Hertz CEO to make $1.45 million base salary
John P. Tague will make $1.45 million in base salary as CEO of Naples-based Hertz Global Holdings and Hertz Corp., Hertz said in a regulatory filing Tuesday.
Tague was hired by the Hertz board on Thursday, replacing interim CEO Brian MacDonald, who was reappointed to his role as CEO of Hertz Equipment Rental Corp. Tague, who was most recently chairman and CEO of Cardinal Logistics Holdings, started the next day.
MacDonald was called in to run Hertz Corp. after former CEO Mark Frissora resigned under pressure in September. Frissora was instrumental in bringing Hertz to Southwest Florida last year.
Tague, 52, also has the chance to make several million more dollars in bonuses tied to performance. His bonus is up to 150 percent of the base salary: about $2.2 million more, plus stock options.
He already has a lot on his plate: Hertz hasn't filed a full financial report since March and is unsure when it will catch up. Hertz announced Nov. 14 that it would cut $100 million in operating costs by the end of 2015. It also disclosed that it had overstated profits by at least $87 million in 2011, 2012 and 2013.
Meanwhile it is building its world headquarters in Estero while operating out of leased office space in Naples and Bonita Springs.
Hertz shares closed at 25.25 on Tuesday, up 89 cents or 3.7 percent.
"This is positive news with the new CEO in place, and the market took it as such," said Olga Usvyatsky, an analyst with Audit Analytics in Sutton, Mass. She also likes that Tague recently purchased 84,000 shares of Hertz, "which is also a very positive sign of confidence in the company's future."
She noted that both activist investors Jana Partners and Carl Icahn, have accepted him as CEO. "At least we haven't heard any disagreement on their parts," Usvyatsky said.
"How he performs and his ability to turn Hertz around remains to be seen," she said. "But so far the market likes what it sees."
Hertz Equipment Rental just signed a 10-year lease for 55,220 square feet in the old Source Interlink building at 27500 Riverview Center Blvd. in Bonita Springs. Hertz plans to spin that company off into a separate operation to free up cash and allow it to concentrate on its car rental and car sales businesses.
The move, announced in March, was pushed by major investors. However, a company spokesman said recently that the split is on hold while the company completes its financial review.
Tague was CEO of Greatwide Logistics Services LLC when it merged with Cardinal Logistics Management Inc. in 2013 to form Cardinal Logistics Holdings. Previously, Tague served in leadership roles at United Airlines Inc. and UAL Corp. He was president of United Airlines and executive vice president of UAL Corp. until United's merger with Continental Airlines closed in 2010.
During that time, Tague was instrumental in efforts to modernize the airline's fleet, Hertz said in a release.
Tague has offered to invest $2 million in Hertz stock and hold it through Dec. 31, 2017, which is the term of his contract.
He is tasked by the board with developing an acceptable business plan by June 30 and having a management team in place by Dec. 31, 2015.
He will have his relocation expenses reimbursed when he moves to Southwest Florida.
Hertz Global Holdings
CEO: John P. Tague
Based: In Naples temporarily, moving to world headquarters in Estero once construction is complete. Company moved here in 2013.
Value (market cap): $11.3 billion
Stock: Trades at HTZ on the New York Stock Exchange. Shares closed Tuesday at 25.25, up 89 cents or 3.7 percent, from Monday's close. The 52-week range is $18.50 - $31.61.