ESTERO – Mark Fields, former president and CEO of Ford Motor Co., has been named interim CEO of The Hertz Corp., the third person to hold the struggling rental car giant title in the past two years and the seventh in the past six years.
Fields, 60, immediately took over according to a filing with the Securities and Exchange Commission. Paul Stone, who had held the role last year, assuming the role just days before the company filed for bankruptcy, will remain president and chief operating officer. Stone also lost his seat on the Lee County-based company’s board of directors.
Fields, who joined Hertz’s board of directors in June as the company emerged from bankruptcy, will remain in office as the company seeks a permanent replacement for Stone. According to the SEC filing, he will earn $ 62,500 per week as base salary and receive stock options.
Hertz, in a press release, presented the move as “part of a vision for an all-new Hertz that combines iconic brand strength and global fleet management expertise with new technologies and innovations. charting a dynamic new path for travel, mobility and the automotive industry.
In reality, this is just the latest leadership upheaval for a company that just emerged from bankruptcy four months ago and is looking to regain its foothold after restructuring.
And for Stone, it’s a public step up the corporate ladder after leading the business through the bankruptcy process and the first days of its new life.
Stone was named President and CEO of Hertz just four days before the company filed for Chapter 11 bankruptcy on May 22, 2020. He replaced then-President and CEO Kathryn Marinello on May 22, 2020. May 18. At the time, he was vice president and director of retail operations at Hertz, and in the new position guided the company through its darkest days.
In the press release, the company says it will work hand in hand with Fields to “ensure a strong focus on operations and customer service excellence.”
“The Hertz Board of Directors is deeply grateful to Paul for his service to the company during the restructuring process,” said Greg O’Hara, Chairman of the Board of Hertz. “We were delighted that Paul decided to continue working with Hertz in a management position. “
According to the SEC filing, if Stone stays with Hertz until March 1, he will receive a lump sum payment of $ 2 million. In addition to the payment, Stone will now continue to receive his salary of $ 1 million per year and will remain eligible for an annual bonus of 140% of his salary. The company also waived a clawback condition with a $ 1.4 million retention bonus it received in August.
Three other executives received retention bonuses, but for lesser amounts.
Stone was also asked to sign non-compete and confidentiality agreements, according to the SEC filing.
Fields, who is also a senior advisor at TPG Capital, served as President and CEO of Ford for approximately three years. Ford was under pressure from shareholders to replace Fields, according to reports released in Detroit at the time of his departure, as the company’s shares fell 40% during his tenure, despite the company’s profitability.
He is now taking the helm of a company, even in the short term, which faces the reality of transforming into an industry that sees not only changing consumption habits and continuing travel restrictions, but also vehicle shortages.
O’Hara said in the press release that “Fields’ vast experience in automotive and technology will be essential as we remake Hertz for the future.”
“We are building from a renewed position of strength to reimagine the future, and Mark’s continued leadership on the board and his role for the time being as interim CEO are the next important steps in getting us there.” . ”
Bankruptcy, while disruptive, allowed the company to emerge on a healthier financial footing.
Hertz emerged from bankruptcy on June 30 with $ 5.9 billion in capital, reduced debt, a new ticker symbol and a new board of directors. It is now traded on the over-the-counter market, under the symbol HTZZ.
He left bankruptcy court protection with around $ 5 billion in debt, including all of his European debt, and with a $ 2.8 billion line of credit and $ 7 billion in inventory financing. vehicles.
Investment firms Knighthead Capital Management, Certares Opportunities and Apollo Capital Management are among those providing capital to fund the exit plan.
But analysts said at the time that without a change in the business model, it would be difficult for Hertz to survive in the long term. And this despite the fact that the company blamed most of its problems on the slowdown in tourism due to the pandemic, even though it was the only car rental giant with identical issues to report.
According to its original Chapter 11 filing, Hertz had $ 25.8 billion in assets and $ 24.3 billion in debt as of March 31.
Court records show that from March 21 until the day the company filed for bankruptcy on May 22, 2020, daily bookings fell 90% as sales of its retail lots almost disappeared and millions of debt payments are due.
To help offset the slowdown, the company consolidated leases at non-airport sites in the United States and Europe, reduced the purchase of new vehicles and reduced the number of employees.
According to court records, “management of labor costs” began in March 2020 with time off. The hope was that they would be temporary, but by April it had become clear to Hertz that the shutdown “would not be a temporary disruption of operations.”
As of May 22, when the company filed for bankruptcy, 21,000 employees had been affected by the moves and approximately 14,400 had permanently lost their jobs.