The fallout at United Airlines from the embarrassing incident of a passenger being forcibly removed from a plane continues.
CEO Oscar Munoz will not receive a planned promotion to also take on the role as Chairman of the Board of Directors, parent company United Continental Holdings said in a regulatory filing on Friday.
Having dual roles as CEO and Chairman of the Board would have given Munoz greater control of the company. Already a board member, Munoz would have taken the chairmanship role in 2018.
In the regulatory filing, United said Munoz agreed to eliminate the clause in his contract in which he would assume the chairman's role and another clause that would have allowed him to resign as CEO if he did not assume that position.
"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 proxy statement. "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 current members of the Board will now choose an independent Chairman.
[READMORE]READ MORE: United Now Asking For Bumping Preference At Check-In[/READMORE]
Munoz and United made a disaster out of an already disastrous situation following the April 9 incident aboard Flight 3411 before it took off from Chicago to Louisville. When United needed four seats to accommodate crew members who needed to be in Louisville the following morning, it asked for volunteers to be rebooked. When none volunteered, it used computer-generated selection criteria to involuntarily bump four passengers. Dr. David Yao refused, United called Chicago Aviation Police, and the rest is infamous history made worse by a viral video seen more than eight million times.
United botched its first response from a public relations spokesperson, but Munoz made it worse with his own tone-deaf statement in which he barely apologized to the victim but rather showed remorse for having to "re-accommodate" passengers.
Perhaps that is why United also said on Friday that its compensation program for Munoz and other top executives at the airline will be more closely tied to "directly and meaningfully progress in improving the customer experience."
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