Coverage: Priceline CEO resigns after at-work relationship
After an internal investigation discovered his at-work relationship, Priceline CEO Darren Huston resigned Thursday, forfeiting both his severance package and more than $13 million in equity awards.
Huston’s resignation was effective immediately.
The Financial Times had the day’s news:
Priceline’s chief executive Darren Huston has stepped down from the company after it investigated his relationship with an employee.
The largest US online travel agency said the employee in question was not under Mr. Huston’s direct supervision. The company said in statement:
Mr. Huston resigned following an investigation overseen by independent members of the Board of Directors of the facts and circumstances surrounding a personal relationship that Mr. Huston had with an employee of the Company who was not under his direct supervision.
The investigation determined that Mr. Huston had acted contrary to the Company’s Code of Conduct and had engaged in activities inconsistent with the Board’s expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.
Mr. Huston, who took the helm in 2014, will be replaced by former CEO and current chairman Jeffery Boyd as the board looks for a successor.
Meanwhile, Gillian Tans who has been president of Priceline’s subsidiary Booking.com, will take over as chief executive of the unit, a position that Mr. Huston also occupied.
Drew Fitzgerald and Joann S. Lublin of The Wall Street Journal explained the details of the company’s investigation:
The Priceline board opened an investigation earlier this year after a tip from a whistleblower about Mr. Huston’s relationship with a woman at the company, according to a person familiar with the matter. The board hired a law firm to conduct the probe, which was led by independent directors, this person said.
Priceline said the probe determined the employee was “not under his direct supervision,” but that the CEO’s activities were “inconsistent with the Board’s expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.”
Mr. Huston, who is married and was based in the Netherlands, declined to comment. He also resigned from the Priceline board. Mr. Huston joined Priceline in 2011 and had been its chief executive since January 2014. Previously, he was an executive at Microsoft Corp. and Starbucks Corp.
The Norwalk, Conn., company declined to say how the behavior violated the company’s code of conduct. The board’s investigation didn’t find misuse of company funds, the person familiar said.
“It was a relationship with someone he was not married to,” a Priceline spokeswoman said. The resignation came after “mutual discussion” between Mr. Huston and the rest of the board, she added.
The board has launched a search for a replacement and appointed company chairman and former CEO, Jeffery Boyd, 59, as interim chief executive.
Mike Snider of USA Today explained how Huston is forfeiting his severance package and equity awards valued at more than $13 million:
Huston will not receive severance payments, according to a document filed by Priceline with the Securities and Exchange Commission. However, the company will pay to relocate him to North America from Amsterdam, where Booking.com is headquartered.
Workplace and other improper relationships have been the downfall of several other executives CEOs caught behaving badly in recent years. In November 2012, Christopher Kubasik, then-Lockheed Martin’s president, vice chairman and chief operating officer, resigned shortly after being named CEO amid an internal investigation into a close personal relationship with a subordinate.
Hewlett-Packard CEO Mark Hurd resigned in August 2010 before an internal probe found that he violated conduct standards by falsifying reports to mask travel and food expenses spent on a former marketing contractor. Also in 2010, Best Buy CEO Brian Dunn resigned after an inappropriate relationship with a female employee.
Huston’s resignation “was not related in any way to the company’s operational performance or financial condition,” said company spokesman Leslie Cafferty.