The board of directors of Chicago-based United Continental Holdings, the parent company of United Airlines, has for the second time in two years amended CEO Oscar Munoz’s contract to deny him the role of board chairman.
Per an agreement between Munoz and the board reached in April 2016, following a proxy fight over the board’s makeup, Munoz was slated to become chairman in 2018.
Munoz, who became United’s CEO in September 2015, was originally supposed to become chairman in 2017. Now, in the aftermath of the April 9 passenger bumping incident - and Munoz’s initial widely criticized response to passenger David Dao being violently dragged from United Express flight 3411 - Munoz and the board have reached a new agreement “leaving future determinations related to the chairman position to the discretion of the board,” according to an April 21 filing by United with the US Securities and Exchange Commission (SEC).
The move effectively postpones indefinitely Munoz adding board chairman to his title. Former Air Canada CEO Robert Milton is currently the non-executive chairman of United’s board.
In United’s SEC filing, the company indicated it “believes that separating the roles of chief executive officer and chairman of the board is the most appropriate structure at this time,” adding, “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 board also believes that an independent chairman of the board can effectively manage the relationship between the board and the chief executive officer.”
By: Mark Nensel & Aaron Karp