Caesars Entertainment Corp. CEO Mark Frissora received initial approval for a gaming license from state regulators today after he sought to put to rest any concerns about his contentious exit from his last job.
The Gaming Control Board unanimously recommended a license for Frissora, who was named the next chief executive of Caesars about a year ago and officially took the reins of the company in July.
Board members were ultimately satisfied with Frissora’s responses to questions about the stormy end to his tenure at Hertz Global Holdings Inc., the rental-car company he led for eight years.
Hertz said Frissora was leaving for “personal reasons” when he stepped down in September 2014, but his departure came after accounting issues arose at the company and some investors called for his ouster.
Hertz said in a June 2014 filing with the Securities and Exchange Commission that identified accounting errors that
meant it had to restate its financial statements for 2011 and revise results from 2012 and 2013. Investors later revealed they wanted the company board to replace Frissora, with one investor spokesman saying he had made “some serious missteps,”according to Bloomberg.
In November 2014, after Frissora had already left the company, Hertz said it would also have to restate financial results for 2012 and 2013. When the company completed the restatement in July, it did not have kind words for its former CEO: A Hertz SEC filing at the time said it identified an “inconsistent and sometimes inappropriate” tone at the top of the company.
“In particular, our former chief executive officer’s management style and temperament created a pressurized operating environment,” the company said in the filing.
Frissora today said he disagreed with that characterization, casting himself instead as a transparent person and an open communicator who drove up employee satisfaction. Attorneys representing him said there’s no indication he did anything wrong or was directly involved with the accounting issues.
In hindsight, however, Frissora said he might have “slowed things down” at Hertz to make sure the company wasn’t overburdened. And at Caesars, he said he’s tried to make sure employees know to speak out quickly about potential problems.
“I am very much aware of what happened at Hertz, and (am) making sure those kinds of things can’t happen here at Caesars,” he said.
Caesars presents another challenge for Frissora. A division of the company, Caesars Entertainment Operating Co., filed for bankruptcy protection in January 2015 and is trying to restructure itself to shed billions of dollars in debt. Caesars Palace is the company’s only Las Vegas property included in the bankruptcy reorganization.
Frissora came to Caesars without any casino experience, but he told the board today that he had a strong reputation in the private equity industry, having led highly leveraged companies before. Caesars is owned by private equity firms who bought it in a 2008 leveraged buyout.
Frissora also said he had a lot of experience with consumer-focused business, making Caesars’ work around gamblers and databases right in his “sweet spot.”
After starting at the Las Vegas casino giant, Frissora realized the company was “underinvested” on the Strip, so he developed a five-year plan to improve that, he said today. The company is aiming to complete renovations of some 4,800 rooms in Las Vegas this year, and Frissora said he’s pleased with its current financial performance.
At the annual Global Gaming Expo last year, Frissora notably said he was “shocked” that the industry hadn’t been more innovative in its approach to Millennials. He told the gaming board today that younger customers are a key group for any resort company, and he had put “a lot of money in the budget” for creating “casinos of the future.”
In the end, the board relayed confidence in Frissora’s suitability to run Caesars. Member Shawn Reid noted that Frissora went from one challenged company to another in his transition from Hertz to Caesars. And member Terry Johnson, who had asked pointedly about Frissora’s background earlier, said he was pleased with how the executive had responded.
Separately, the board also recommended at its meeting today that George Markantonis, president of the Venetian, Palazzo and Sands Expo and Convention Center, be approved for a gaming license. The Gaming Commission will consider both applications for final approval in two weeks.