United CEO Munoz gives up automatic chair appointment

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Has the recent turbulence taken its toll on United Continental chief executive Oscar Munoz?

Mr Munoz — whose airline became the centre of controversy recently over the forcible removal of a passenger from a crowded flight — will not automatically assume the role of chairman of the company’s board in 2018 as previously planned, the company announced on Friday, alongside plans to more directly link employee bonuses to customer experience.

The company said in a regulatory filing on Friday that his employment agreement had been amended earlier this week to strip out a provision appointing him board chair at the company’s 2018 shareholder meeting.

The change was initiated by Mr Munoz, the company said. The filing did not say Mr Munoz would not take the role, but rather that “future determinations related to the chairman position” would be left to the “discretion of the board.”

Mr Munoz — whose total compensation in 2016 was valued at $18.7m, the bulk of which was in stock, according to a separate filing on Friday — has drawn criticism during the dragging scandal for his efforts at apologising. At the beginning of the controversy, he started off defending airline staff before offering more unconditional mea culpas after the scandal lit up social media across the world.

United previously announced it was launching an internal review of its policies in the wake of the incident, which left Dr David Dao with a broken nose, concussion and two lost teeth after being dragged from an overbooked United flight by airport police in Chicago. It is due to announce the results of that review by April 30. The company has said it will also discuss those findings at an upcoming hearing before the US House of Representatives’ transportation committee.

The company said in a regulatory filing on Friday that it took “recent events extremely seriously” and was in the process of developing targeted tweaks to its compensation programme design to make sure incentive pay opportunities for 2017 were “directly and meaningfully tied to progress in improving the customer experience and in the necessary cultural and process change in support of this goal.”

While the initial bonus metrics for 2017 tied to financial and operating measures will still apply, bonuses for the year “will be more thoroughly linked to demonstrable progress toward improvements in the customer experience and the implementation of necessary cultural and process changes across United.”

The controversy has also weighed on United’s stock, which has fallen 2.7 per cent since the controversy was first stirred on April 10 after video of the incident went viral.

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