MAY 26, 2020 — HERTZ PAYS OUT $16 MILLION IN EXECUTIVE BONUSES BEFORE BANKRUPTCY
Nobody should be surprised that top exeutives feather their own nests regardless of the economic or company’s condition. Promoted as “retension” bonuses to keep executives working for the company during hard times, many believe that executives are already well-compensated and should not be rewarded further.
With more layoffs coming, newly promoted CEO Paul Stone received $700,000, CFO Jamere Jackson got $600,000, and CMO (Chief Marketing Officer) Jodi Allen received approximately $190,000.
MAY 22, 2020 — HERTZ PULLS THE TRIGGER, FILES FOR CHAPTER-11 BANKRUPTCY.
The company has filed for Chapter 11 bankruptcy protections with an estimated $19 billion in debt and approximately 700,000 fleet vehicles.
While the Chinese Virus pandemic severely crippled the travel and hospitality industry, it merely speeded up the day of reckoning for Hertz which was hemoraging money for the past four consecutive years. Losing $58 million in 2019.
There is little doubt that the greatest impact to Hertz’s revenue streme was the emergence of Uber and Lyft which eliminated much of the expense of rental cars and taxis.
Even without the pandemic, Hertz would have had to declare bankruptcy to obtain debt relief.
Original Post…
Estero, Florida-based Hertz Global Holdings, the iconic car rental company, is reported to be seeking professional counsel, including lawyers and investment bankers, to explore methods -- including Chapter 11 bankruptcy -- to restructure upcoming debt, estimated at $17 billion with a portion coming due in June 2020.
While the company had been struggling prior to the current crisis, there is little doubt that the company has been hit hard by the coronavirus pandemic travel restrictions which has nearly crippled the hospitality, travel, and entertainment industries.
Will the federal government provide enough relief funding to provide temporary relief while the company restructures? And, are the company's lenders willing to swap unsecured debt for government-guaranteed loans?
Let us not forget the outside influence of activist investor billionaire Carl Icahn reports who has forced changes in the company's leadership and governance. Icahn owns approximately 38.9% of Hertz and stands to benefit in a major way from any turnaround. What does this mean for employees? The answer is simple -- more cost-cutting and a reduction in force where some of the furloughed employees will not be returning.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?