Hertz has not reported any financial results for 2014, and it announced last week that it will restate its 2012 and 2013 financial statements, in addition to statements for 2011. The additional review is likely to delay financial results until the middle of next year.
Activist investor Carl Icahn holds a roughly 8% stake in the company and has three seats on Hertz’s board of directors. Two of five search committee members were Icahn appointees, and Icahn said in a statement that he is happy with Tague’s appointment.
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The odds-on choice to fill Frissora’s chair was Scott Thompson, former CEO of the Dollar Thrifty rental firm that Hertz acquired in 2012. Tague, who is an outsider as far as the rental car business is concerned, nevertheless has impressive credentials as the president and COO of United Airlines before its merger with Continental to create United Continental Holdings Inc. (NYSE: UAL). He is credited with raising United’s ancillary revenues from things like checked baggage fees and higher prices for seats with more legroom. Tague also gets high marks for his business acumen and his deep and wide experience in running an airline, which is almost certainly more complex than running a rental car company.
So, while Hertz probably cannot charge more for giving a customer the key to a car’s trunk, Hertz clearly thinks that Tague is the guy who can untangle the company’s problems with an aging fleet and poor customer service. A slash-and-burn approach, though possible, is not likely, but improving operations and managing for shareholder returns is delicate balancing act.
Hertz shares traded up about 4.8% in the late morning Friday, at $23.83 in a 52-week range of $18.50 to $31.61.
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