The Story of Hertz Going Bust
bloomberg.com
The Story of Hertz Going Bust
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Re: The Story of Hertz Going Bust
#2In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
Re: The Story of Hertz Going Bust
#3In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
Then maybe the people who have decided the compensation structures are more to blame?
Re: The Story of Hertz Going Bust
#4In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
US companies aren't supposed to pay back debt (in Hertz's case, how did 2005 affect the balance sheet?) because that would be an inefficient use of capital. US consumers are supposed to spend, not save, to stimulate the economy. US government is supposed to run a deficit, not a surplus.
And yet the aggregate US net worth is positive: about 5x its GDP. What sector have I missed?
Re: The Story of Hertz Going Bust
#5In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
She took over in Jan 2017 - three years isn’t much to pay back $20Bn of debt.
Probably fairer to say that a decade of CEOs all failed.
Re: The Story of Hertz Going Bust
#6In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
US companies aren't supposed to pay back debt (in Hertz's case, how did 2005 affect the balance sheet?) because that would be an inefficient use of capital. US consumers are supposed to spend, not save, to stimulate the economy. US government is supposed to run a deficit, not a surplus. And yet the aggregate US net worth is positive: about 5x its GDP. What sector have I missed?
Despite the snark, you are partially right.
Having debt in your capital structure indefinitely is a perfectly fine decision to make.
If there's a political will to favour equity over debt, the lawmakers should first remove the tax benefits of debt over equity. See https://en.wikipedia.org/wiki/Tax_benefits_of_debt
Re: The Story of Hertz Going Bust
#7In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
Why do you say Kathryn Marinello failed?
Compensation incentives are there for a reason. Acting according to them just means fulfilling the shareholders wishes. (Unless the shareholders are idiots or impotent and the board set the wrong incentives.)
Running a riskier strategy that fails under a pandemic is a perfectly cromulent business decision to make. Shareholders and creditors knew what they were in for.
Not all gambles pay off. That doesn't mean taking on any risk whatsoever is wrong.
Re: The Story of Hertz Going Bust
#8In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
Why do you say Kathryn Marinello failed? Compensation incentives are there for a reason. Acting according to them just means fulfilling the shareholders wishes. (Unless the shareholders are idiots or impotent and the board set the wrong incentives.) Running a riskier strategy that fails under a pandemic is a perfectly cromulent business decision to make. Shareholders and creditors knew what they were in for. Not all…
So by that logic the shareholders and board members _were_ idiots then.
Re: The Story of Hertz Going Bust
#9Earlier quoted context omitted.
Why do you say Kathryn Marinello failed? Compensation incentives are there for a reason. Acting according to them just means fulfilling the shareholders wishes. (Unless the shareholders are idiots or impotent and the board set the wrong incentives.) Running a riskier strategy that fails under a pandemic is a perfectly cromulent business decision to make. Shareholders and creditors knew what they were in for. Not all…
So by that logic the shareholders and board members _were_ idiots then.
Making a bet and losing doesn't imply idiocy. What were the odds? What was the potential payoff?
Re: The Story of Hertz Going Bust
#10In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.
I don’t know if that’s fair. Hertz floundered for over a decade with leveraged buyouts, failed mergers, market missteps and accounting falsehoods. She got 9 quarters to turn that around, she was headed in the right direction, but it was too little too late.