Icahn helps to choose new Hertz chief

Hertz, the car rental company facing growing questions about its accounting, has appointed a former senior airline executive as its new chief executive following a search involving Carl Icahn, the activist investor.

John Tague, who takes office on Friday, takes over from Brian MacDonald, a specialist in corporate turnrounds who has led the company on an interim basis since Mark Frissora left "for personal reasons" in September.

Mr Tague will oversee Hertz's investigation of its corporate accounting after the company said in June that it might have to restate the last three years' results because of a series of accounting problems. The issues included problems with the capitalisation and depreciation of assets and "doubtful accounts" in Brazil.

The company's problems deepened further on Thursday when it confirmed it would have to restate its 2012 and 2013 results as well as those for 2011. It also said corporate earnings before interest, tax, depreciation and amortisation - a profit measure that excludes car financing effects - would be 29 per cent down this year on 2013's reported level.

It did not expect to complete the examination of its accounts before mid-2015 at the earliest.

Mr Tague was a senior executive at United Airlines for seven years, rising to chief operating officer before leaving when the airline merged with Continental Airlines in 2010. He is currently chief executive of Cardinal Logistics Holdings, a logistics company.

The committee that interviewed candidates was composed of five independent directors, including two of the three that Carl Icahn, the activist investor, nominated under a deal struck with the company in September. Mr Icahn said in August he controlled around 8.5 per cent of the company's shares.

Mr Icahn said that he, his team and members of the executive search committee had spent a "significant amount of time" with a number of highly qualified candidates.

"I have been involved in a number of CEO searches during the last decade and have been quite impressed by the knowledge and imagination of a number of these candidates," Mr Icahn said. "I am happy to say that after listening to John's ideas concerning Hertz and evaluating what he has accomplished at United, I believe he ranks at or near the top of the group."

Mr Tague introduced new products and pricing initiatives at United that Hertz said had improved both United's financial performance and customer satisfaction.

The new CEO said he was honoured to have been selected to lead Hertz to its full potential at a time of "unprecedented opportunity for the company and industry".

Hertz's shares rose 2.57 per cent to $22.75 on Thursday but declined 0.2 per cent to $22.70 in after-market trading after it announced the appointment.

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