United CEO Munoz will not chair board in 2018 following passenger furor

Alana Wise

(Adds United response to Senate panel, background on Munoz and

incident)

NEW YORK, April 21 (Reuters) - United Continental Holdings

Inc said on Friday Chief Executive Oscar Munoz will not

become chairman in 2018, under an amendment to his employment

agreement approved after an uproar over the treatment of a

passenger.

In a reversal of his earlier employment agreement, Munoz has

opted to leave "future determinations related to the Chairman

position to the discretion of the Board," United said in a U.S.

Securities and Exchange Commission filing.

The company also said it would revise its 2017 executive

compensation to more directly tie incentives to improvements in

customer satisfaction. In 2016, Munoz made $18.72 million.

"United's management and the Board take recent events

extremely seriously, and are in the process of developing

targeted compensation program design adjustments to ensure that

employees' incentive opportunities for 2017 are directly and

meaningfully tied to progress in improving the customer

experience," the filing said.

Earlier this month, a United passenger, Dr. David Dao, was

dragged from his seat off a parked plane at Chicago's O'Hare

International Airport bound for Louisville, Kentucky, to make

room for crew members.

The scene was captured on video by fellow passengers and

showed Dao bloodied and disheveled in the incident.

Dao's attorney said his 69-year-old client had incurred a

significant concussion, broken his nose and lost two front teeth

in the altercation with airport security, and said Dao would

likely sue the airline.

Munoz, a former railroad executive who took over United in

2015, had already been pressured by activist investors to

improve the airline's performance, including in customer

relations. In April 2016, United agreed with a group of

investors to install airline industry veteran Robert Milton as

non-executive chairman.

In initial statements following the incident, Munoz and

United did not apologize to Dao for the way he had been treated,

instead describing him as "disruptive and belligerent."

Before being hauled from the flight, Dao, who emigrated from

Vietnam in the 1970s, repeatedly accused the airline of

discriminating against him for being ethnic Chinese, according

to fellow passenger Tyler Bridges who was traveling back home

from Japan.

The incident, and the company's response, sparked global

outrage. Social media users across the United States, Vietnam

and China called for a boycott of the carrier.

United said on Friday it had asked a U.S. Senate panel for

an extra week to answer detailed questions about the incident.

Munoz wrote that he was "personally committed to putting proof

behind our promise" in United's commitment to reforms.

Committee leaders said in a joint statement that getting

answers about what happened and how to prevent a recurrence was

a "priority" and any further delay was "unacceptable."

(Reporting by Alana Wise; Additional reporting by David

Shepardson; Editing by Richard Chang)