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Florida-based Hertz Global Holdings Inc. (NYSE:HTZ) announced Tuesday that its chief executive officer John Tague has been replaced by Kathryn V. Marinello, who will officially serve as the franchisor's president and chief executive officer the day after observed New Year's Day, Tuesday, January 3, 2017.
Hertz has had three CEOs in just over two years to take the helm of the nearly 10,000 franchised and company-owned retail locations throughout the world. The change comes after Hertz' latest round of dropping share prices.
"I look forward to partnering with Hertz employees as we work to earn sustained industry leadership for the benefit of our shareholders, customers and team members," said Marinello about her new responsibilities.
Marinello comes to the helm with the approval of Hertz's largest shareholder—Carl Icahn, chairman of Icahn Enterprises. She comes from the senior advisor position of asset management firm Ares Management. From 2010 to March 2014, she served as the chairman, president and chief executive officer of Stream Global Services, Inc.. She was also CEO and president of Ceridian Corporation from 2006 to 2010, GE Commercial Finance from October 2002 to October 2006, and GE Insurance Solutions from 1999 to 2002. She has also served in leadership positions at US Bank, Chemical Bank, Citibank and Barclays. She is an independent director of AB Volvo, General Motors Corporation.
"Her financial acumen and hands-on operating style will serve her well as she focuses on the strategic priorities facing Hertz today," said new non-executive chair of the boards, Henry R. Keizer. "Kathy is a world class leader who understands how to create shareholder value."
The board of Hertz also announced that three of its longest serving directors – non-executive chair Linda Fayne Levinson, compensation committee chairman Carl T. Berquist and financing committee chairman Michael J. Durham—will leave on January 2, 2017. The board will then have seven directors, six of whom are independent under the public listing rules of the New York Stock Exchange.
That change translates into Hertz's largest shareholder Carl C. Icahn, chairman of Icahn Enterprises L.P. as having an even stronger influence on the new board. In a phone interview with The Street , Millman Research Associates founder and analyst Michael Millman spoke of Icahn's increasing influence: "The board is now left with seven members. The bottom line is that three of those members are his guys."
Franchise owners of the company's Hertz, Dollar and Thrifty car-rental brands do not have an independent association of their own to act as their voice and push for their self-interests as franchise entrepreneurs. To the outside world, their voices are muffled. Under these brands, franchise owners typically rely on franchisor executives and the CEO to put in a strategic word or two for their interests with the boards and shareholders.
Hertz has missed many quarters of earnings expectations, which has created pressure to find a strong leader who can turn things around. If franchisees had wanted to build a strong relation with what the franchisor regards as the franchisees' top spokesperson, the CEO. Hertz' CEOs have come and gone.
Shareholder Icahn said he was excited about Marinello taking the helm of the rental-car company. "Kathy has a history as a proven CEO and I believe she is the right person to lead Hertz as we move forward," said Icahn. "Her consistent track record of successes in consumer and financial services, as well as technology businesses, is impressive. She was extremely well-regarded at GE and successfully turned around Ceridian and Stream."