UNITE HERE Report Asks: Will the Pritzkers' Crown Jewel Create Value for Investors?
OCTOBER 26, 2009 - In one of the largest and most anticipated initial public offerings in recent years, Hyatt Hotels will soon be in the hands of public shareholders. Or will it? So asks the hospitality union UNITE HERE's October 22nd report.
The report, which is available at www.HyattIPOwatch.org, describes the various mechanisms through which Pritzker family leaders like Hyatt Chairman Thomas Pritzker and Director Penny Pritzker have chosen to protect their long-term interests in Hyatt at the price of accountability to public shareholders. Among Hyatt's corporate control mechanisms are provisions for dual class shares with 10 to 1 voting rights, staggered director elections, supermajority voting requirements, and more.
The report takes an 'independent' look at director independence, challenging Hyatt's designation of Ms. Pritzker as an independent director and identifying potential conflicts involving 5 of 8 independent directors. Ms. Pritzker has longstanding familial and business ties both with Hyatt Hotels [NYSE: H] and with her cousin Thomas Pritzker who serves as Hyatt's Executive Chairman. Jeff Nelson, a Research Analyst with UNITE HERE explains: 'That Hyatt would classify Penny Pritzker as an 'independent' director is laughable. Ms. Pritzker should uphold both the letter and the spirit of NYSE standards for independent directors and disqualify herself.'
The report also charts recent sales and purchases of Hyatt stock by the Pritzker family and demonstrates how lucrative insider transactions can be for the family, putting a fine point on the need for director independence and raising questions about how the Pritzkers will use their 10 to 1 voting rights.
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