Business

Ex-Goldman CFO lined up for $250 million pay raise as Hertz chief if shares rise

Stephen Scherr, a former top executive at Goldman Sachs, is poised to make at least $250 million in his new role as Hertz chief executive, if the car rental company’s share price rises in five years. arrived or sold.

Scherr, who was appointed Hertz chief executive on Friday, has been awarded a total of 12.5 million Hertz shares that will depend on how the stock performs in the coming years, according to a regulatory filing. determined.

If Scherr received all of his shares at the current stock price, the incentive package would be worth about $250 million, although it could yield much higher payouts if Hertz stock soars in the near future. future, as its current owners expect.

If that turns out to be the case, Scherr, who was once seen as a potential candidate to lead Goldman Sachs as chief executive officer before leaving the bank last year, could find his salary higher than that of the leader. current investment banker, David Solomon.

Some awards will not be awarded if Hertz stock stagnated, or the company is not sold. “The terms of such share awards are designed to align Mr. Scherr’s compensation with the company’s long-term share price performance,” Hertz said in a filing.

Scherr left Goldman last year after 28 years at the Wall Street firm and most recently as the bank’s chief financial officer. At the time of his departure, the Financial Times reported that Scherr had decided to leave the bank and that he was open to taking leadership positions at other companies.

Prior to becoming chief financial officer, Scherr was the head of commercial and consumer banking at Goldman, where he helped found Marcus, the company’s consumer lending brand.

Described by some former colleagues at Goldman as witty and witty, several executives at the bank have mentioned him as a potential future successor to Solomon should he be gone in the future. short time.

Hertz, which filed for bankruptcy in May 2020 as business dried up and debts related to its heavy auto fleet grew, emerged from restructuring with record profit and a new Vision become an important part of the electric vehicle and self-driving taxi infrastructure in the US.

Distressed debt investor Knighthead Capital Management and travel-focused private equity firm Certares Capital Management led Hertz out of bankruptcy in July 2021. They are working to use current profits. of Hertz to convert its fleet of combustion engine vehicles to electric vehicles.

Hertz ordered 100,000 vehicles from Elon Musk’s Tesla as part of a broader partnership with the electric carmaker. It has also begun working with ride-hailing group Uber to make its fleet available to drivers, and tapped online used-car seller Carvana to buy and sell cars from the company.

These partnerships and skyrocketing rental car prices have boosted Hertz’s stock since the company emerged from bankruptcy. As of the end of 2021, the Financial Times has valued the combined $2 billion investment by Knighthead and Certares, representing about 40% of Hertz’s outstanding shares, at about $5 billion.

“We have bold plans for Hertz for the long haul, and we need a leader who knows how to turn big ideas into reality while inspiring people to work hard for change, ” said Tom Wagner, who founded Knighthead Capital in 2008 after leading Goldman Sachs. debt transaction desk.

“Hertz is an extraordinary brand and a flexible business perfectly positioned to reshape the way people move in the direction of safer, more convenient, affordable and environmentally friendly.” Scherr added in a statement Friday.

According to a recent regulatory filing, Scherr owns just 88,000 Goldman shares, valued at $31.5 million based on the bank’s closing share price on Thursday.

Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button