units that will be settled more than 60 days following the director’s separation from service are not included.
(3)
Messrs. Kirby and Munoz are also named executive officers.
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(4)
Includes 211,586 options to purchase shares of our Common Stock at $58.69 per share. Includes 5,000  shares of Common Stock held in a trust for the benefit of Mr. Kirby’s children and other relatives in which Mr. Kirby serves as the trustee. Mr. Kirby disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein. Also includes 8,000 shares of Common Stock held in a trust for the benefit of Mr. Kirby’s children in which Mr. Kirby’s brother serves as the trustee. Mr. Kirby disclaims beneficial ownership of these securities.
(5)
Includes shared voting and investment power for six shares of Common Stock.
(6)
Includes 7,173 options to purchase shares of our Common Stock at $77.56.
(7)
Includes 4,782 options to purchase shares of our Common Stock at $77.56.
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2020 regarding the number of shares of our Common Stock that may be issued under the Company’s equity compensation plans.
Plan Category
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
Weighted average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in first column)
Equity compensation plans approved by security holders
Options
689,200 $ 82.12
Restricted Stock Units
3,228,108
Subtotal
3,917,308 $ 82.12(1) 6,298,671(2)
Equity compensation plans not approved by security holders
Total
3,917,308 $ 82.12(1) 6,298,671(2)
(1)
Weighted average exercise price excludes restricted stock units that convert to shares of Common Stock.
(2)
Includes 132,157 shares available under the DEIP and 6,166,514 shares available under the Company's 2017 Incentive Compensation Plan.
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Executive Compensation
Compensation Discussion and Analysis
This Compensation Discussion and Analysis or “CD&A” describes the Company’s 2020 executive compensation program and the decisions that were made by the Compensation Committee (referred to as the "Committee" throughout this Executive Compensation section of the proxy statement) with respect to the named executive officers or “NEOs” whose 2020 compensation information is detailed in this proxy statement. The annual compensation design and award decisions made by the Committee in February 2020 were made in the context of a different financial and operating environment than we face today, or that we faced even soon after those decisions were made. As we started 2020, our United team was building on the momentum generated in 2019 and was focused on continuing execution of our multi-year growth strategy, running a great operation and becoming the airline that customers choose to fly. The COVID-19 virus was then beginning in Asia and had begun disrupting United’s Pacific operations. Although there was uncertainty surrounding the impacts of the virus in early 2020, the compensation design that we established was generally consistent with prior years. However, by March 2020, the Company began dramatic reductions to capacity and the airline industry faced a crisis many times greater than September 11, 2001. The Company is thankful for the U.S. government’s response in quickly passing the CARES Act legislation and backing our industry through the payroll support and loan programs.
The three key pillars that management identified as foundational to the Company’s response to the COVID-19 pandemic were raising liquidity, reducing cash burn and variablizing our cost structure to correlate more directly with travel demand. Management’s early recognition of the magnitude of the COVID-19 crisis and aggressive execution on these priorities were critical in stabilizing the Company’s financial foundation. At the same time, health and safety of both our employees and our customers remained at the forefront and the Company launched a number of initiatives to respond to the coronavirus pandemic and traveler concerns. From the beginning of the COVID-19 crisis through year-end 2020, the Company raised over $26 billion in liquidity and ended 2020 with $19.7 billion in available liquidity,(3) including undrawn capacity under a revolving credit facility and funds available under the CARES Act loan program from the U.S. Treasury. The Company eliminated share buybacks under its share repurchase program and quickly began to offer voluntary separation programs to employees to reduce staffing levels while travel demand was so low.
The COVID-19 pandemic and the resulting crisis for the travel industry resulted in significant reductions to our 2020 executive compensation packages. Our CEO Scott Kirby, our President Brett Hart, and our former CEO Oscar Munoz each waived 100% of his 2020 base salary for portions of 2020 in recognition of the impact of the crisis on the Company’s business and to lead by example. All other officers of the Company and United Airlines also temporarily waived portions of their base salaries and our non-employee directors waived 100% of their cash compensation for the second and third quarters of 2020. As noted above, our 2020 executive compensation design was generally consistent with our incentive structure from prior years with similar performance measures. Our 2020 annual compensation incentives focused on our financial performance (measured by pre-tax income), operating performance (measured by on-time departures), and customer satisfaction (measured by improvement in the Company’s net promoter scores (“NPS”)). No payments were made under our 2020 annual incentive program as a result of the Company’s $7.1 billion 2020 net loss. Our long-term incentives for the 2020-2022 performance period focus on both financial performance (measured by the Company’s absolute pre-tax margin results) and customer satisfaction (measured by the Company’s NPS results relative to specified industry peers). Company results under the 2020 long-term incentives will be evaluated in early 2023, following the end of the three-year performance period.
(3)
Total available liquidity includes $11.7 billion in cash, cash equivalents and short-term investments and $1 billion available under our revolving credit facility, as well as $7 billion available under the CARES Act loan program.
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With reflection on the scale of the COVID-19 pandemic and its impacts on the Company, the travel industry and the world, the Company is focused on a “return to new” and a re-design of our business to make the United brand the preferred choice for airline travel while restoring our balance sheet and implementing smart changes to our cost structure. Given the challenging business conditions and the restrictions of the CARES Act, the Committee is focused on providing an executive compensation program that will retain and reward our management team for its execution of the priorities that will prepare and equip the Company for recovery and future success.
Executive Summary
Below is a summary of our named executive officers; our executive compensation philosophy; our 2020 incentive compensation design; certain 2020 Company highlights related to our incentive compensation program design; and our consideration of our prior stockholder say-on-pay vote.
Named Executive Officers.   This proxy statement provides compensation information regarding (i) each person who served as the Company’s principal executive officer during 2020, (ii) the Company’s principal financial officer, and (iii) the three other most highly compensated executive officers in 2020 determined in accordance with applicable SEC disclosure rules. This CD&A section describes the 2020 compensation elements and decisions related to these NEOs. Our 2020 NEOs were:

J. Scott Kirby, CEO;

Brett J. Hart, President;

Gerald Laderman, Executive Vice President and Chief Financial Officer;

Andrew Nocella, Executive Vice President and Chief Commercial Officer;

