Hertz Global Holdings Inc. is demanding that ex-Chief Executive Officer Mark Frissora and other former senior managers return at least $70 million of incentive compensation for their roles in an accounting scandal five years ago.
Mark FrissoraPhotographer: Andrew Harrer/Bloomberg
The car-rental chain accused the former executives of pressuring employees to use fraudulent accounting techniques to inflate income and earnings, according to a March 25 lawsuit. The alleged misconduct spurred a federal investigation and prompted Hertz to restate several years of financial results, costing the firm more than $200 million.
The restatement “was triggered by the gross negligence and misconduct of Hertz’s senior executive officers” who set the wrong tone at the top, the company alleged. Hertz filed the lawsuit after Frissora, ex-Chief Financial Officer Elyse Douglas and J. Jeffrey Zimmerman, who was general counsel, refused to return incentive compensation tied to the erroneous results.
Hertz’s effort to recoup the awards — a rare move by companies even in cases of dubious behavior by senior management — follows a protracted stock slump as falling used-vehicle prices and the rise of ride-sharing companies squeeze car-rental profits. The accounting scandal also stoked skepticism about Frissora among some investors of Caesars Entertainment Corp., which he has led since 2015. He’s set to leave the casino operator this month.
via Hertz (HTZ) Seeks $70M in Clawbacks Tied to Accounting Scandal – Bloomberg