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When the CEO, already facing a crisis, gets the coronavirus
GLENN Fogel was in crisis mode.
It was late February and the coronavirus was spreading. Already, this chief executive of Booking Holdings, the online travel giant that owns brands like Priceline.com, OpenTable and Kayak, was spending nearly every waking moment at his computer as a tsunami of travel cancellations poured in. He quickly paused marketing, halted stock buybacks, froze hiring and raised US$4 billion in debt.
Then the virus that ravaged his business got him too. His wife became sick and his daughter, a college student who had returned home, started to cough. On March 25, the 58-year-old, who lives just outside New York City, developed a headache and a 28.3 deg C fever.
He was among a wave of leaders at publicly traded companies who tested positive for the coronavirus. At least half a dozen chief executives have contracted it in the past three months, going by a tally by The New York Times, including the heads of NBCUniversal, the real estate investment firm Kimco Realty, Becle (which makes Jose Cuervo tequila) and the security company ADT. In April, Morgan Stanley's chief, James Gorman, told employees that he had tested positive and recovered.
Mr Fogel's illness was relatively mild, but it complicated navigating the lockdown and shoring up a business in free fall. And it put him on the hook to properly disclose the situation to shareholders.
Publicly traded companies are obligated to divulge events that may be considered "material" to investors.
Peter Cappelli, a management professor at the Wharton School at the University of Pennsylvania, said companies faced risks if news of a top executive's illness leaked before a disclosure. Apple famously concealed the health conditions of its chief, Steve Jobs, before he died in 2011, prompting criticism and an inquiry by the Securities and Exchange Commission.
Mr Fogel kept working. Before taking a drive-through test for the virus on March 26 near his home in Scarsdale, New York, he did a CNN interview over Skype. On April 1, Booking Holdings filed a regulatory document laying out his condition.
An energetic storyteller, he said his attitude was, "let's let everybody know, so everyone's informed, so there's no question".
Steve Hafner, who heads OpenTable and Kayak and reports to Mr Fogel, estimated that he had received more messages on Slack and video calls from his boss while he was sick than when he was healthy.
When the extent of the pandemic became clear to Mr Fogel and his lieutenants in early March, their first move was to set up customer service workers at home to field an avalanche of cancellations from travellers.
He and his executives also tried to quickly figure out how to balance the inherent conflicts among hoteliers - who risked going bankrupt if they refunded everyone, customers - who stood to lose money on non-refundable bookings, customer-service workers - who were under pressure while working from home with their families, and shareholders - who argued that Booking was not legally obligated to offer refunds.
The pressure was intense. Booking paid customers US$63 million in refunds on non-refundable reservations for the first three months of the year - money it does not expect to recover. Mr Fogel said the company will try to get some back from the hotels eventually, but that requires helping them stay afloat now. OpenTable later waived fees on its restaurant reservation system for the rest of the year.
"You want to build the reputation that you are there," he said.
By then, he was feeling ill, and his wife and daughter had become sick. After initially testing negative for the coronavirus, his high school-age son developed a cough and fever too.
Leslie Cafferty, Booking's head of communications, said Mr Fogel's first instinct had been to call in the lawyers to understand disclosure requirements and "minimise any risk he was hiding information". They made plans to announce his test results in an SEC filing.
After he tested positive for the virus on March 31, Booking pulled the trigger on the filing the next day. In it, Booking said he continued to perform as chief executive and that the company had succession plans, including a temporary delegation of responsibilities, for all its senior executives.
Work piled up as the travel industry underwent more pain. In April, newly booked rooms through Booking's various sites plunged 85 per cent from the year before.
That led to cost cuts. In the past month, Booking, which has 26,000 employees, has laid off 1,900 people at Kayak, OpenTable and Agoda, its subsidiary in Singapore. It also furloughed 1,800 workers in Britain under the country's relief plan and applied for aid from the Netherlands.
The company - which has seven crisis-management teams, including one that manages the other crisis-management teams - also increased the frequency of its video question-and-answer sessions with Mr Fogel and other internal communications.
On May 7, Booking said it had lost US$699 million in the first quarter, compared with a profit of US$765 million the year before. It wrote down the values of OpenTable and Kayak by US$489 million, citing the pandemic. Its stock price has fallen 21 per cent this year.
Mr Fogel and his team are now figuring out how to emerge from quarantine to an altered travel market. OpenTable has started offering reservations to bars and stores that are reopening with social-distancing measures. Kayak has begun featuring rental cars on its home page instead of flights. NYTIMES