Linda Jojo, Executive Vice President, Technology and Chief Digital Officer; and

Oscar Munoz, our former CEO, who transitioned to the role of Executive Chairman of the Board at the Company’s 2020 Annual Meeting.
Scott Kirby was promoted to the role of CEO and Brett Hart was promoted to the role of President on the date of the 2020 Annual Meeting. References in this CD&A to “continuing NEOs” refers to the NEOs other than Mr. Munoz in light of his transition from the role of CEO to Executive Chairman during 2020.
Executive Compensation Philosophy.   Our core executive compensation philosophy continues to be based on achieving the following objectives:

aligning the interests of our stockholders and executives;

linking executive pay to Company performance; and

attracting, retaining and appropriately rewarding our executives in line with market practices.
The foregoing objectives were essential to the 2020 incentive compensation program design approved by the Committee in February 2020. The Committee continues to focus on these objectives in updating our compensation programs to respond to the significant impacts to the Company from the COVID-19 pandemic and enhanced retention risks while also complying with the compensation restrictions required by the CARES Act.
2020 Incentive Compensation Design.
Annual Incentives.   In designing the Annual Incentive Program (“AIP”) for 2020, the Committee focused on metrics linked to our financial performance and customer satisfaction as measured by NPS and on-time
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operational performance. As in prior years, pre-tax income represented the largest percentage (60% of target opportunity) of the 2020 AIP opportunity. The 2020 AIP awards also measured and rewarded performance based on our on-time departures (20% of target opportunity) and annual improvement in our NPS results (20% of target opportunity).
Our 2020 AIP awards measured our operational performance based on our monthly on-time departures, or D:00 performance, relative to industry peers by location. The D:00 metric was utilized because it is viewed as the operational performance measure that has the closest correlation to the satisfaction of our customers. For 2020, our relative D:00 performance was compared on a competing location basis in order to mitigate for performance variations related to location specific characteristics, such as local airport capacity, infrastructure and the air traffic control environment. These competitive set matches also correlate to how we daily manage our business. The 2020 AIP award opportunity also was linked to United customer satisfaction based on NPS survey results. Management and the Committee continue to be enthusiastic about the NPS performance metric, which focuses efforts on earning customer loyalty over time and provides a measure of how customers feel about the United brand. The individual performance modifier was retained in the 2020 AIP design to maintain emphasis on the performance contributions of each individual.
Long-term Incentives.   For the 2020 long-term incentive awards, the Committee approved target opportunities divided between performance-based and time-based awards. The performance-based awards were designed to reward management success with respect to specific performance goals while the time-based awards are intended to enhance the stability of the incentive program. All 2020 long-term incentive awards are stock-settled. In designing the 2020 long-term performance awards, the Committee included a financial metric (60% of the long-term performance target opportunity) and, new for 2020, an NPS metric (40% of the long-term performance target opportunity). The financial portion of the award retained a focus on pre-tax margin goals, similar to prior years, but moved away from measuring our performance relative to the industry to measuring the Company’s absolute pre-tax margin performance. The Company’s relative pre-tax margin performance remains an important focus and is the sole performance metric used for long-term performance awards granted in 2018 and 2019. The customer portion of the 2020 awards measures the Company’s relative NPS results as compared to American Airlines and Delta Air Lines. This metric was selected to further emphasize the Company’s focus on building the United brand into the preferred choice for airline travel.
Certain 2020 Compensation Program Highlights.   Below are certain highlights related to our compensation programs, including compensation actions taken to respond to the coronavirus crisis. For information related to other 2020 Company highlights, including information related to corporate governance and social responsibility, see “2020 Company Highlights” in the introduction to this proxy statement.

core4 decision Framework.   Throughout everything we do, we continue our focus on our core4 decision framework principles of Safe, Caring, Dependable and Efficient. Our core4, which was developed in partnership with our frontline employees, provides our employees with the tools and support they need to provide our customers with the best possible travel experience throughout their journey. Always, safety comes first, and we believe all travelers view safety as the foundational responsibility of the airline industry.
Our core4 decision framework is designed to direct decision-making toward results that support our customers. We are determined to meet and exceed customer expectations so that the United brand is the preferred choice for airline travel. Our 2020 executive compensation program put increased emphasis on customer satisfaction metrics. The coronavirus pandemic and the drastic decline in travel demand in 2020, with airports and airplanes left largely vacant despite reduced capacity, dramatically highlighted appreciation for our customers and our need to satisfy those customers so that we are their preferred choice for airline travel.
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Financial Performance.

Pre-tax Income.   Historically, pre-tax income is the key financial performance metric used to reward our employees, and pre-tax income represented 60% of the target opportunity under our 2020 AIP awards. No payments were made under our 2020 AIP. The Company reported a net loss of $7.1 billion for the full year 2020. In addition, no profit sharing payments were made to employees with respect to 2020.

Pre-Tax Margin.   Our long-term incentive compensation program awards for the 2018-2020 performance period included performance-based restricted stock unit (“Performance-Based RSU”) awards that measured and rewarded performance based on our progress toward closing the pre-tax margin gap versus our industry peers (American, Delta, Southwest, JetBlue and Alaska). For the 2018-2020 performance period, our relative adjusted pre-tax margin improvement (as compared to 2017) exceeded the industry peer group average by 377 basis points representing performance above the stretch level goal (200% of target). The Company’s relative pre-tax margin performance remains an important focus and was the sole performance metric used for long-term awards granted in 2018 and 2019. Our long-term incentive compensation program awards for the 2020-2022 performance period include Performance-Based RSU awards that measure and reward performance based on the Company’s absolute pre-tax margin results (representing 60% of the 2020 long-term performance target opportunity).

Customer Satisfaction.

Net Promoter Scores.   The Company is intently focused on transforming the United brand into the preferred choice for airline travel. In designing the 2020 executive compensation program, the Committee included a focus on NPS results in both the annual and long-term incentive awards. In the 2020 AIP awards, NPS performance was measured based on the Company’s year-over-year improvement in NPS survey results. Under the Performance-Based RSU awards for the 2020-2022 performance period, the Company’s relative quarterly NPS results are measured versus American and Delta. The NPS metric based on our absolute year-over-year improvement represented 20% of the 2020 AIP target opportunity, while the relative NPS metric represents 40% of the 2020 long-term performance target opportunity.
The Company’s 2020 year-over-year improvement in NPS results exceeded the stretch level goal (200% of the NPS target opportunity) (equivalent to achievement of 40% of the 2020 AIP total target opportunity); however, no payment was made with respect to the 2020 AIP awards as a result of the Company’s $7.1 billion 2020 net loss.

Operational Performance.   Our operational performance for 2020 was measured based on relative D:00 performance by location as compared to relevant industry peers. The on-time departure metric was selected because D:00 results are strongly correlated to customer satisfaction. The on-time departure metric represented 20% of the 2020 AIP target opportunity.
The Company’s 2020 operational results were between the entry and target level goal (58% of the operational target opportunity) (equivalent to achievement of 12% of the 2020 AIP total target opportunity); however, no payment was made with respect to the 2020 AIP awards as a result of the Company’s $7.1 billion 2020 net loss.

