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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Appointment of Joseph A. Ferraro as Chief Executive Officer
On June 12, 2020, the Board of Directors (the "Board") of Avis Budget Group, Inc. (the "Company") appointed Joseph A. Ferraro, who has been serving as Interim President and Chief Executive Officer, as the Company's President and Chief Executive Officer ("CEO"), effective immediately.
Mr. Ferraro, age 63, was appointed Interim President and Chief Executive Officer effective January 1, 2020, and was previously President, Americas since January 2015. Mr. Ferraro joined the Company in 1979, and has served in various positions of increasing responsibility in the Company's North America operations, including as Senior Vice President, North America Operations from October 2011 to December 2014.
Appointment of Bernardo Hees as Executive Chairman
On June 12, 2020, the Board also appointed Bernardo Hees, the Company's current Board Chairman, as Executive Chairman. In this role, Mr. Hees will continue to be the Chairman of the Board and work closely with the CEO and the rest of the management team.
Mr. Hees, age 50, was appointed to the Board and as Chairman of the Board effective February 7, 2020. Previously, Mr. Hees served as Chief Executive Officer of The Kraft Heinz Company from 2015 to June 2019. He served as Chief Executive Officer of H.J. Heinz Holding Corporation from June 2013 until its merger with Kraft Foods Group, Inc. in July 2015. From 2010 to 2013, Mr. Hees served as Chief Executive Officer of Burger King Worldwide Holdings, Inc., a global fast food restaurant chain. From 2005 to 2010, he was Chief Executive Officer of América Latina Logística, a Brazilian logistics company. Mr. Hees was also a partner at 3G Capital from 2010 to 2019. Mr. Hees is also a director of Bunge Limited, a NYSE-listed company.
Compensation Arrangements for Mr. Ferraro and Mr. Hees
In connection with Mr. Ferraro's appointment, Mr. Ferraro's current base salary of $750,000 will be increased to $1.0 million. For 2021, Mr. Ferraro is expected to receive a base salary of $1.0 million, an annual incentive with a target of 200% of base salary and a long-term incentive award with a grant date value of $5.0 million. The majority of the long-term incentive award is expected to be performance-based.
In connection with Mr. Hees' appointment, the following compensation was approved:
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An annual base salary of $500,000 and target short-term incentive of $500,000;
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A long-term incentive award comprised of a time-based restricted stock unit award with a grant date value of $1.5 million, scheduled to vest on the one-year anniversary of the date of grant, and a performance-based restricted stock unit award of 37,500 shares, scheduled to vest on the three-year anniversary of the date of grant, subject to attainment of performance criteria; and
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A special one-time restricted stock unit award with a grant date value of $1.0 million, with one-third of the award scheduled to vest on each of the first three anniversaries of the date of grant.
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The grant date for each of the awards to be granted to Mr. Hees is expected to be on or about June 30, 2020.
Base salaries for employees at the level of Vice President and above have been temporarily reduced by 10% and this reduction will also apply to Mr. Ferraro's and Mr. Hees' base salaries as described above until such temporary reduction is removed for such employees.
Appointment of Izilda P. Martins as Executive Vice President, Americas
In connection with Mr. Ferraro’s appointment as permanent Chief Executive Officer, on June 12, 2020, the Board appointed Izilda P. Martins, the Company’s current Interim President, Americas, since January 1, 2020, as Executive Vice President, Americas.
Ms. Martins, age 48, was appointed Interim President, Americas on January 1, 2020, and previously held various strategic and financial roles with the Company, including Senior Vice President and Chief Financial Officer, Americas from May 2014 through December 2019, Senior Vice President and Acting Chief Accounting Officer from November 2010 through May 2014, and Vice President of Tax from August 2006 through November 2010. Ms. Martins was Director of Tax Planning and Mergers & Acquisitions of Cendant Corporation (as the Company was formerly known) from November 2004 through August 2006. Prior to joining the Company, Ms. Martins was associated with Deloitte & Touche LLP for seven years.