Mark Frissora, Caesars Entertainment Corp.’s CEO since July 2015, will leave the company early next year.
The company announced the planned departure hours after announcing a new partnership involving the Las Vegas stadium project and minutes before presenting its third-quarter financial results Thursday.
Jim Hunt, chairman of Caesars’ board of directors, said he and four members of the board’s compensation and management development committee would work with a search firm to identify Frissora’s successor.
“The board of directors thanks Mark for his instrumental role in leading the company through a challenging period and setting Caesars on a course for sustained, long-term growth and value creation,” Hunt said in a release. “Under Mark’s leadership, the company has significantly improved margins and profitability while simultaneously increasing customer and employee satisfaction. We are grateful for his leadership and numerous contributions and are optimistic for the future.”
Frissora was a center of attention last month when Tilman Fertitta, the owner of the Landry’s Inc. restaurant portfolio and Golden Nugget-branded casinos nationwide, approached Caesars about a reverse merger that would have included Caesars absorbing Golden Nugget and Fertitta taking over as the company’s CEO. Caesars rejected the offer.
Shares closed up 26 cents a share, 3 percent, to $8.85 a share, but after the Frissora departure was announced, after-hours trading climbed another 96 cents, 10.8 percent, to $9.81 a share on trading nearly twice the average volume.
From rentals to gaming
Frissora, who took over as CEO from Gary Loveman in June 2015, was accused in a Securities and Exchange Commission filing by his former company, Hertz Global Holdings, of “inappropriate accounting decisions and the failure to disclose information to an effective review” three weeks after he took over at Caesars.
Caesars management defended Frissora at the time, saying they were lucky to have him and have since praised his guidance of the company through bankruptcy.
“The board of directors thanks Mark for his instrumental role in leading the company through a challenging period and setting Caesars on a course for sustained, long-term growth and value creation,” Jim Hunt, chairman of Caesars’ board of directors, said in a release. “Under Mark’s leadership, the company has significantly improved margins and profitability while simultaneously increasing customer and employee satisfaction. We are grateful for his leadership and numerous contributions and are optimistic for the future.”
During the earnings call Thursday, analysts pressed executives about the potential impact paid parking and high resort fees have had on business.
Executive Vice President Eric Hession, the company’s chief financial officer, said the company believes Las Vegas compares favorably with competitive convention-centric cities.
“Las Vegas is still a great bargain regardless of whether you account for all the fees or how they’re added in,” Hession said.
Asked if fees were hurting the softer drive market from California, Hession said the company is studying it.
“We’re well aware from both the analysts’ and investors’ perspective and customer perspective that we need to watch and make sure we’re not inhibiting demand with the fees moreso than we’re losing in terms of the ability to drive incremental profit,” Hession said.
The company conducted a “very large survey” of meeting planners and customers to get information on how to address the issue of fees going forward.
Caesars surprised Wall Street analysts, swinging from a loss of $433 million, $2.90 a share, a year ago to net income of $110 million, or 14 cents a share, on revenue of $2.185 billion.
Earlier this year, Caesars had anticipated the third quarter wouldn’t be as strong as 2017, when two high-profile boxing events were staged in Las Vegas.
This year’s third quarter took a hit due to one of Caesars’ top entertainment draws, singer Celine Dion, canceling 20 performances.
“We don’t anticipate to see anything like that in the future, but you never know because we have a lot of theaters, a lot of performances that are good and right now, we’re making sure we have a robust calendar,” Frisorra said.