Response to COVID-19.   In March of 2020, our management team led the industry in recognizing the significance of the coronavirus pandemic and the severe negative consequences for travel
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demand. The Company quickly shifted focus from our initial 2020 strategic plan to managing the crisis. The three key pillars that management identified as foundational to our response were raising liquidity, reducing cash burn and variablizing our cost structure.
From the beginning of the COVID-19 crisis through year-end 2020, the Company raised over $26 billion in liquidity, including $3 billion raised through the largest enhanced equipment trust certificate transaction in aviation history and an industry first loan collateral structure through which the Company obtained a $6.8 billion loan secured by the Company’s MileagePlus® loyalty program. The Company aggressively attacked its cost structure, including reducing capital and operating expenditures, suspending and ultimately ending the share repurchase program and quickly began to offer voluntary separation programs to employees to reduce staffing levels while travel demand was so low. By the fourth quarter of 2020, the Company’s average daily core cash burn was down to approximately $19 million, representing a decrease of approximately 50% compared to the second quarter of 2020.(4)
The 2020 compensation levels of our NEOs were substantially below the 2020 target levels as a result of COVID-19 and the Company’s responses to the crisis. Scott Kirby, our CEO, Brett Hart, our President, and Oscar Munoz, our former CEO, each waived 100% of his 2020 base salary for portions of 2020 in recognition of the impact of the COVID-19 pandemic on the Company’s business and to lead by example. Other officers also waived significant portions of their base salary. In addition, as noted above, no payments were made under our 2020 AIP and the value of our LTI awards, which are linked to our Common Stock, was negatively impacted by the decline in the price of our Common Stock, which was adversely impacted in 2020 as travel demand plummeted due to the impacts of COVID-19.
Our non-employee directors also waived 100% of their cash compensation for the second and third quarters of 2020.

Alignment with Stockholders.   All of our 2020 long-term incentive awards are linked to our stock price performance through potential share price appreciation. The Company’s 2020 long-term incentives include Performance-Based RSU awards and time-vested restricted stock units (“RSUs”). All of the 2020 long-term awards have three-year performance or three-year time-based vesting periods and all of the awards are settled in stock. Our long-term compensation incentives represent a significant part of our NEOs total compensation package and align the financial interests of our executives with our stockholders.
The personal financial situation of our officers is highly linked to the financial success of the Company. In recognition of our officers’ need to manage their personal financial situations in response to the coronavirus pandemic, the Committee has temporarily suspended the Company’s stock ownership guidelines. This suspension is intended to aid in officer retention by offering flexibility to stay with the Company and make personal financial decisions in light of the significant reductions to their 2020 compensation packages, including flexibility to sell Company stock. The Committee has not eliminated the ownership guidelines and will continue to monitor progress toward ownership levels and reconsider activating the guidelines based on the industry financial environment and the
(4)
Cash burn is defined as: Net cash from operations, less investing and financing activities. Proceeds from the issuance of new debt (excluding expected aircraft financing), government grants associated with the Payroll Support Program of the CARES Act, issuance of new stock, net proceeds from the sale of short-term and other investments and changes in certain restricted cash balances are not included in this figure. Core cash burn is defined as: Cash burn, as further adjusted to exclude: debt principal payments, timing of certain payments, capital expenditures (net of flight equipment purchase deposit returns), investments in the recovery and severance payments. See Appendix A for more information regarding core cash burn.
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impacts of officer compensation limits under the CARES Act. Although the guidelines have been temporarily suspended, all of our NEOs were in compliance with our stock ownership guidelines as of March 31, 2021.

Governance.
Diversity, Equity and Inclusion.   The Company is focused on diversity, equity and inclusion and has provided the Committee with annual information related to gender, ethnicity and race pay equality. The Committee is pleased with the results of the Company’s efforts and management has committed to providing the Committee with an annual review of the Company’s initiatives toward gender, ethnicity and race pay equality. In 2020, we increased transparency and accountability by sharing diversity representation data with our employees, announcing that we have achieved and are committed to maintaining near perfect pay equity for employees of all genders, ethnicities and races performing comparable work across our U.S. operations. In 2020, the Company also signed The Board Challenge and committed to adding a second Black board member to the Board of Directors, which we did in February 2021.
Environmental Sustainability.   United is committed to building a sustainable future and in 2020 the Company announced a bold environmental commitment unmatched by any airline; pledging 100% green by reducing greenhouse gas emissions 100% by 2050.
Community Engagement.   The Company believes that every action we take to positively impact our community counts. We focus our engagement on (i) investing in communities where our employees and customers live and work; (ii) lifting up communities impacted by disaster; (iii) breaking down barriers and promoting inclusion; (iv) inspiring the next generation of leaders; and (v) flying towards a more sustainable future.
See “2020 Company Highlights” at the beginning of this proxy statement for other key 2020 actions and initiatives.
Consideration of Prior Say-on-Pay Vote.   A key objective of our executive compensation programs is linking the interests of our executives with the interests of our stockholders, and we place emphasis on maintaining executive compensation programs that address the concerns of our stockholders. Our “say-on-pay” proposal received approximately 96% approval from our stockholders at our 2020 Annual Meeting, which is consistent with the level of support that the Company has received from stockholders on the annual “say-on-pay” vote over the past several years. The Committee considers the 2020 voting result to be an endorsement of our executive pay programs and has not made any changes to the executive compensation programs directly in response to the results of the 2020 say-on-pay vote.
Exequity provides the Committee with regular updates on trends in executive compensation matters. The Committee will continue to consider emerging compensation practices and stockholder feedback, including say-on-pay voting results, as part of its decision-making process. Most recently, the Company’s executive compensation design has been adjusted as a result of impacts of the coronavirus pandemic and to respond to the executive compensation limits required under the CARES Act.
Tight Linkage between Performance and Executive Pay
The compensation opportunities of our executives are directly tied to the performance of the Company as outlined below. The charts below show the allocation of 2020 targeted pay across base salary, annual incentives, and long-term incentives (“LTI”) for the CEO position and the other NEOs. Because the charts illustrate targeted pay, they include the portion of base salary that was not received due to base salary waivers as well as the targeted 2020 annual incentive program (“AIP”) awards even though the 2020 AIP did not pay out.
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CEO February 2020 Target Compensation Chart
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Other NEOs’ February 2020 Target Compensation Chart
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The CEO target compensation chart above is based on Mr. Munoz’s annualized February 2020 target compensation in the CEO role. The other NEOs’ target compensation chart is based on the 2020 target compensation of our remaining NEOs. In each case, the target compensation is calculated based on our 2020 executive compensation program design as approved by the Committee in February 2020. The other NEOs’ target compensation chart does not include special 2020 retention awards granted to Mr. Nocella and Ms. Jojo that are not reflective of their annual target compensation levels.
We believe that the charts above demonstrate our pay-for-performance philosophy as a significant portion of the target opportunities are in the form of variable pay that is directly linked to Company performance and stock price.

Our NEOs sacrificed significant amounts of “fixed” base pay in 2020 through salary waivers that were designed to address the liquidity and cash burn components of the Company’s COVID-19
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response in recognition of the impact of the pandemic on the Company’s business and to lead by example. See “— 2020 Executive Compensation Program—NEO Compensation—COVID-19 Responses” below for information regarding the 2020 salary waivers.

