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Apr 23, 2018

United Airlines CEO skipped bonus last year after PR fiasco

United Airlines CEO Oscar Munoz

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United Continental Holdings Inc.’s (UAL.N) top executive is forgoing a bonus for last year and its chairman is stepping aside.

Chief executive officer Oscar Munoz asked the board not to award him the payout for 2017, the airline said in a regulatory filing Monday. The announcement came a year after United sparked a public-relations fiasco by dragging a passenger from a plane. The carrier’s image took another hit this year when a dog died in its care.

“I felt it was important to send a message about the culture of accountability and integrity that we are building here as a United team,” Munoz said in a letter to employees about the compensation decision. “We had some incredible successes in 2017 but also some setbacks.”

United’s chairman, former Air Canada CEO Robert Milton, won’t stand for re-election to the board so he can focus on other interests. Director Laurence Simmons, who joined United’s board in 2010, also plans to leave.

The board plans to select a new independent chairman to succeed Milton. Last year, after the dragging incident, United’s directors reversed a previous plan to name Munoz as head of the oversight council.

Milton joined the board in March 2016 and became non-executive chairman the following month as United resolved a proxy fight begun by two activist shareholders, Altimeter Capital Management and PAR Capital Management.