Starwood CEO resigns as resort company reorganizes (+video)
Starwood Hotels CEO Frits van Paasschen has resigned by mutual agreement, the resort giant said Tuesday. Starwood shares were up over 2 percent in morning trading on the decision.
Starwood Hotels & Resorts Worldwide Inc said Chief Executive Frits van Paasschen had resigned by mutual agreement, a week after the hotel operator announced the spinoff of its timeshare business.
Starwood, the owner of the St. Regis and Sheraton hotel brands, named Director Adam Aron as interim CEO and said it had started looking internally and externally for a permanent CEO.
"The board believes now is the right time to take steps to accelerate Starwood's growth, improve performance, and sharpen our focus on operational excellence," Chairman Bruce Duncan said in a statement on Tuesday.
Starwood, which is focusing on operating properties instead of owning them, forecast a lower-than-expected full-year profit last week, partly due to a stronger dollar.
Paasschen, who became Starwood's CEO in September 2007, will continue as a consultant to assist in the transition, the company said.
Frits has made many important contributions over the past seven years to Starwood’s successful evolution into a global company with leading lifestyle brands that possess distinct competitive advantages," Duncan said. "He’s put innovation and technology leadership at the forefront, while building a culture of collaboration across a dynamic organization. On behalf of the Board, I want to thank Frits for his outstanding service and wish him the best in his future endeavors.
"The Board believes now is the right time to take steps to accelerate Starwood’s growth, improve performance, and sharpen our focus on operational excellence. We are fortunate to have on our Board a talented and experienced business builder in Adam Aron who is prepared to step into the CEO position on an interim basis. Adam has been a Starwood director for nearly a decade and has deep hospitality industry experience as former CEO of both Vail Resorts and Norwegian Cruise Line. He is very familiar with our strategy, brands and leaders around the globe, and we are confident Starwood won’t miss a beat as he steps in to lead the Company during this transitional period.”
Starwood's shares were up 1.1 percent at $79.45 in premarket trading.
Up to Friday's close, the stock had fallen about 3 percent this year, compared with a 2.4 percent rise in the Dow Jones U.S. Hotels Index. (Reporting by Ankit Ajmera and Radhika Rukmangadhan in Bengaluru; Editing by Maju Samuel)