No payment was made under the 2020 AIP as a result of the Company’s $7.1 billion 2020 net loss.

Long-term incentive compensation continues to represent the single largest component of our NEOs’ target compensation, representing approximately 74% of the 2020 target compensation for Mr. Kirby and an average of approximately 68% of 2020 target compensation for our continuing NEOs, which reflects the May 2020 promotional adjustments.

All our 2020 long-term incentive awards will be settled in stock. This design further links executives’ pay with stockholder financial interests.

The 2020 long-term incentive structure includes time-vested RSU and Performance-Based RSU awards. The time-vested awards are intended to provide stability and retentive features to the compensation program. The Performance-Based RSU awards are designed to motivate and reward performance based on financial (absolute pre-tax margin) and customer satisfaction (relative NPS) results. These equity awards place a significant portion of compensation at-risk as the value of both awards fluctuates based on the Company’s stock price performance and the value of the Performance-Based RSUs also depends on the Company’s performance against the pre-established performance goals.

Our 2020 incentive design included a balance of both absolute and relative performance. Absolute performance metrics included the Company’s annual pre-tax income and NPS results and long-term pre-tax margin results. Relative performance metrics included the Company’s annual D:00 results versus key competitors by location and long-term relative NPS results compared to American Airlines and Delta Air Lines.
Our 2020 Executive Compensation Governance Practices
Our executive compensation policies and practices include the following features, which we believe illustrate our commitment to our compensation obligations under the CARES Act, corporate governance “best practices,” and the pay-for-performance principles stated above.

CARES Act Compliance.   As a condition of the Payroll Support Program agreements and the term loan facility under the CARES Act (the "Term Loan Facility"), the Company is subject to restrictions on the amount of total compensation that it can provide to certain employees, including each of the Company’s NEOs. These compensation restrictions continue until the later of (i) March 1, 2023, or such later date as required by the Company’s agreements under the CARES Act, and (ii) one year after full repayment of all loans under the Term Loan Facility (such period is referred to in this CD&A as the “CARES Act restricted period”). As a result of the CARES Act limitations on executive compensation, the Company is prohibited from providing our NEOs the full value of the target compensation levels during the CARES Act restricted period. Management has designed processes to track compensation to comply with the CARES Act limitations and the Committee has considered the CARES Act requirements in making compensation decisions since these requirements became effective. The Company’s compensation programs are designed to comply with the CARES Act while also continuing to support our executive compensation philosophy and objectives.

Multiple performance metrics aimed at stockholder value.   We utilize multiple performance metrics to motivate and reward achievements that we believe are complementary of one another and are designed to contribute to the long-term creation of stockholder value.
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Use of absolute performance goals balanced with consideration of relative performance against peers and use of overlapping performance periods in the long-term incentive program.

Pay is targeted with reference to peer group median levels.

Balanced peer group companies.   For 2020 compensation decisions, the Committee retained the same peer group used for compensation benchmarking in the prior year. Our peer group was carefully selected to include well-run companies in general industry, with a primary focus on airlines, customer service-oriented companies in the travel industry, aerospace and transportation companies; companies of similar revenue size (i.e., 0.5-2.0 times the Company’s revenue); and the largest U.S.-based airlines (regardless of revenue range). We have maintained these same standards for our peer group since 2011. In addition, we consider the compensation practices at our primary airline competitors (American, Delta and Southwest), which companies are included in our benchmarking peer group. See “Compensation Process and Oversight—Benchmarking.”

“Double-triggers” on change in control vesting.   Our long-term incentive awards have “double-trigger” accelerated vesting provisions in connection with a change in control transaction. A “double-trigger” means that acceleration of vesting requires two events: first, a change in control; and second, a qualifying termination of employment, such as an involuntary termination without “cause.”

No change in control tax indemnity.   Company policy prohibits excise tax indemnity for pay related to change in control transactions.

Stock ownership guidelines.   The personal financial situation of our officers is highly linked to the interests of our stockholders and the financial success of the Company. In recognition of our officers need to manage their personal financial situations in response to the coronavirus pandemic, the Committee has temporarily suspended the Company’s officer stock ownership guidelines, but will continue to monitor progress toward ownership levels and reconsider activating the guidelines based on the industry financial environment and the impacts of officer compensation limits under the CARES Act. The suspended officer stock ownership guidelines are based on a multiple of base salary ranging from 6x for the CEO, 4x for the President and 3x for EVPs. Despite the suspension, each of our NEOs was in compliance with the suspended stock ownership guidelines as of March 31, 2021. See “—Other Executive Compensation Matters—Stock Ownership Guidelines.”

Prohibition on pledging and hedging.   We maintain a securities trading policy, which prohibits pledging and hedging Company securities by our officers and directors. See “Corporate Governance—Prohibition on Pledging and Hedging” for additional information on this policy.

“Claw-back” provisions.   We have a claw-back policy that provides the Committee with discretion to require the return, repayment or forfeiture of any annual or long-term incentive compensation payment or award to a covered executive if the Committee determines that the executive engaged in misconduct that resulted in a material violation of (i) federal or state law that caused a material adverse impact to the Company’s financial statements or reputation or (ii) the Company’s Code of Ethics and Business Conduct that caused a material adverse impact to the Company’s financial statements or reputation. All our NEOs are covered by the claw-back policy, which has a three-year look back period from the time of a triggering event. In addition, our programs include claw-back provisions requiring the return of incentive payments in certain financial restatement situations.

Risk mitigation.   Our executive pay programs have been designed to discourage excessive risk-taking by our executives. On an annual basis, the Committee considers the design of our compensation programs and factors that reduce the risk to the Company and discourage excessive risk-taking by program participants.
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Standardized severance policies.   We maintain standardized severance benefits for our officers. These benefits are set forth in severance plans applicable by officer level. The compensation of Mr. Munoz, including his transition and separation benefits, are outlined in his employment and transition agreements.

Annual say-on-pay vote.   We have adopted an annual policy for our say-on-pay vote as recommended by our stockholders at our 2017 annual meeting.

Communication with investors.   We communicate with the investment community regarding our long-term strategy and relative to our operating, financial and customer satisfaction goals. Management and the Board strive to provide our investors with relevant and reliable information to provide transparency regarding our financial performance projections.

Independent Compensation Committee.   The Committee is comprised solely of independent directors and considers and approves all compensation for our Section 16 reporting officers.

