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Q: United Airlines Board of Directors ( Answered 5 out of 5 stars,   0 Comments )
Subject: United Airlines Board of Directors
Category: Business and Money
Asked by: halejrb-ga
List Price: $5.00
Posted: 06 Oct 2002 19:36 PDT
Expires: 05 Nov 2002 18:36 PST
Question ID: 73417
According to the New York Times, United Airlines employees own 55% of
the company's stock.  But they apparently only get 3 members on the
board of directors.  Since they are the majority stockholders, why
can't they vote in a complete new board of their choosing?
Subject: Re: United Airlines Board of Directors
Answered By: mwalcoff-ga on 06 Oct 2002 21:29 PDT
Rated:5 out of 5 stars

All shares of stock are not created equal.

There are eight types of UAL stock, each of whose holders can elect
zero to 5 members of the board.

Regular stock holders elect five board members. The three holders of
Class I stock elect four board members. The three holders of Class SAM
(salaried workers and management) stock elect one member. The pilots'
union and the machinists' union -- sole holders of Class IAM and Class
MEC stock, respectively -- each elect one member to the board.

The remaining three classes of stock are all ESOP -- owned by the
employees. Holders of those classes of stock do not get to elect a
board member.

This set-up was part of the deal when the airline's employees bought a
majority stake in UAL in 1994. Changing it would require a change to
the company's charter.

All of the above information comes from the company's 2002 proxy
statement, available at

I hope this answer meets your needs. If not, please request

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UAL 1994
halejrb-ga rated this answer:5 out of 5 stars
An excellent answer.  However, to paraphrase "Animal Farm" some shares
are more equal than others.  This makes a mockery of the employees
"majority stake" in the company.

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