News: Expedia CEO and CFO resign with immediate effect


Expedia CEO and CFO resign with immediate effect

Expedia board of directors said there was a disagreement on strategy and the company’s earnings were unsatisfactory.
Expedia CEO and CFO resign with immediate effect

Mark Okerstrom, the CEO of tech travel platform Expedia, and Expedia CFO Alan Pickerill, have resigned with immediate effect following a disagreement with their board of directors over the company’s performance.

In a statement released on Wednesday, Expedia chairman Barry Diller put the blame on a restructuring and reorganization plan Okerstrom had helmed earlier this year, which did not produce the expected results and in fact caused the company’s income to fall in the third quarter. Okerstrom, a 13-year Expedia veteran who had previously served as its CFO before being elevated to CEO in 2017, had reportedly intended to simplify the business and increase cooperation between Expedia’s 20-odd different brands.

"Ultimately, senior management and the Board disagreed on strategy. The Board disagreed with that outlook, as well as the departing leadership's vision for growth, strongly believing the Company can accelerate growth in 2020. That divergence necessitated a change in management,” Diller wrote.

It should be noted that despite the board of director’s apparent disappointment with the company’s results, its earnings never went into the red, and at least one analyst has noted that Expedia under Okerstrom was able to meet its earnings goals.

Diller and his vice-chairman of the board, Peter Kern, are stepping in to run Expedia’s executive leadership team while the board seeks new C-suite leaders.

Interestingly, Diller also said that in Wednesday’s statement that he intends to purchase additional Expedia shares.

This leadership shakeup at a major travel industry player touches on a damaging issue commonly seen in the world of listed companies: a focus on short-term earnings often to the exclusion of longer-term considerations. Restructurings and reorganizations, especially at companies the size of Expedia can be time-consuming and costly, frequently requiring sacrifices of profit in the short term. That seldom sits well with investors who look only at quarterly results and become unhappy if the month’s earnings are lower than projected, even if still positive.

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Topics: C-Suite

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