Independent Compensation Consultant.   The Committee has retained an independent compensation consultant, who provides services directly to the Committee, and has adopted an “Independent Executive Compensation Consultant Conflict of Interest Policy,” compliance with which is regularly monitored by the Committee.
Philosophy and Objectives of Our 2020 Executive Compensation Program
As noted in the introduction of this CD&A, the annual compensation design and award decisions made by the Committee in February 2020 were made in the context of a different financial and operating environment than we face today, or that we faced even soon after those decisions were made. This section describes the design and intent of those programs based on the context of the environment in which those decisions were made. The Committee continues to focus on these core objectives while also responding to the significant impacts from the COVID-19 pandemic, addressing retention risks and complying with the compensation restrictions required by the CARES Act.
Aligning the interests of our stockholders and officers.   The elements of our 2020 executive compensation program were designed to be aligned with the interests of our stockholders by linking our incentive compensation performance metrics to key indicators of the Company’s financial performance, including adjusted pre-tax income (60% of the total target opportunity of our 2020 AIP awards) and our long-term absolute pre-tax margin performance (60% of our 2020 long-term performance incentive awards). Our design also includes customer-centric measures based on NPS (20% of the total target opportunity of our 2020 AIP awards and 40% of our 2020 long-term performance incentive awards) and D:00 (20% of the total target opportunity of our 2020 AIP awards). We believe our NPS and D:00 incentives align pay with customer satisfaction, enhance our product and ultimately drive financial performance and shareholder value over the long-term. All our 2020 long-term incentive awards are in the form of either Performance-Based RSUs or time-based RSUs, both of which were structured as stock-settled awards and provide a direct link to our stock price.
Linking executive pay to performance.   Our 2020 executive compensation program was designed to align executive pay to successful execution of our strategic plan as well as longer term stockholder value creation. As in prior years, adjusted pre-tax income represented the largest percentage of the 2020 AIP opportunity (60% of the target opportunity). The 2020 AIP awards also utilized two other performance metrics, both of which were intended to link management financial rewards to the satisfaction of our customers. These additional metrics were based on our annual improvement in our NPS results (20% of the target opportunity)and our relative D:00 performance (20% of the target opportunity). In February 2020, the long-term incentive design was equally divided between time-vested awards, which provide stability and retentive features, and performance awards, which motivate performance toward specific Company goals and place a significant portion of management’s target pay in the form of at-risk compensation. The performance-based awards are tied to the
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Company’s absolute pre-tax margin performance and relative NPS results versus industry peers (American Airlines and Delta Air Lines). In recognition of the extreme uncertainty created by the COVID-19 pandemic, and the inability to reliably forecast financial and operational results in the current environment, 2020 long-term incentive awards granted after February 2020 were made exclusively in the form of time-vested awards, including the awards granted to Mr. Kirby when he was promoted to CEO and the awards granted to Mr. Hart when he was promoted to President, both of which occurred in May 2020. All the 2020 long-term incentive awards have a three-year performance or vesting period and will be settled in Common Stock, which provides a direct link between management pay and stockholder value.
Attracting, retaining and appropriately rewarding our management in line with market practices.    We seek to attract world-class executives and to retain our existing executives by setting our compensation and benefits at competitive levels relative to companies of similar size, scope and complexity. Because we believe that our management team has skills that are transferrable across industries, and because we recruit for talent both within the airline industry and from a broad spectrum of leading businesses, we compare the overall compensation levels of our officers with the compensation provided to officers of a benchmarking peer group, as discussed in further detail in “Compensation Process and Oversight—Benchmarking” below. Compensation decisions are also considered and balanced in light of responsibility levels and value added to the organization.
The Committee places a strong emphasis on reviewing and, as appropriate, adjusting executive officer compensation packages based on market conditions and other factors specific to the individual. Internal pay parity also continues to be an important factor in setting officer compensation, particularly incentive target percentage opportunity levels. The 2020 AIP awards included an individual performance modifier to allow the Committee to provide greater rewards and accountability based on individual performance. No amounts were paid under the 2020 AIP awards and the Committee did not consider calculation of the 2020 individual modifier. Compensation and promotion opportunities take into account each individual’s unique skills and capabilities, long-term leadership potential, performance and historic pay levels and the overall scope of responsibilities.
As a result of the CARES Act limitations on executive compensation, the Company is prohibited from providing our executives the full value of the intended compensation levels during the CARES Act restricted period. The Committee is committed to approving compensation programs that attract, motivate and retain the Company’s leadership team while complying with the compensation limits under the CARES Act. The Committee will continue to monitor these requirements.
Compensation Process and Oversight
The Committee maintains a chart of work that outlines the annual calendar of activities to implement the Committee’s responsibilities set forth in the Committee charter. The Committee executes its responsibilities, including actions related to compensation of the named executive officers, with guidance from an independent compensation consultant and analysis, support data and recommendations provided by management. The narrative below describes the processes related to executive compensation matters. The Committee makes all final decisions regarding the executive compensation program design, performance goals and the compensation levels of the Company’s executive officers following its review and consideration of all recommendations and data it deems appropriate.
Independent Compensation Consultant.   During 2020, final executive compensation decisions with respect to the named executive officers were made by the Committee with input from Exequity, the Committee’s independent compensation consultant. Exequity provides the Committee with background materials, including preparation of the benchmarking study described below, and participates in Committee meetings to support the Committee’s executive compensation decision-making process and to respond to questions. Exequity also assists the Committee in performing an annual compensation risk assessment of the Company’s compensation programs. Exequity reports directly to the Committee, and the Committee has the sole authority to retain and
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terminate Exequity and to review and approve Exequity’s fees and other retention terms. The Committee has adopted an “Independent Executive Compensation Consultant Conflict of Interest Policy” pursuant to which Exequity is required to provide the Committee with regular reports on any work that it performs for the Company. During 2020, Exequity did not perform any work on behalf of the Company other than the executive compensation services provided to the Committee and director compensation advice provided to the Nominating/Governance Committee. For additional information concerning the Committee, including its authority and the independent compensation consultant policy, see “Corporate Governance—Committees of the Board—Compensation Committee” above. The Committee has assessed the independence of Exequity pursuant to SEC rules and the Nasdaq Listing Rules and concluded that Exequity’s work for the Committee does not raise any conflicts of interest.
Management Analysis and Support.   The CEO attends Committee meetings and provides input to the Committee with respect to compensation of the management team other than himself. During 2020, both Messrs. Kirby and Munoz attended the Committee meetings and had opportunities to provide input regarding individual performance assessments. The Company’s Executive Vice President, Human Resources & Labor Relations and members of the human resources team prepare background and supporting materials for Committee meetings. As appropriate, the CFO and other members of the Company’s management team participate in discussions with the Committee relating to the Company’s financial plan, customer centricity initiatives and results, operational performance, strategic initiatives and proposed performance goals under the executive compensation program. Members of the Company’s internal audit group provide special reports to the Committee outlining the review of procedures and calculations relating to the degree of achievement of performance goals and payout of incentives for completed performance periods. Management’s annual planning process involves preparation of annual financial forecasts, capital expenditure budgets and the Company’s annual business plan. Based on the Company’s 2020 planning process and the financial budget approved by the Board, management developed and proposed performance goals under the 2020 incentive compensation programs. Exequity reviewed these proposals in light of compensation trends, benchmarking and compensation risk factors and provided guidance to the Committee. The Committee made all final decisions regarding the 2020 executive compensation program design, performance goals and the compensation levels of the Company’s executive officers, including base salary and incentive award opportunities, following its review and consideration of all recommendations and data it deemed appropriate. The Committee regularly holds executive sessions to discuss executive compensation practices without members of management present.
Benchmarking.   We recruit and we compete to retain executives not only from within the airline industry, but also from across a broad spectrum of leading businesses. In preparation for the Committee’s annual compensation decision process, Exequity conducts an analysis of United’s compensation levels in comparison to pay levels among companies in a custom peer group to help identify the competitive positioning of United’s executive pay. The analysis covers United’s Section 16 reporting officers and compares United’s positions to peer company benchmarks in terms of: base pay; target annual bonus opportunity; target total cash (base pay plus target annual incentive); long-term incentives; and target total direct compensation (target cash plus long-term incentives).
The Committee believes that the airline industry does not have enough size-relevant peers to identify reliable ranges of competitive market pay for our top executive talent. Accordingly, our benchmarking peer group represents a cross-section of the relevant airline peers and other comparably sized companies that the Committee believes are representative of the competitive talent market for United. The following primary factors are considered in identifying the most appropriate peer companies that are size-relevant (generally 0.5x-2.0x the Company’s revenue) for compensation benchmarking purposes: the labor market for United’s executive talent, including a focus on geographic proximity; well-run companies in general industry, with a primary focus on the three most size-relevant U.S.-based airline peers (American, Delta and Southwest), other transportation companies, non-airline travel companies with a customer-centric dynamic and aerospace and defense companies. Using these factors as a guide, no changes were made to the composition of the benchmarking peer group for 2020
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compensation decisions. The competitive benchmarking analysis presented to the Committee in December 2019, in advance of the February 2020 compensation decisions, included the 17 comparator companies noted below.

