CEO gives up $3 million salary, in addition to company furloughs

ESTERO — Hertz President and CEO Kathryn Marinello has joined the ranks of multiple other public company executives in relinquishing her entire base salary, part of the rental car giant’s response to the coronavirus pandemic.

Hertz recently implemented employee furlough programs across its North American field operations and U.S. corporate locations, according to a statement, in order “to align staffing levels with the slowdown in demand.”

“The company hopes to bring back as many team members as possible once global travel rebounds,” the statement adds.

Senior leaders at the Lee County company, which did $9.8 billion in revenue in 2019, are taking a significant reduction in pay, in addition to Marinello giving up her entire base pay, the release states. Marinello’s base pay was $2.93 million in 2018, according to public filings.

"Like the rest of the global travel sector, COVID-19's impact on Hertz arrived swiftly, and the reversal in customer demand has been significant," says Marinello in the statement. "We are aggressively taking actions to sustain operations and preserve liquidity, while confronting the issues raised by some of the most difficult economic conditions we have experienced."

Hertz, after several years of accounting issues and leadership transitions, had been posting improved financial results. The company, officials say, had experienced strong revenue and productivity in January and February, which followed 10 consecutive quarters of year-over-year revenue growth and nine quarters of year-over-year adjusted corporate EBITDA improvement. Also, for the first two months of 2020, global revenue increased 6% on 8% higher U.S. car rental revenue.

Then the travel industry collapsed.

"This situation is unprecedented,” says Marinello, named CEO in 2017. “Events are unfolding rapidly and the picture changes daily. But Hertz is a resilient company, with resilient brands and resilient people. The actions we are taking should position us to navigate the current environment and emerge an even stronger business as world travel recovers.”

Those actions include:

•Aggressively managing costs and substantially reducing capital expenditures, in addition to prioritizing sales and marketing strategies to be more in line with the current economic environment;

• Consolidating local rental locations in the U.S. and Europe, offering customers nearby alternative pick up points as necessary;

• Increasing its U.S. vehicle debt capacity by $750 million;

• Taking actions to access surplus equity in its car-rental fleet facilities to provide incremental liquidity; and

• Actively engaging with U.S. and European governments to seek financial support.