Edward Linnen
AVIS BUDGET GROUPAbout Edward Linnen
Edward P. “Ned” Linnen, age 55, is Executive Vice President and Chief Human Resources Officer (CHRO) of Avis Budget Group (CAR), a role he has held since January 2015 after joining the company in 2001; prior to Avis, he held various human resources roles at Kraft Foods Inc. and Nabisco, Inc. In 2023, Avis delivered revenue just over $12.0B, net income ~$1.6B, Adjusted EBITDA ~$2.5B, and 14% TSR; in 2024, Adjusted EBITDA was $628M with a reported net loss of $1,817M due primarily to non-cash charges tied to fleet rotation and vehicle write-downs, resulting in no AIP payouts for NEOs . Linnen participates in the same incentive architecture as other NEOs (50% Adjusted EBITDA and 50% scorecard in AIP; PSUs on 3-year cumulative Adjusted EBITDA; RSUs vest over 3 years), aligning his compensation with company performance and shareholder outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Avis Budget Group | EVP, Chief Human Resources Officer | Jan 2015–present | Leads enterprise HR with focus spanning labor relations, international and domestic HR, and field HR leadership . |
| Avis Budget Group | SVP, Chief Human Resources Officer | Feb 2013–Jan 2015 | Executive HR leadership; succession to EVP CHRO . |
| Avis Budget Group | SVP, Human Resources, North America | Oct 2011–Feb 2013 | Regional HR leadership for North America . |
| Avis Budget Group | VP Labor Relations & International HR; VP Domestic HR; Field HR Director | 2001–2011 | Progressive HR leadership roles across labor relations, international and domestic HR, and field operations . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kraft Foods Inc. | Various HR positions | Before 2001 | Human resources roles prior to joining Avis (2001) . |
| Nabisco, Inc. | Various HR positions | Before 2001 | Human resources roles prior to joining Avis (2001) . |
Fixed Compensation
| Item | 2024 | Notes |
|---|---|---|
| Base Salary ($) | 600,000 | 2024 Summary Compensation Table (SCT) . |
| Target Bonus % of Salary (AIP) | 100% | CHRO AIP target; AIP max 150% of target for all NEOs . |
| Actual AIP Payout ($) | 0 | 2024 AIP paid 0% due to EBITDA below threshold . |
| All Other Compensation ($) | 62,443 | 2024 SCT (perquisites and other items) . |
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Design and Results
| Component | Weighting | Target/Goal | Actual | Payout |
|---|---|---|---|---|
| Adjusted EBITDA (Global) | 50% | Target $1,850M (range mid-point $1.7–$2.0B; threshold $1,360M; max $2,400M) | Below Threshold (Adjusted EBITDA $628M) | 0% |
| Individual Scorecard (quantitative/operational) | 50% | Up to 100% achievement; multiplied by EBITDA factor (0–150%); no payout if EBITDA below threshold | EBITDA below threshold → ineligible | 0% |
Key mechanics:
- NEO target opportunities unchanged for 2024; CHRO at 100% of base salary; maximum payout 150% of target .
- Scorecard payout is 0% if EBITDA below threshold; applies for 2024 .
Long-Term Incentive Program (LTIP) – Structure and 2024 Grant
| Element | 2024 Design | Vesting | Metric/Goals |
|---|---|---|---|
| RSUs (50% of LTIP) | Time-based; equal retention value to PSUs | 1/3 on each of first three anniversaries of grant date | Service-vesting only |
| PSUs (50% of LTIP) | Performance-based | Cliff vesting at 3-year anniversary (cont. service) | 3-year cumulative Adjusted EBITDA: Threshold $4.0B (50% payout), Target $5.0B (100%), Max $6.0B (150%) |
2024 Grants to Edward Linnen:
- Grant date: March 13, 2024 .
- RSUs: 2,874 units; grant date fair value $325,049; vest in three equal annual installments starting 3/13/2025 (subject to continued service) .
- PSUs (target): 2,874 units; grant date fair value $325,049; eligible to vest in March 2027 subject to 3-year cumulative Adjusted EBITDA goals and continued service .
- Options: None granted in 2024 .
Recent PSU vesting outcome:
- 2022 PSUs earned/vested at 112.5% of target in March 2025 (strong financial results over 2022–2024 period; max EBITDA goal met but variable cost component below threshold) .
2024 Stock Awards – Company-wide Highlights
| Item | Value |
|---|---|
| Linnen 2024 Stock Awards (RSU+PSU grant date fair value) ($) | 650,098 |
Equity Ownership & Alignment
Beneficial Ownership
| As-of Date | Beneficially Owned Shares | “May be Acquired within 60 Days” (primarily RSUs) | % of Common Stock |
|---|---|---|---|
| Feb 19, 2025 | 55,527 | 3,851 | <1% (asterisked in table) |
| Mar 4, 2020 | 49,653 | 6,080 | <1% (based on then-outstanding) |
Context:
- Shares outstanding: 35,111,845 as of Feb 19, 2025 .
- Ownership table footnote designates Linnen’s percentage as less than 1% .
