Mark Frissora, chairman and CEO of Hertz, has stepped down amid pressure from several activist shareholders, with Carl Icahn foremost among them.
A statement released by the car rental company says Frissora has stepped down from his role due to ‘personal reasons’. He is set to be replaced as CEO on an interim basis by Brian MacDonald, currently Hertz’s head of equipment rental – a department expected to be spun off in the next year. Linda Fayne Levinson, currently the independent lead director, will take up Frissora’s duties as non-executive chairman.
‘During Mark’s tenure, Hertz has transformed from a single on-airport car rental brand to a world-leading rental car company with a portfolio of brands that reach multiple consumer and business segments both on and off-airport,’ writes Levinson in the same statement. ‘We appreciate his strong commitment to Hertz.’
The news comes shortly after Icahn, a veteran investor of several activist campaigns, revealed he held a large stake in Hertz. Other big activist names, including Third Point, Jana Partners and Fir Tree Partners, also part-own the company, and are believed to have prompted Hertz’s one-year ‘poison pill’ shareholder rights plan, which was implemented in December 2013. Hertz told existing investors that ‘unusual and substantial activity’ in the trading of its shares prompted the plan.
In August Icahn reported that he held an 8.5 percent stake worth more than $470 mn in the car rental company and planned to pressure it into making wholesale management changes, following several high-profile stumbles. Hertz’s board and management needed tackling over ‘shareholder value, accounting issues, operational failures and underperformance relative to its peers,’ Icahn wrote on his website, while his own ‘lack of confidence’ in the company’s executives was also a worry.
Frissora oversaw a period in which Hertz made several brand acquisitions, starting with the addition of long-term car and truck leasing to the firm’s offerings in 2011 and the purchase of Dollar Thrifty a year later. Since then, however, Hertz shares have improved by less than 20 percent while competitors, such as Avis, have seen stock values climb nearly three times higher.
