Expedia Group CEO Mark Okerstrom and CFO Alan Pickerill have abruptly resigned, with Expedia chairman Barry Diller attributing both departures to a disagreement over strategy among senior management and the board.
Diller and vice chairman Peter Kern will jointly take over management of Expedia's executive team and day-to-day operations while the board determines more permanent leadership plans. Expedia chief strategy officer Eric Hart has been tapped to serve as interim CEO.
Commenting on the shakeup, Diller said in a statement, "Earlier this year, Expedia embarked on an ambitious reorganization plan with the goal of bringing our brands and technology together in a more efficient way. This reorganization, while sound in concept, resulted in a material loss of focus on our current operations, leading to disappointing third quarter results and a lackluster near-term outlook. The board disagreed with that outlook, as well as the departing leadership's vision for growth, strongly believing the company can accelerate growth in 2020. That divergence necessitated a change in management."
In early November, Expedia reported a 22% decrease in third-quarter net income, to $409 million. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was flat at $912 million. While revenue was up 9% to $3.6 billion, that sum was around $10 million less than analysts had forecast.
As a result, Okerstrom announced that the company was lowering its full-year 2019 guidance for adjusted EBITDA growth to 5% to 8%.
Concurrent with the leadership overhaul, Diller said that he would be "purchasing additional shares in the company as a tangible sign of my faith in and commitment to Expedia's long-term future."
Expedia has signed off on a new share repurchase authorization for up to an additional 20 million shares of the company's common stock, which would join 9 million shares already available under the group's existing authorization. Expedia now has approximately 29 million shares available under its repurchase program.
Kern said, "While we share and understand the investment community's unhappiness with our third quarter results and how 2019 has shaped up overall, we are keenly focused on the future and all of the opportunities ahead of us. We intend to use our strong balance sheet to continue and amplify our stock repurchase program, given our belief that the market currently undervalues our company."
Okerstrom joined Expedia Group in 2006 and had served as CEO since 2017, when he replaced Dara Khosrowshahi, who left Expedia to become Uber's CEO.