Starwood Hotels boss to step down
Starwood Hotels & Resorts Worldwide, owner of the Sheraton and W brands, said president and chief executive Frits van Paasschen resigned by mutual consent with the board of directors.
Adam Aron, a director at the lodgings company since 2006, will act as interim CEO while the board searches for a permanent replacement for van Paasschen (below), Stamford, Connecticut-based Starwood said in a statement Tuesday.
"The board believes now is the right time to take steps to accelerate Starwood's growth, improve performance and sharpen our focus," Chairman Bruce Duncan said in the statement. Aron "is very familiar with our strategy, brands and leaders around the globe."
The stock has gained 4.2pc in the 12 months through last week, trailing competitors such as Marriott International., which climbed 58pc, and Hilton Worldwide , with a 30pc increase.
Under Van Paasschen's leadership, Starwood's growth slowed compared with peers, said Nikhil Bhalla, an analyst at FBR & Co. in Arlington, Virginia.
"Starwood made a bet on expanding internationally at a time when international regions aren't doing that well," Bhalla said. "There have also been several missteps in communicating capital-return strategy to shareholders, which left people wondering what Starwood's story was all about."
Van Paasschen had been CEO and president of Starwood Hotels for seven years. Before Starwood, he was head of the Coors unit at Molson.He was previously corporate vice president and general manager for Europe, the Middle East and Africa for Nike.
As the board conducts its review, investors would like a hotel company CEO or someone else with a background in the industry to replace Van Paasschen, according to Bhalla.
"Neither of the last two CEOs had previously been part of the hotel sector and investors feel that has hurt the company's growth," he said.
Starwood climbed the most in three years last week after announcing a plan to spin off its timeshare business into a new publicly traded company. Starwood reported fourth-quarter net income of $1.33 a share, beating the 76c average estimate of nine analysts.
Van Paasschen is the second top executive to depart in the past year. Vasant Prabhu, who had been chief financial officer, resigned in April to take that role at NBCUniversal Media. He was named finance chief at Visa earlier this month. (Bloomberg)