Position in the organizational hierarchy definitely does not qualify as a shield for accounting errors, and this is a fact that Mark Frissora has realized when made to hand over the mantle of Chairman-cum-CEO of Hertz Global Holdings Inc (NYSE:HTZ). Although the top-ranking executive has quoted personal reasons for giving up his high-profile portfolio, the talk on the street has cited mismanagement on financial and operational fronts as motive underlying this decision.
Having accepted the responsibility in January, 2007, just prior to Hertz Global Holdings Inc (NYSE:HTZ)’s first IPO, Frissora played an instrumental role in acquiring another rental company named Dollar Thrifty Automotive Group Inc in 2012. Not only did this spell a good run for the company ahead but also ensured that there was one competitor less in the market. However, over a period of time the company failed to accrue as many benefits as it should have and on the contrary faced rising investor discontent over the last few months.
Things came to head when Fir Tree, which owns 13.8 million shares of the company, made a plea to Hertz Global Holdings Inc (NYSE:HTZ)’s management to replace Frissorabecause in addition to being dissatisfied of the way he was running the company, it suspected him of financial wrong-doing too. This led to an inquiry and unfortunately for the company it turned out that financial records over the past three years have been prone to misappropriation. As a direct consequence, Hertz Global Holdings Inc (NYSE:HTZ) did not file its guidance for 2014 and has also not declared first and second quarter results owing to the data being unreliable.
All of this had a negative bearing on the company’s share value which slipped by 0.6% over the past few months thus allowing its competitor to gain by an impressive 64%. However, things did pick up subsequent to the news pertaining to the change at the helm as share value rose by 4% in the morning New York time to end up at $29.60.
In the view of this transformation, the latest update from Hertz Global Holdings Inc (NYSE:HTZ) has stated Brian P MacDonald as the interim CEO Linda Fayne Levinson has been nominated to occupy the chair of independent non-executive.
Thisarticle has been written by Vinita Basu.