3M Company

General Dynamics Corporation

American Airlines Group Inc.

Honeywell International Inc.

The Boeing Company

Marriott International, Inc.

Carnival Corporation

Northrop Grumman Corporation

Caterpillar Inc.

Raytheon Company

Cummins Inc.

Southwest Airlines Co.

Deere & Company

Union Pacific Corporation

Delta Air Lines, Inc.

United Parcel Service, Inc.

FedEx Corporation
Exequity utilized two pay data sources to determine the competitive position of United’s executive pay relative to the peer group: (i) publicly disclosed pay information from the peer companies’ most recent proxy statements (in most cases, the 2019 proxy statement, reflecting 2018 pay data) was used for pay comparisons involving the named executive officers and (ii) private survey compensation data was used for positions below the proxy officer level.
In the December 2019 benchmarking pay study, the 17 companies in the peer group had median annual revenue of approximately $36.2 billion and the Company’s annual revenue at the time of the review was estimated at approximately $43 billion, which ranked at the 65th percentile relative to the peer group. The benchmarking report provides comparisons of the named executive officers’ pay against publicly disclosed pay data from the peers on a size-adjusted basis (derived by regressing peer group compensation against revenue size at United’s estimated revenue). Regression analysis is common in pay benchmarking and is used to predict what the peers likely would deliver in target pay at a company the size of United, based on the trend in the relationships between pay and revenue size among the peers. Given that United’s market capitalization was at the low end relative to the peer group, the pay study also provided results relative to raw pay medians (i.e. without adjustment for revenue size).
The benchmarking review compares total compensation opportunities for our executives to the market median (50th percentile) of our peer group. The Committee references both the size-adjusted median pay levels among the peers and the raw median pay levels. The report also provides details regarding pay mix in terms of the allocation of base pay, annual incentives and long-term incentives as percentages of total target compensation for both the Company and the peer group. Total target compensation for our benchmarking purposes means the sum of base salary, target annual incentives and target long-term incentives. Special awards and peer company awards that appear to have been intended to cover multiple years are annualized for the benchmarking comparison and pay level comparisons are considered both with and without these additional awards. As is customary in these types of pay studies, retirement benefits were not included in the benchmark comparison.
The Exequity benchmarking process compares the Company’s executive pay by position to the most similarly situated executive roles among the peer organizations. Data availability is greater for the CEO and CFO positions and pay comparisons for these roles were made solely against the CEO and CFO positions among the peer companies. United’s top roles other than the CEO and CFO vary significantly in nature from the peer’s proxy reported executives, so direct head-to-head role matching presents challenges in terms of identifying statistically significant peer data. For the remaining three proxy officers without a direct benchmark role comparison, Exequity considered matching roles based on pay rank within the proxy and with reference to other officer positions to provide a market reference that is aligned with the way the Company values these roles and to extrapolate pay trajectories across roles. The pay study review with the Committee includes specific discussion and consideration of the compensation packages provided at the airline peers, with primary focus on the size-relevant airlines (Delta and American).
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The private survey benchmarking review considered information from Equilar’s Executive Compensation Survey, which provides information for top executive roles at each of the participating peer companies. Within United’s peer group, 11 of the 17 peer companies participated in the Equilar survey, with median annual revenue of approximately $37.4 billion. Benchmarks based on Equilar’s data were used for positions below the proxy officer level. As an additional point of reference, revenue-adjusted medians for companies in broad general industry were also provided to the Committee based on survey data from Willis Towers Watson’s 2019 General Industry Executive Compensation Survey-U.S. Where available, pay information from selected additional airlines is also provided by Exequity for reference purposes but is not included in the core statistical analysis.
The compensation information for our peer group is one factor utilized in setting total compensation for our executives. The Committee balances the benchmarking results with additional factors, such as each executive’s experience, knowledge, skills, roles and contributions to the Company, as well as consideration for internal pay parity among our executives. In selected cases in which relevant pay information for a specific role is available from our primary airline peers (Delta and American), we reference that data as a supplemental benchmarking input, in addition to the combined data from the full peer set. The Committee reviews all these relevant factors but does not apply a specific weighting to the various factors. In addition, in the case of executives who are recruited to join the Company, the Committee references the executive’s pay at his or her prior employer to facilitate recruitment of top caliber executives. For executives promoted to a new role, the Committee considers opportunities to provide a gradual increase in the compensation package to the market median level over time and with growth in the position.
Tally Sheets.   Comprehensive tally sheets covering each of the Company’s Section 16 reporting officers are provided to the Committee annually in advance of the meeting at which incentive compensation performance targets and award level opportunities are set and at which compensation levels and annual incentive awards are considered and decisions are made. The tally sheets provide a summary for each executive of total targeted and actual compensation levels over a multi-year period, an accumulated summary of outstanding awards, and estimated total payments under alternative separation scenarios. These tally sheets allow the Committee to make prospective pay decisions that are informed by compensation opportunities and earnings for past periods.
2020 Executive Compensation Program
The section provides discussion and analysis of:

