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.'"
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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.
Coronavirus impact
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.
* Check out this interview with Kern's predecessor, Mark Okerstrom, one of his last, recorded at The Phocuswright Conference 2019.
Expedia's Mark Okerstrom on SEO, capital and diversity (PhocusWire @ Phocuswright Conference 2019)