Scott Kirby
United Airlines HoldingsAbout Scott Kirby
Scott Kirby is Chief Executive Officer of United Airlines Holdings, Inc. (UAL) since May 2020 and a director since 2020; he previously served as President at UAL (2016–2020), American Airlines (2013–2016), and US Airways (2006–2013) . He holds an MS in Operations Research from George Washington University and a BS in Computer Science and Operations Research from the U.S. Air Force Academy; age 57 . Under his leadership, UAL delivered 2024 pre-tax margin of 7.3%, adjusted pre-tax margin of 8.1%, diluted EPS of $9.45, adjusted diluted EPS of $10.61, total operating revenue of $57.1B (+6.2% YoY), operating cash flow of $9.4B, and free cash flow of $3.4B .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| United Airlines Holdings, Inc. | CEO | 2020–present | Led “United Next” execution, improved operational reliability and profitability; record volumes and product upgrades . |
| United Airlines Holdings, Inc. | President | 2016–2020 | Drove strategic growth planning and financial strategy pre-CEO . |
| American Airlines Group/American Airlines | President | 2013–2016 | Senior leadership at a major U.S. carrier . |
| US Airways | President | 2006–2013 | Airline operations and strategy leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| CVS Health Corporation | Director | 2023–present | Current public company directorship . |
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base Salary | $1,175,000 | Annualized base rate increased to $1,200,000 effective April 1, 2024 . |
| All Other Compensation | $203,498 | Includes perquisites such as flight benefits with capped tax indemnification, cybersecurity services, insurance, executive physical, tax/financial services, parking . |
Performance Compensation
Short-Term Incentive (STI) – 2024 Design and Outcome
| Metric | Weight | Target Definition | Outcome (Company-level) | CEO Payout |
|---|---|---|---|---|
| Adjusted EBITDA Margin vs industry | 33% | UAL 2024 Adjusted EBITDA Margin relative to revenue-weighted peer average | Part of formulaic 175% total payout | $5,141,223 |
| Net Promoter Score (NPS) | 33% | Customer-based brand preference measure; stratified methodology | Included in 175% payout; targets set to be challenging | See above |
| Operational Excellence | 33% | On-time departures (Customer D:00), mishandled baggage rate, seat cancel rate | Included in 175% payout | See above |
| CEO STI Mechanics | Value |
|---|---|
| Base used (blended) and Target % | 250% of base; blended methodology |
| Formulaic Payout | 175% of target |
| Actual STI Paid (2024) | $5,141,223 |
Long-Term Incentive (LTI) – Regular Annual Equity (2024 awards)
| Instrument | Weight | Key Metrics & Targets | Vesting | Notes |
|---|---|---|---|---|
| Performance-Based RSUs (PBRSUs) | 50% of LTI | 40% Absolute Adjusted EPS: Entry $5, Target $9–$11, Stretch $13; 40% Relative Adjusted Pre-tax Margin: Entry −0.5%, Target +0.5–1.0%, Stretch +2%; 20% Strategic goals (environmental/people/sourcing); $8B liquidity hurdle at end of 3-year period; +0% to +50% Relative TSR modifier vs Dow Jones U.S. Airlines Index if TSR positive and >+2 pts | 3-year cliff; annual goal setting each year across the cycle | |
| Time-Based RSUs | 50% of LTI | Continued service | One-third on Feb 28, 2025/2026/2027 | Aligns retention with shareholder value . |
| CEO 2024 Target LTI Values | Amount |
|---|---|
| PBRSUs (target grant value) | $6,900,000 |
| Time-Based RSUs (grant value) | $6,900,000 |
| Total Target Equity (2024) | $13,800,000 |
Retention LTI Awards (July 25, 2024)
| Component | Target Value | Metrics | Tranche Vest Dates | Payout Range |
|---|---|---|---|---|
| CEO PBRSU Retention Award | $10,000,000 | Adjusted EPS (first two tranches, four quarters ending 6/30/2025 and 6/30/2026) and Relative Adjusted Pre-tax Margin vs peers (third tranche, four quarters ending 6/30/2027) with EPS condition | July 25, 2025/2026/2027 | 0% to 133% per tranche |
Pay-versus-performance and historical vesting
| Item | Result |
|---|---|
| 2022 PBRSU 3-year award vesting | Vested at 122% of target; components included CASM-ex improvements, United Next goals, strategic indicators, EPS, and relative Adjusted Pre-tax Margin . |
| Pay Mix & At-Risk Emphasis | 93% of CEO target compensation is at-risk; 76% delivered as LTI equity; stock ownership guideline 6x base salary . |
Multi-Year CEO Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $1,000,000 | $1,075,000 | $1,175,000 |
| Bonus | — | — | $3,000,000 |
| Stock Awards (grant-date fair value) | $8,666,624 | $10,705,744 | $24,405,267 |
| Non-Equity Incentive Plan Compensation | — | $6,636,815 | $5,141,223 |
| All Other Compensation | $129,978 | $155,740 | $203,498 |
| Total | $9,796,602 | $18,573,299 | $33,924,988 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 1,037,886 shares; includes vested options and trust holdings; less than 1% of outstanding shares . |
| Options detail | 159,321 vested options @ $58.69; 101,265 vested options @ $110.21; 67,510 unvested options @ $110.21 vest within 60 days of March 24, 2025 (from a December 2019 premium-priced grant with multi-year vesting schedule) . |
| RSU vesting cadence | Time RSUs vest one-third annually on Feb 28, 2025/2026/2027; PBRSUs vest at end of 3-year cycle subject to performance and liquidity . |
| Ownership guidelines | CEO must hold shares equal to 6x base salary; executives must retain 50% of net shares until compliant; all NEOs in compliance . |