Stock Ownership Guidelines and Restrictions
| Item | Policy / Status |
|---|---|
| Guideline (CHRO) | 2x base salary; retain at least 50% of net shares until threshold met . |
| Compliance (as of 12/31/2024) | All NEOs met thresholds except CDIO (joined 2022); implies Linnen met guideline . |
| Post-attainment Holding | For one year, hold 50% of net shares from any new vest and 50% of vested options (if applicable) . |
| Hedging/Pledging | Prohibited for executives; no margin accounts, pledging, derivatives, or short sales (SRS, a large shareholder, is exempt under a Cooperation Agreement; its pledged shares are monitored by the Audit Committee) . |
Employment Terms
| Trigger (as of 12/31/2024) | Lump-Sum Severance ($) | Accelerated Equity ($) | Benefits/Perqs Continuation ($) | Total ($) |
|---|---|---|---|---|
| Termination by Company without Cause | 2,400,000 | — | 39,510 | 2,439,510 |
| Death or Disability | — | 1,408,892 | — | 1,408,892 |
| Change in Control + Termination without Cause or Constructive Discharge (Double Trigger) | 2,400,000 | 1,408,892 | 39,510 | 3,848,401 |
| Change in Control (No Termination) | — | — | — | — |
Notes:
- For Ferraro and Linnen, lump-sum severance (other than death/disability) equals 200% of base salary plus target AIP as of 12/31/2024; others have different mechanics .
- CEO and CHRO each have individual severance agreements (since 2015); other NEOs participate in the Executive Severance Plan (last modified 2021) .
- Clawback: Company has a Dodd-Frank/Nasdaq-compliant incentive compensation recoupment policy covering executives .
- Perquisites: include financial planning, auto use/allowance, discounted auto insurance, employee auto lease, and limited personal use of company-leased aircraft; no perquisite tax gross-ups except for relocation/expatriate benefits under standard policies .
Compensation Structure Analysis
- Year-over-year AIP leverage and design: 2024 AIP maintained 50% Adjusted EBITDA and 50% scorecard with max 150% of target; actual payout was 0% due to EBITDA below threshold, reinforcing pay-for-performance .
- LTIP mix: 50% PSUs and 50% RSUs aligns multi-year pay with cumulative Adjusted EBITDA while retaining talent through time-vested RSUs; no stock options granted in 2024 .
- Ownership alignment: CHRO guideline at 2x salary; as of 12/31/2024, NEOs (including Linnen) had met thresholds (except CDIO), with one-year post-attainment holding rules adding longer-term alignment .
- Governance safeguards: comprehensive anti-hedging/anti-pledging policy (with SRS exception monitored by Audit Committee) and a Nasdaq-compliant clawback .
Performance & Track Record (Company Context During Tenure)
| Period | Key Performance Indicators |
|---|---|
| FY2023 | Revenue just over $12.0B; net income ~ $1.6B; Adjusted EBITDA ~ $2.5B; TSR 14% for the year . |
| FY2024 | Adjusted EBITDA $628M; reported net loss $(1,817)M; no AIP payout (EBITDA below threshold) . |
| 2022–2024 PSU Cycle | 2022 PSUs earned/vested at 112.5% in March 2025, tied to three-year performance . |
Equity Vesting Schedules and Potential Selling Pressure
- 2024 RSUs (2,874 units) vest in equal annual installments on the first three anniversaries of 3/13/2024 (i.e., March 2025/2026/2027), subject to service .
- 2024 PSUs (target 2,874 units) cliff-vest on the three-year anniversary in March 2027 based on 3-year cumulative Adjusted EBITDA (threshold $4.0B; target $5.0B; max $6.0B) .
- 2022 PSUs vested at 112.5% in March 2025; ownership guidelines require holding at least 50% of net shares until ownership thresholds met and 50% for one year thereafter, which can moderate near-term selling pressure .
Compensation Committee and Advisors
- The Compensation Committee engaged Pay Governance LLC as its independent consultant in 2024; Committee concluded no conflicts of interest .
- Compensation Committee members included Karthik Sarma (Chair), Lynn Krominga, and Glenn Lurie; the Committee attested to inclusion of CD&A in the proxy .
Equity Ownership & Pledging
- As of Feb 19, 2025, Linnen beneficially owned 55,527 shares with 3,851 RSUs vesting within 60 days; percentage <1% per table .
- Company policy prohibits executive hedging/pledging and margin use; SRS’s pledge under a Cooperation Agreement is the noted exception, overseen by the Audit Committee .
Employment Terms Summary
- Severance economics for Linnen reflect a 2x multiple on salary plus target bonus for qualifying terminations; double-trigger required for change-in-control equity acceleration and severance; perquisites standard with limited tax gross-ups; clawback in place .
Investment Implications
- Alignment: Zero 2024 AIP payout despite executive targets underscores downside alignment; PSU design tied to multi-year Adjusted EBITDA with demonstrated 112.5% earn-out for the 2022 grant cycle aligns upside to sustained performance .
- Retention and supply of stock: Upcoming RSU tranches (2025–2027) and PSUs (2027) support retention; mandatory ownership/holding rules reduce immediate sell pressure from vesting events .
- Governance risk: Anti-hedging/anti-pledging, clawback, and double-trigger CoC provisions mitigate governance red flags; no option repricings or tax gross-ups (beyond relocation/expatriate) disclosed .
- Change-in-control cost: 2x salary+target bonus plus equity acceleration is moderate relative to market norms and unlikely to be an outsized impediment in strategic scenarios .