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United CEO will not become company's chairman in wake of scandal

Posted at 4:53 PM, Apr 21, 2017

NEW YORK (CNNMoney) -- United Airlines says its CEO, Oscar Munoz, will not take broader control of the company as previously planned, after a high profile incident that damaged the company's reputation.

The airline's parent company, United Continental Holdings, said in a public filing Friday that Munoz asked that his employment agreement be changed to remove terms that would have made him chairman of the board of directors.

Munoz is currently a member of the board, and he wmas scheduled to take on the role of chairman at the company's 2018 annual stockholder meeting.

"The Board believes that separating the roles of Chief Executive Officer and Chairman of the Board is the most appropriate structure at this time," according to the filing. "Having an independent Chairman of the Board is a means to ensure that Mr. Munoz is able to more exclusively focus on his role as Chief Executive Officer."

The company also revealed Friday that a new 2017 compensation program for Munoz, along with that of other executives, will be more closely tied to improved customer satisfaction. United said it wants "directly and meaningfully progress in improving the customer experience."




As part of Friday's disclosure, United also released its annual compensation figures for its top executives. Munoz received a total of $18.7 million, including $6.8 million related to replacing his equity stake that he held when he was president of railway CSX.

United declined to comment.

The changes come on the heels of a public relations disaster in which a passenger was dragged, bloodied and screaming, off an aircraft after he refused to give up his seat for commuting crew members.

The company's first response, attributed to Munoz, did not go over well. He issued a statement that apologized only for "having to re-accommodate ... customers."

A second statement called the victim, Dr. David Dao "disruptive and belligerent." And finally a third statement from Munoz reversed course, decrying the situation and calling it a "truly horrific event," and offered a direct apology to Dao.

Dao's lawyers have said he plans to file a lawsuit.

Munoz took the top spot at United in 2015 during trying times for the company. He was hired as CEO from outside the company after its former chief, Jeff Smisek, was forced to resign due to a scandal involving the Port Authority of New York and New Jersey.

Shortly after he took the reins, Munoz suffered a heart attack and underwent a heart transplant, which kept him out of the office for two months.

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