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In wake of passenger-dragging incident, United CEO won't automatically become chairman

United CEO Oscar Munoz will not become chairman of the company's board next year as planned, the latest move taken by the airline to contain fallout over a passenger-dragging incident at O'Hare International Airport earlier this month.

In Friday regulatory filings, the Chicago-based airline said Munoz, whose employment agreement had specified he would become chairman in 2018, will leave that decision to the discretion of the board. Munoz initiated the amendment to the agreement, according to the filing.

Robert Milton has been United Continental Holdings' nonexecutive board chairman since April 2016.

"The board believes that separating the roles of Chief Executive Officer and Chairman of the Board is the most appropriate structure at this time," the company said in its annual 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."

Also in the proxy, United outlined changes to its 2017 executive compensation program, tying it more closely to customer satisfaction.

"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 and in the necessary cultural and process change in support of this goal," the company said in its filing.

Munoz received more than $18.7 million in total compensation in 2016, according to the filing, of which $1.2 million was salary. He received $3.4 million in incentive compensation and $13.8 million in stock awards, including a $6.8 million bonus tied to his 2015 hiring.

On Thursday, United Airlines and the Chicago Department of Aviation asked for more time after missing their deadline to respond to a Senate inquiry into the forcible removal by aviation security officers of Dr. David Dao from a Louisville-bound flight.

Leaders of the Senate transportation committee requested answers to a number of pointed questions over the handling of the incident by Thursday. Both United and the Aviation Department missed the deadline, asking for an extra week in separate letters to the committee.

"We're disappointed that neither United Airlines nor the Chicago Department of Aviation has yet provided substantive answers to the straightforward questions we asked about the forcible removal of a passenger on April 9, 2017," the committee said Friday in a news release. "Getting answers for the public about what happened and what can be done to prevent such an incident from happening again is a priority for the members of our committee. We find any further delay in getting necessary answers unacceptable."

Four senators, including committee Chairman John Thune, R-S.D., and Sen. Bill Nelson, D-Fla., the committee's ranking Democrat, sent letters to the airline and Aviation Department on April 11 seeking detailed explanations of the incident.

Dao was one of four passengers bumped from the United Express flight to make room for four airline employees after the airline failed to find volunteers to take a later flight.

United CEO Munoz's letter to the committee Thursday reiterated his apologies to Dao and all of the passengers aboard the flight who endured the "appalling" incident, which he called a "humbling learning experience." He also asked that the response deadline be pushed back until April 27 to "ensure accuracy and thoroughness" while the airline conducts an internal review.

"We understand the committee's strong interest in this incident and its oversight role," United spokeswoman Megan McCarthy wrote in an email Friday. "In our preliminary response to the committee, we outlined efforts underway to better serve our customers and requested a brief extension in responding to the committee's detailed questions in order to ensure accuracy and thoroughness."

The Chicago Department of Aviation's response letter from Commissioner Ginger Evans, sent Thursday but inadvertently dated April 27, asked for an extension until Wednesday.

"We are currently conducting a thorough review of the incident," Evans wrote. "As our reviews and interviews are ongoing, we respectfully request an extension ... to ensure the completeness of our response."

Dao's forceful removal by three aviation officers, who yanked him from his seat and dragged him bloodied through the aisle, was captured on now-viral video by fellow passengers. The three aviation officers remain on paid leave during the investigation.

"I'm proud that Ginger suspended three individuals involved in the situation," Mayor Rahm Emanuel said Friday at an unrelated news conference. "I told her there's nothing sacrosanct and nobody is sacrosanct. Give it to us fresh, and we'll take every corrective action we need to take."

United already has said it would never again ask a law enforcement officer to remove passengers from flights, "unless it is a matter of safety and security," and will require United crews traveling as passengers to book at least 60 minutes before departure.

Munoz, a former railroad executive, was hired as CEO in 2015 to replace Jeff Smisek, who resigned amid a federal corruption probe. Henry Meyer was named nonexecutive chairman at the time.

Milton replaced Meyer as nonexecutive chairman last April to resolve a shareholder dispute and proxy fight.

Twitter @RobertChannick

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