Ex-Hertz CEO settles SEC charges over incentive pay, restatement
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(Reuters) — A former chief executive of Hertz Global Holdings Inc. will pay $2.18 million to settle U.S. Securities and Exchange Commission charges he failed to reimburse incentive-based pay to the rental car company following a financial restatement.
Without admitting or denying wrongdoing, Mark Frissora agreed to pay $1.98 million to Hertz and a $200,000 civil fine to the SEC, according to settlement papers filed on Thursday with the federal court in Newark, New Jersey.
Mr. Frissora, 64, of Naples, Florida, had been Hertz’s chief executive from July 2006 to September 2014.
The settlement requires a judge’s approval. It follows Hertz’s agreement in February 2019 to pay a $16 million civil fine to settle related SEC charges.
A lawyer for Mr. Frissora declined to comment.
According to the SEC, Mr. Frissora pressured subordinates to “find money,” mainly by reassessing reserve accounts, resulting in accounting changes that left Hertz’s financial results materially inaccurate.
The SEC said Mr. Frissora also led Hertz’s decision in 2013 to extend its “holding periods,” or estimates for how long it would keep vehicles in its fleet, lowering reported expenses without revealing to investors the risks of holding older vehicles.
In July 2015, Hertz reduced previously reported pretax income by $235 million, and according to the SEC belatedly disclosed the extended holding periods.
Hertz filed for bankruptcy protection in May after its business was decimated during the coronavirus pandemic.
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