Caesars Names Ex-Hertz Chief Frissora to Succeed LovemanChristopher Palmeri
Caesars Entertainment Corp. named former Hertz Global Holdings Inc. Chief Executive Officer Mark Frissora as its new CEO to succeed Gary Loveman, three weeks after the casino company put its biggest unit in bankruptcy.
Frissora, who left the car-rental agency in September, will join the company immediately as CEO-designate, become a member of the board and take over as CEO on July 1. Loveman will end his term as CEO on June 30 and remain chairman, according to a statement on Wednesday.
Loveman said it was his decision to step down. He is credited with expanding the company’s Total Rewards loyalty program, now widely copied in the industry, and establishing Caesars’ online gaming business. Loveman failed to gain access for Caesars in Macau, now the world’s biggest gambling market, and oversaw the $30.7 billion buyout of the company in 2008, as the industry entered its worst slump in history.
“After 12 years as CEO, Caesars has accomplished more than what we could have imagined when I arrived in 1998,” he said in the statement. “Now, with the company in the midst of a formal restructuring of one of its subsidiaries and a merger between entities, the time is ripe for a transition.”
Loveman, 54, will continue to oversee the restructuring of the company’s largest division, Caesars Entertainment Operating Co., which filed for bankruptcy court protection last month.
Caesars is controlled by the private-equity groups Apollo Global Management and TPG Capital.
Frissora, 59, joins at a time when Caesars, the largest owner of casinos in the U.S. is challenged on several fronts. The company is trying to reduce debt at the operating company, and merge the parent again with Caesars Acquisition Co., a unit that went public in 2013. Caesars is battling some creditors who have sued the company, saying its restructuring efforts have stripped assets from them.
Caesars is also coping with increased competition and a slowdown in spending by consumers in many of its markets. The company’s revenue shrank to $8.5 billion in 2013 from $10.1 billion five years earlier.
Frissora will receive an annual base salary of $1.8 million with a target bonus of $2.7 million, according to a regulatory filing. The new CEO is also entitled to use the company plane, get six months of free housing while he relocates and associated costs and benefits.
If he’s fired without cause, his severance deal includes $6.3 million in cash, according to the filing.
Frissora joined Hertz as CEO in 2006, after its own leveraged buyout. He supervised an expansion of the business beyond airports as well as the 2012 acquisition of Dollar Thrifty Automotive Group Inc.
He left after the company said its audit committee had found errors in its accounting and after activist investor Fir Tree Partners called for his replacement. The company didn’t file reports for 2014 and disavowed the previous three years of results. Before that, Frissora was CEO of Tenneco, the auto-parts maker.
After Caesars completes its bankruptcy court restructuring, the company will likely sell assets such as its non-core properties in Las Vegas, according to Chris Jones, an analyst with Union Gaming Group. Frissora’s experience courting business customers at Hertz could aid Caesars’ convention business, he said.
Loveman is the rare former college professor to run a major U.S. company. An economist who taught at Harvard Business School, he developed strategies for customer relationship management and consulted with Caesars before joining the business full time. Loveman grew the business through acquisitions and new casinos in Ohio and Maryland. He also focused the company on non-gambling amenities in Las Vegas.
“We respect Gary’s desire to begin transitioning the management of the company at this time,” Marc Rowan, founder of New York-based Apollo, and David Bonderman, founder of Fort Worth, Texas-based TPG, said in a statement. “We look forward to his continuing role overseeing the restructuring.”
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