TripAdvisor CEO Stephen Kaufer undoubtedly is the ultimate decision-maker, subject to board approval, over the company’s operations but he recently gave up some power over TripAdvisor’s tours and activities, and vacation rentals businesses.
Until now, although the investor relations section of TripAdvisor.com lists 14 people as management, only three were considered “executive officers” with policy-making power and real authority over their business units. They were CEO Kaufer, who is the principal executive officer, CFO Julie Bradley and general counsel Seth Kalvert.
“While other senior employees may have titles that include ‘president’ or ‘vice president,’ these senior employees are not in charge of their principal business units, in light of limitations on the responsibilities and authority,” an attorney representing TripAdvisor wrote to the Securities and Exchange Commission last November in response to an SEC inquiry.
Adding Executive Officers
Based on correspondence with the SEC about the definition of “executive officer,” TripAdvisor management decided to recommend to the TripAdvisor board that Barrie Seidenberg, CEO of tours and activities provider Viator, which was acquired by TripAdvisor in August, and Dermot Halpin, president of TripAdvisor’s vacation rental business, should be added as executive officers.
TripAdvisor has confirmed that they were indeed added as executive officers.
This is a significant development and is in line with the increasing importance of tours and activities and vacation rentals to TripAdvisor’s overall business.
In the letter to the SEC, the attorney for TripAdvisor states that Viator’s Seidenberg has the power to make material decisions over tours and activities operations and sales and marketing.
“Ms. Seidenberg is involved in setting policy, has authority to make strategic and material operating decisions, and has authority to make other significant decisions relating to the business unit’s operations, including those related to sales and marketing,” TripAdvisor told the SEC.
Halpin, who has been president of vacation rentals at TripAdvisor since 2011, “has been granted additional responsibilities and authority over this business unit, which responsibilities and authority were previously held by Mr. Kaufer,” TripAdvisor wrote to the SEC.
“… for this business unit, Mr. Halpin is involved in setting policy, has authority to make strategic and material operating decisions, and has authority to make other significant decisions relating to the business unit’s operations, including those related to sales and marketing,” the TripAdvisor correspondence stated.
Seidenberg’s and Halpin’s newly acquired power within TripAdvisor over their respective business units is independent of whether the board actually went along with management’s recommendation and designated the duo as executive officers.
Apart from tours and activities and vacation rentals, CEO Kaufer has sole responsibility for all other aspects of TripAdvisor’s wide-ranging business.
“As part of its analysis,” TripAdvisor wrote to the SEC, “management also concluded that, other than Viator and Vacation Rentals described above, Mr. Kaufer continues to be solely responsible for setting policy and continues to have final authority over all strategic and material operating decisions relating to operations across all geographies, including those related to product development, engineering, sales and marketing, and Business Listings.”
TripAdvisor’s board was slated in mid-February to take up the recommendation of adding Seidenberg and Halpin to the ranks of TripAdvisor’s executive officers, bringing the number of executive officers to five, up from just three. The board has ratified the move.
In the pecking order at TripAdvisor, the executive officer designation places Seidenberg and Halpin higher than other members of management such as Marc Charron, president of TripAdvisor for Business; David Krauter, president of Smarter Travel and Independent Traveler, and Barbara Messing, chief marketing officer, for example.
The elevated duties and status of Seidenberg and Halpin over attractions and vacation rentals, respectively, aligns with the new way that TripAdvisor began reporting its financials in the fourth quarter of 2014.
TripAdvisor began reporting its financials in two segments, namely Hotel, which accounted for 91 percent of revenue in 2014, and Other, which includes attractions, restaurants and vacation rentals. Previously there had just been one reporting segment.
TripAdvisor is required to detail the ranks of its executive officers and their compensation by around May 1, 2015.