Shareholders filed a lawsuit against United Airlines for giving former CEO JeffreySmisek a generous severance package after learning that his decision to initiate anunprofitable route was in response to a threat by the Port Authority of New York andNew Jersey. The board of directors refused a clawback arguing doing so would harm thecompany's ability to recruit and retain talent.

As a compensation professional, what would you recommend? What are the critical factors in this case? What could have been done differently?