What Vail Resorts investors are expecting from new CEO Rob Katz at June 5 earnings call

The news that Vail Resorts‘ board of directors has terminated Kirsten Lynch as CEO and appointed Rob Katz to succeed her sent shockwaves through the ski industry on Tuesday, prompting several analysts to issue opinions on how the move could affect the company moving forward.

Late Apex Partners founder Taylor Schmidt, an investor who was particularly critical of Lynch in a white paper he published on the company in January, commended the Vail Resorts board on making what he called a “necessary transition” of the CEO position.

Schmidt, in his research paper, said a former marketing executive and a former senior director told him Lynch had created a toxic work environment at Vail Resorts.

Schmidt quoted the former marketing executive as saying many people who had left the company in recent years “left because of Kirsten’s leadership.”

One of Schmidt’s chief concerns was the fact that Lynch herself was not purchasing shares in the company.

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“In the last 3 years, CEO Lynch has reaped $19M in total compensation yet has purchased zero stock,” Schmidt said in his report. “Management have no skin in the game, signaling zero conviction in Vail’s future.”

While Lynch was CEO, company insiders received $47 million in payments while the stock price declined 53%, according to Schmidt’s January report.

“Management have irreparably damaged Vail’s perception among stakeholders (customers, partners, employees and Investors) and there is no accountability,” Schmidt said.

Schmidt’s report came on the heels of a contentious labor dispute with the Park City ski patrollers’ union, resulting in the first instance of ski resort employees walking off the job in a collective bargaining dispute since 1964.

A few months earlier, California’s Third Appellate District threw out a settlement Vail Resorts had negotiated with a group of more than 100,000 employees who alleged numerous Fair Labor Standards Act violations, including unpaid hours and overtime, necessary equipment and expenses not being reimbursed, and other violations. It was one of two such lawsuits against the company.

But it wasn’t all bad news under Lynch’s tenure. Katz celebrated some of her accomplishments in a letter to employees on Tuesday, saying she navigated “some of the most challenging times that our company has faced as we navigated dynamic events post-pandemic.”

In addition to helping the company expand into Europe with the acquisition of Crans-Montana in Switzerland in 2023 and Andermatt-Sedrun in Switzerland in 2022, Lynch also ushered in a $20 per hour minimum wage for employees at the company’s large resorts.

Lynch’s severance includes a one-time payment of $2,249,108, which is the equivalent of two years of her base salary, according to documents filed Tuesday with the U.S. Securities and Exchange Commission.

On Tuesday, Schmidt said his company hopes to work constructively with Vail’s board to see the company realize its potential.

“It is clear to everyone — shareholders, customers, and employees — that Vail lost its way,” Schmidt said. “Rob’s return provides the opportunity for a reset, and to reignite an era of operational excellence. We believe Vail’s time, energy, and cash flows ought to be invested back into creating a truly world-class skiing experience for its guests. Ultimately, returns to shareholders will follow these choices. To that end, we look forward to hearing what Rob Katz has planned for Vail on next week’s earnings call.”

Regarding the June 5 earnings call, Vail Resorts analyst Jeff Stantial with Stifel Financial issued a note on Tuesday, saying he hopes Katz will address a big question his company has been receiving in recent months: What could a new CEO do differently?

“We expect this will be a key focus on the upcoming F3Q earnings call, though some theorized operational improvements include: 1) improved labor/union negotiation, 2) more achievable guidance and improved disclosures, 3) greater efforts to maintain lift/terrain availability during periods of challenging conditions, 4) more proactive control of negative media coverage and resulting guest perception, and 5) investments into offering and labor commensurate with luxury positioning,” Stantial said.

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But while the June earnings call will provide Katz an opportunity to address investors’ concerns, some of those anxieties may not be soothed right away.

“Key changes will take time to develop and implement, and may not be communicated until MTN’s Investor Conference next March,” Stantial said.