By Kate O'Keeffe And Josh Beckerman
Casino operator Caesars Entertainment Corp. said Wednesday that
Gary Loveman plans to step down as chief executive, and former
Hertz Global Holdings Inc. CEO Mark Frissora is scheduled to assume
the post on July 1.
Mr. Loveman will remain chairman of Caesars Entertainment and
Caesars Entertainment Operating Co, the company's largest unit.
He will continue to oversee the restructuring of the unit, which
filed for Chapter 11 bankruptcy protection in January.
The Chapter 11 filing followed months of fierce negotiations
with creditors and years of declining performance at Caesars after
a 2008 leveraged buyout by Apollo Global Management and TPG that
hurt the company's balance sheet. Caesars also has suffered from
its failure to gain a foothold in big Asian gambling markets like
Macau and Singapore.
Mr. Loveman, a former Harvard Business School professor, joined
Caesars in 1998 as chief operating officer and became CEO in 2003.
He created the company's Total Rewards customer-loyalty program and
presided over a period of rapid expansion, during which he garnered
praise.
But following the buyout, which loaded the company with debt
just as the financial crisis hit, he began spending less time on
the casino business and more on financial engineering.
His rivals, meanwhile, embarked on massive new projects in Asia
and elsewhere. Mr. Loveman has called missing out on an opportunity
in Macau--where rivals Las Vegas Sands Corp. , Wynn Resorts Ltd.
and MGM Resorts International have flourished--his biggest
mistake.
"My decision to begin to transition management now comes with
the confidence that we have taken the steps necessary to ensure the
company's long-term success," Mr. Loveman said Wednesday.
Mr. Loveman told colleagues Wednesday that he had informed
Caesars's board over the summer that he wanted to move on, and that
the board should begin seeking his successor, said a person
familiar with the meeting.
"One of the drivers of his decision was he spent a lot more time
on the balance sheet than he wanted to," this person said.
Mr. Frissora will join the Caesars board immediately and will
work with it and Mr. Loveman during the transition period.
Mr. Frissora stepped down as Hertz CEO in September amid
disappointing results and accounting problems that had drawn
criticism from activist investor Carl Icahn and other shareholders.
Hertz first disclosed it had detected the accounting errors in
March. In November it revealed that the issues ran even deeper than
it suspected, saying it would also restate its results for 2012 and
2013 on top of 2011 as the company continued an investigation into
its financial statements.
"Mark has a long history of driving growth, optimizing
operations and creating shareholder value," said Marc Rowan and
David Bonderman, founders of Caesars backers Apollo and TPG,
respectively, in statement from the company.
Write to Josh Beckerman at josh.beckerman@wsj.com
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