Our 2020 NEO compensation, including target compensation levels and special retention awards;

The impact of the Company’s COVID-19 responses on our NEOs’ target compensation;

Compensation changes approved in May 2020 upon Scott Kirby’s promotion to CEO and Brett Hart’s promotion to President;

The components of our 2020 incentive compensation design; and

Long-term performance incentive awards granted in 2018 that vested at the end of 2020.
NEO Target Compensation.    The 2020 salary and incentive compensation award levels were considered and approved by the Committee through the compensation process described above. This included reference to the benchmarking data prepared by and reviewed with Exequity in December 2019, reference to peer compensation levels at American and Delta, and consideration of internal pay parity. The 2020 target compensation opportunities for the NEOs that were approved by the Committee in February 2020 are summarized in the table below.
The 2020 actual compensation levels of our NEOs were substantially below the target levels summarized in the table below as a result of (i) material decreases in base salary as a result of salary waivers and the elimination
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of approved salary increases, (ii) zero payment of the 2020 AIP awards, and (iii)  decline in the value of the 2020 LTI awards, all of which will be settled in Common Stock, which declined during the year as travel demand plummeted due to the impacts of COVID-19. See “—COVID-19 Responses” below.
February 2020 NEO Target Compensation Levels
Annual Incentive Program
Long-Term Incentive Program
Name
Salary($)
(%)(1)
($)
(%)(1)
Time
Vested
RSUs
($)
Performance
Based
RSUs
($)
Total Target
Compensation
($)
J. Scott Kirby(2)
900,000 150 1,350,000 700 3,150,000 3,150,000 8,550,000
Brett J. Hart(2)
775,000 106 821,500 375 1,453,125 1,453,125 4,502,750
Gerald Laderman
725,000 106 768,500 375 1,359,375 1,359,375 4,212,250
Linda Jojo
700,000 106 742,000 375 1,312,500 1,312,500 4,067,000
Andrew Nocella
700,000 106 742,000 375 1,312,500 1,312,500 4,067,000
Oscar Munoz(3)
1,250,000 200 2,500,000 840 5,250,000 5,250,000 14,250,000
(1)
The annual and long-term incentive program target compensation levels are calculated as a percentage of the NEO’s base salary.
(2)
In May 2020, in connection with their promotions to CEO and President, respectively, the Committee approved certain compensation changes for Messrs. Kirby and Hart. With respect to Mr. Kirby, the Committee approved an annual base salary of $1,000,000, a target AIP opportunity equal to 250% of base salary and a target LTI opportunity equal to ten times base salary. With respect to Mr. Hart, the Committee approved a target AIP opportunity equal to 175% of base salary and a target LTI opportunity equal to 7.5 times base salary. See “—Promotions to CEO and President Roles” below.
(3)
The above table reflects the annualized CEO target compensation for Mr. Munoz. Under the terms of the Transition Agreement between the Company and Mr. Munoz, during the period May 20, 2020 through the date of the Company’s 2021 Annual Meeting, Mr. Munoz will receive a base salary of $2,000,000. The agreement also specified that his 2020 annual incentive award would be pro-rated through the 2020 Annual Meeting date. Mr. Munoz. is not entitled to any annual or long-term incentive awards after 2020. The 2020 compensation levels for Mr. Munoz were agreed under the terms of his Transition Agreement entered in December 2019 and, in approving Mr. Munoz’s compensation in February 2020, the Committee did not make any changes to those compensation terms. See “—Transition Agreement with Mr. Munoz” below.
In setting the pay levels of the Company’s continuing Section 16 officers in February 2020, the Committee considered each executive’s 2019 pay level; trends in executive compensation, which indicated that pay increased in 2019 and was anticipated to grow at a somewhat higher rate in 2020; and continuing gaps in pay levels for certain of the Company’s officers as compared to market median compensation of officers at similar positions in the peer group, as reflected in the December 2019 benchmarking review. As in prior years, incremental 2020 pay adjustments were primarily focused on long-term incentives. The Committee uses base salary levels and salary adjustments to recognize individual roles and responsibilities. Other factors considered in establishing the 2020 pay levels were a focus on maintaining internal pay relationships (to reflect appropriate relative positioning) and incentive target level consistency (to support teamwork).
The February 2020 target compensation levels for Messrs. Kirby and Hart were established by the Committee with recognition that Mr. Kirby would succeed to the role of CEO and Mr. Hart would succeed to the role of President following the Company’s 2020 Annual Meeting. Although the compensation related to these new roles was anticipated to be considered and approved in May 2020, the Committee approved a February
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2020 salary increase for Mr. Kirby to $900,000 (previously $875,000) and increased the opportunity under his annual incentive from 125% to 150% (calculated as a multiple of base salary).
With respect to Messrs. Hart and Laderman and Ms. Jojo, the Committee kept salary and AIP opportunities at the 2019 target levels and increased the LTI target opportunity from 350% to 375% (calculated as a multiple of base salary). Each of these officers were recognized as strong performers and, as noted above, the long-term incentive is the Committee’s preferred compensation component to adjust to implement pay changes in order to better align pay mix with market comparisons. With respect to Mr. Nocella, the Committee acknowledged that his role had expanded to include sales and was anticipated to further expand in 2020. As such, the Committee approved a 2020 salary increase for Mr. Nocella to $700,000 (from $625,000) (to be effective April 1, 2020) and an increase in his LTI target opportunity from 300% to 375% (calculated as a multiple of the new 2020 base salary). The salary change for Mr. Nocella that was approved in February 2020 to be effective in April 2020 was not implemented in 2020 as a result of the Company’s aggressive liquidity and cost cutting initiatives. See “—2020 COVID-19 Responses” below.
2020 Special Retention Awards.   In reviewing the 2020 compensation for the NEOs, in addition to annual target compensation levels, the Committee also considered the need to address retention risks related to Ms. Jojo and Mr. Nocella. In light of these concerns, one-time long-term incentive awards were considered and approved by the Committee. The Committee approved a special time-vested and stock-settled RSU award for Mr. Nocella in the amount of $2,000,000 and for Ms. Jojo in the amount of $1,000,000. To encourage retention, these awards vest in one-third increments on the third, fourth and fifth anniversary of the grant date, subject to the NEO’s continued employment through the vesting date. The retention awards are not included in the above table because these are one-time special awards that are not reflective of the annual target compensation levels. See “—Grants of Plan Based Awards Table” for further information.
COVID-19 Response.   The 2020 intended target compensation levels of our NEOs as approved by the Committee in February 2020 and described above were significantly and adversely impacted by the coronavirus pandemic and the Company’s responses to improve liquidity and reduce cash burn. The impacts of the Company’s COVID-19 responses on our NEO compensation are described below.
In late February 2020, following news of the spread of COVID-19 to Italy, management of the Company began providing regular updates to the Board to address the impacts of the virus on previous forecasts. By mid-March, the velocity of travel decline had accelerated rapidly, and the Company had begun aggressive efforts to enhance liquidity and reduce costs.
Messrs. Kirby, Hart and Munoz each waived portions of their base salaries in recognition of the impact of the COVID-19 pandemic on the Company’s business and to lead by example. Mr. Kirby waived 100% of his base salary from March 10, 2020 through the end of 2020. Beginning on March 16, 2020, Mr. Hart waived 50% of his base salary in his role as the Company’s Executive Vice President and Chief Administrative Officer and, in connection with his transition to the role of President, waived 100% of his base salary from May 20, 2020 through the end of 2020. Mr. Munoz waived 100% of his base salary from March 10, 2020 through June 30, 2020. For the remainder of our officer group, salaries were reduced by 50% beginning March 16, 2020 and then by 25% through the third quarter of 2020. In addition, all salary increases that were scheduled to become effective on April 1, 2020 were suspended, including the salary increase for Mr. Nocella. The total salary amounts waived during 2020 were as follows (including reference to the percent of total annual salary that was waived for 2020): Mr. Kirby—$784,470 (82%); Mr. Hart—$545,737 (70%); Mr. Laderman—$151,057 (21%); Mr. Nocella—$130,224 (21%) (not including the salary increase that was not implemented); Ms. Jojo—$145,852 (21%); and Mr. Munoz—$473,520 (28%). The actual salary earned by each of our NEOs for 2020 are set forth in the 2020 Summary Compensation Table below.
In addition, no payments were made under our 2020 AIP. The target level of the 2020 AIP awards approved in February 2020, for which no payments were made, are set forth in the table above, with the target AIP amount shown for Mr. Nocella calculated based on the 2020 salary level that was not implemented. The
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2021 Proxy Statement