| Hedging/pledging | Prohibited for officers/directors; no shares pledged or in margin accounts . |
Employment Terms
| Provision | Terms |
|---|---|
| Severance (non-CIC) | 2x base salary + target annual bonus (with continuation benefits for 24 months, outplacement); retirement-eligible treatment applies to awards as described; no excise tax gross-ups . |
| Change-in-control (CIC) | Double trigger required for equity/time-vested RSU acceleration; PBRSU performance goals deemed satisfied at target at CIC, payment requires continued employment or qualifying termination; stock options vest on qualifying termination; no excise tax gross-up; payments reduced to avoid excise tax unless better net after-tax at full amount . |
| Restrictive covenants | Non-solicitation, non-competition (non-compete not applied for involuntary termination without cause/good reason), no-hire; confidentiality and non-disparagement; release required for severance . |
| Flight benefits | Lifetime flight benefits upon termination other than for cause; taxable (no tax indemnification post-termination) . |
| Potential Payments (illustrative as of 12/31/2024) | Resignation/Retirement | Death | Disability | Involuntary Termination w/o Cause or Good Reason | CIC with Qualifying Termination |
|---|---|---|---|---|---|
| Cash Severance | — | — | — | $8,400,000 | $8,400,000 |
| Equity Acceleration (Time RSUs + PBRSUs value assumption) | — | $49,397,507 | $49,397,507 | — | $83,772,908 |
| Cash Transformation Incentive Award | — | $3,000,000 | $3,000,000 | — | $3,000,000 |
| Continuation Benefits | — | — | — | $49,341 | $49,341 |
| Life Insurance Benefit | — | $3,000,000 | — | — | — |
| Outplacement | — | — | — | $25,000 | $25,000 |
| Flight Benefits | $128,936 | — | $128,936 | $128,936 | $128,936 |
Board Governance
- Role and tenure: Director since 2020; currently serves on Executive and Finance Committees; not independent as an employee .
- Structure: UAL separates Chairman and CEO roles; independent Chair (Edward M. Philip) since 2021; no Lead Independent Director needed while Chair is independent; executive sessions each quarterly meeting .
- Attendance: Each incumbent director attended ≥75% of board and committee meetings in 2024; board met nine times; committees met as disclosed .
- Director compensation: As an employee-director, Kirby receives no board compensation .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay support: 96.2% approval in 2024; average 92% support over the last 3 years .
- Program refinements aligned to investor feedback: Increased weighting of financial metrics in LTI to 80% (EPS and pre-tax margin), added a relative TSR modifier to PBRSUs, and maintained liquidity hurdle to strengthen pay-for-performance .
Compensation Peer Group (for benchmarking, 2024 review)
- Airlines: American Airlines, Delta Air Lines, Southwest Airlines .
- Industrial/general industry peers (size-relevant): 3M, Boeing, Carnival, Caterpillar, Cummins, Deere, FedEx, General Dynamics, Honeywell, Marriott, Northrop Grumman, Union Pacific, UPS .
Compensation Committee & Consultant
- Committee: Independent directors; chaired by James M. Whitehurst; 7 meetings in 2024 .
- Consultant: Exequity LLP retained as independent advisor; assessed as independent; supports peer selection and program design; no conflicts; also advises on director compensation to Nominating/Governance Committee .
Risk Indicators & Red Flags
- Clawback policy: Mandatory recovery aligned with SEC/Nasdaq rules plus discretionary recovery for significant compliance violations (3-year lookback) .
- Hedging/pledging prohibition: Officers/directors prohibited from speculative trading, hedging/pledging; none pledged .
- No option repricing without shareholder approval; no excise tax gross-ups on CIC .
- Perquisite tax indemnification for flight benefits during employment (capped) may be viewed as shareholder-unfriendly by some, but quantum is modest relative to total comp .
Performance & Track Record
- 2024 operational and financial highlights: Record customer volumes; strongest adjusted pre-tax margin among most peers (second highest among U.S. competitors); improved safety metrics; infrastructure investments; product and app enhancements; expanded training centers; Starlink partnership .
Equity Compensation & Vesting Schedules (Specific Dates)
- Time-based RSUs: Vest one-third on Feb 28, 2025; Feb 28, 2026; Feb 28, 2027 .
- 2024 PBRSU tranche: Annual goals set for 2024, 2025, 2026; vest at end of 2026 subject to $8B liquidity and TSR modifier (if positive and >+2 pts) .
- Retention LTI Award: Tranches vest July 25, 2025; July 25, 2026; July 25, 2027, subject to EPS/margin tests .
Investment Implications
- Alignment: Heavy weighting to EPS and pre-tax margin in LTI with liquidity and relative TSR safeguards supports shareholder value focus; robust clawbacks, ownership rules (6x salary), and hedging/pledging bans strengthen alignment .
- Retention: The July 2024 PBRSU retention awards for the CEO and NEOs indicate industry-wide retention vulnerabilities; awards are performance-based rather than guaranteed, mitigating pure retention cost risk .
- Governance: Separate Chair/CEO roles, high Say-on-Pay support, independent compensation oversight, and investor-responsive program design reduce governance risk and pay inflation concerns .
- Watch items: Continued use of tax indemnification on flight benefits during employment is a minor optics risk; monitor outcomes on relative TSR modifier and liquidity thresholds to assess realized LTI payouts vs market performance .