Peter Kern is the new CEO of Expedia Group and Eric Hart is chief financial officer.
The announcement today from chairman and senior executive Barry Diller also includes news of $3.2 billion in new capital – $2 billion coming as debt financing and $1.2 billion an equity investment by Apollo Global Management and Silver Lake Partners.The equity is non-voting and non-convertible preferred stock. Expedia Group is also ceasing dividends until “the business rebounds.””We have one mandate – to conserve cash, survive, and use this time to reconstruct a stronger enterprise to serve the future of travel,” Diller says.“We are unable to make any predictions as to when travel will rebound but we emphatically believe that it will, for….’if there’s life, there’s travel.'”
Expedia Group has been without a CEO and CFO since Mark Okerstrom and Alan Pickerill resigned December 4 over disagreements with the board on strategy.Kern has been vice chairman of the board since 2018 and in December joined Diller to oversee the company’s operations.“In these last five months, he has shown outstanding leadership in all aspects of the business, first in a wide reorganization and then dealing with the impact of the corona crisis on our business,” Diller says.“He now knows all aspects of the business, and we are truly lucky that he is now available to devote his full time to Expedia.” Most recently Kern was CEO of Tribune Media.Hart has been with Expedia for 11 years and has served as acting CFO since Pickerill’s resignation.
Diller has also outlined changes the company is making to deal with the impact of COVID-19. Diller, Kern and members of the board will forgo cash compensation for the remainder of the year. Senior executives – known as the Travel Leadership Team – will take a 25% reduction in salary for the rest of 2020. The company is also implementing furloughs and reduced work-week programs for “select volume-based teams with limited work right now.” “Our intention is that impacted employees would retain Expedia healthcare benefits coverage while on furlough or reduced hours, and we will cover the employee premiums in the case of furloughs,” Diller says.The company is also suspending 401K matching contributions and offering a voluntary three-day work week for parents, caregivers and employees with personal needs. These furloughs and reductions will be continue through August 31, “when we will re-evaluate the situation” according to Diller. “Since the first of the year, this Company has gone through multiple challenging stages. First, the reorganization that resulted from the management change, which has now been mostly completed – we were fortunate we got to this prior to the crisis. Second, and ongoing, dealing with the crisis itself, cutting our costs everywhere, and today announcing additional financing, which, while the usual strain, was led flawlessly by Messrs. Kern and Hart,” Diller says.“And, to come in the next months, an intensified process to recalibrate our organization for the future. We’ve learned such an enormous amount over these almost five months – we’re going to put that to great and definitive use as we come out of this period. I believe we’ll have a far finer operation coming out of this crisis than going into it.
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