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February 2020 AIP target opportunities for Messrs. Kirby and Hart do not reflect the increased opportunities related to their 2020 promotions, as described below.
Promotions to CEO and President Roles.   On May 21, 2020, in connection with the expanded responsibilities of Mr. Kirby upon his transition to the role of CEO and of Mr. Hart upon his transition to the role of President, the Committee approved certain compensation changes for both officers. The Committee approved an annual compensation package for Mr. Kirby with an annual base salary of $1,000,000, a target AIP opportunity equal to 250% of base salary and a target LTI opportunity equal to ten times base salary. With respect to Mr. Hart, the Committee approved an annual compensation package with an annual base salary of $775,000 (which was unchanged from his prior role), a target AIP opportunity equal to 175% of base salary and a target LTI opportunity equal to 7.5 times base salary. These compensation changes were largely not reflected in 2020 compensation paid to Messrs. Kirby and Hart since Messrs. Kirby and Hart both waived 100% of their base salaries though the end of 2020, the Company did not make any payout with respect to the 2020 AIP awards and the new LTI opportunity was reduced and pro-rated based only on the portion of the year that each executive would serve in his new role (as further described in the following paragraph).
The table below sets forth the annualized target compensation levels for Messrs. Kirby and Hart in connection with their promotions to CEO and President, respectively. As a result of the CARES Act limitations on executive compensation, the Company is prohibited from providing our NEOs the full value of their target compensation levels during the CARES Act restricted period.
Annual
Incentive Program
Long-Term
Incentive Program
Total Target
Compensation
Name
Salary ($)
(%)
($)
(%)
($)
($)
J. Scott Kirby
1,000,000 250 2,500,000 1,000 10,000,000 13,500,000
Brett J. Hart
775,000 175 1,356,250 750 5,812,500 7,943,750
Based on these new compensation levels, and consistent with its customary practice, the Committee approved and granted LTI awards in May 2020 in the amount of $2,285,000 for Mr. Kirby and $1,800,000 for Mr. Hart. The amounts of these awards reflect the offset of the regular LTI awards received in February 2020 and represent the new LTI opportunity only for the portion of the year that the officers would serve in their new roles. These incremental promotion LTI awards were in the form of time-vested and stock-settled RSUs that vest ratably over a three-year period based on continued service on February 28, 2021, 2022 and 2023.
Mr. Kirby’s base salary and target compensation level approved by the Committee for his service as the Company’s CEO are lower than the base salary and target compensation level for Oscar Munoz’s service as the Company’s CEO immediately prior to Mr. Kirby’s appointment. In addition, the base salary and target compensation level approved by the Committee for Mr. Hart for his service as the Company’s President are lower than the base salary and target compensation level for Mr. Kirby for his service in the role of President. In addition, the role of Executive Vice President and Chief Administrative Officer was not replaced upon Mr. Hart’s transition to the role of President.
Transition Agreement with Mr. Munoz.   On December 4, 2019, the Company entered into a Transition Agreement with Mr. Munoz (the “Transition Agreement”) reflecting the terms and conditions of the transition and Mr. Munoz’s employment. The Transition Agreement provided for Mr. Munoz to continue to serve as CEO and a director of the Company through the 2020 Annual Meeting. During this period, Mr. Munoz’s employment was governed by the terms and conditions of his employment agreement, dated December 31, 2015, with the Company and United Airlines (as amended, the “Employment Agreement”). The Transition Agreement contemplates that Mr. Munoz will serve as Executive Chairman and remain a director of the Company until the date of the 2021 Annual Meeting. During the period beginning on the date of the 2020 Annual Meeting and continuing through the 2021 Annual Meeting (the “First Transition Period”), the Transition Agreement provides that Mr. Munoz will receive a base salary at an annual rate of $2,000,000 and will generally continue to be eligible to participate in senior executive-level employee benefit programs. If any payment had been earned, Mr. Munoz’s
2021 Proxy Statement
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TABLE OF CONTENTS
 
2020 AIP award would have been prorated for his executive service through the 2020 Annual Meeting. Mr. Munoz is not entitled to receive any annual incentive compensation with respect to any year after 2020 or any grants of long-term incentive compensation following the 2020 Annual Meeting. As of the date of the 2021 Annual Meeting, Mr. Munoz will transition from his role as Executive Chairman and as a director of the Company, and will continue as a non-officer employee until March 1, 2022 (such period, the “Second Transition Period”). During the Second Transition Period, Mr. Munoz will receive a base salary at an annual rate of $360,000 and will be eligible to participate in those employee benefit programs that are generally available to non-officer employees of the Company.
2020 Incentive Compensation Design.   The table below sets forth the key components of United’s 2020 incentive compensation programs as approved by the Committee in February 2020.
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2020 Annual Incentive Program Awards.   The graphic below outlines the key elements of the 2020 AIP awards.
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No amounts were paid under the Company’s 2020 AIP as a result of the Company’s $7.1 billion 2020 net loss.
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