Ashford Hospitality Trust Inc . (NYSE:AHT) announced Wednesday the effective resignation of J. Robison Hays III, who served as the President and Chief Executive Officer, on June 30, 2024. Following his departure, Mr. Hays has entered into a Separation/Consulting Agreement with the company.
Under the terms of the agreement, Hays will provide consulting services to Ashford (NYSE:AINC) Inc., the advisor to Ashford Hospitality Trust, for 36 months starting from the date of his resignation. As compensation for these services, and in accordance with the agreement, Hays will receive monthly payments totaling $1.9 million over the three-year period, beginning in July 2024.
In addition to the monthly payments, Ashford Inc . will cover the costs equivalent to the benefits Hays received as an employee, including medical, dental, and vision plans, as well as life insurance and long-term disability insurance premiums. These benefits will continue until Hays is eligible for similar benefits through another employer or for a maximum of 36 months post-resignation.
The agreement also ensures that Hays will remain bound by certain restrictive covenants, which include confidentiality and non-competition clauses, albeit with modifications to the non-competition and non-solicitation terms. Furthermore, Hays's compliance with the consulting obligations will be considered continuous employment for the purpose of equity or incentive plan vesting.
The consulting agreement imposes limitations on Hays's ability to acquire beneficial ownership of securities related to Ashford Inc., Ashford Hospitality Trust, Braemar Hotels & Resorts Inc., and their affiliates. Additionally, it restricts his engagement in certain transactions with these entities for 36 months following his resignation.
The separation and consultancy arrangements were detailed in a Form 8-K filed with the Securities and Exchange Commission. The full text of the agreement, as well as Hays's previous employment agreement, is attached as an exhibit to the SEC filing and incorporated by reference.
This move comes as part of a series of changes within Ashford Hospitality Trust's leadership structure, with the information based on the company's latest SEC filing.
In other recent news, Ashford Hospitality Trust has been a topic of discussion due to its ongoing efforts to improve its financial standing. The company has recently been subject to a revised stock target by Baird, which lowered the price to $2.00 from the previous $3.00, while maintaining a neutral rating. This revision is in response to Ashford's ongoing asset sales, projected to lead to the full repayment of the Oaktree term loan by the end of the third quarter of 2024.
In addition, Ashford Hospitality Trust's Q1 2024 financial results reflect significant strides in debt reduction and asset optimization. The company managed to reduce its strategic financing balance by nearly 50%, leaving a remaining balance of approximately $107 million. This has been achieved through asset sales, mortgage refinancing, and capital raising.
Furthermore, despite a softer March due to the Easter holiday shift, the company's hotel performance saw a 3% revenue growth across the portfolio in April. Notably, properties in the Washington D.C. market and The Suites in Las Vegas demonstrated significant improvements in revenue and profitability. These are recent developments that underline Ashford Hospitality Trust's commitment to financial stability and growth.
InvestingPro Insights
As Ashford Hospitality Trust Inc. (NYSE:AHT) navigates through leadership transitions, investors and stakeholders might be keen to understand the company’s financial health and market position. According to real-time data from InvestingPro, AHT has a market capitalization of $42.7 million, reflecting its current valuation within the market. With a negative P/E ratio of -0.55 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at -0.13, the metrics suggest that investors are cautious about the company's earnings prospects.
Despite challenging market conditions, one of the InvestingPro Tips indicates that AHT is trading at a low EBITDA valuation multiple, which could present an opportunity for value investors. Additionally, the company's liquid assets surpass its short-term obligations, providing some financial flexibility in the near term. However, it's important to note that analysts do not anticipate the company will be profitable this year, and the stock price has experienced significant volatility, with a -77.98% one-year price total return as of the current year.
For those considering an investment in Ashford Hospitality Trust, or seeking a deeper analysis of its potential, InvestingPro offers a wealth of additional tips. There are currently 15 more InvestingPro Tips available, which can be accessed for a comprehensive understanding of AHT's financials and market performance. To explore these insights, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.