NEW YORK (TheStreet) -- Shares of American Airlines (AAL) - Get Report were sliding in early morning trading on Tuesday as the Fort Worth-based company's president Scott Kirby leaves to become president of rival airline United Continental (UAL).
American Airlines' COO Robert Isom will serve as the company president, American Airlines said in a statement late yesterday.
Kirby left with more than $13 million in severance pay and was not bound by an employment contract or noncompete agreement, so he was free to make the move to United, according to the Wall Street Journal.
American wasn't obligated to give Kirby severance pay. It's atypical for a company to give an employee severance pay when they move to a competitor, the Journal added.
He will now report to the Chicago-based airline's CEO Oscar Munoz, who previously held both positions, United said in a statement. Munoz has been trying to strengthen the company's management as he faces pressure to improve its financial and operational performance.
Shares of United were advancing in early morning trading on Tuesday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates American Airlines Group as a Hold with a ratings score of C-. The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its respectable return on equity which the team feels is likely to continue. At the same time, however, it also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.
You can view the full analysis from the report here: