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Hilton's Bollenbach to step down as CEO

The retiring executive, who turned the hotelier into a global player, will remain chairman.

January 19, 2007|Ashley Surdin | Times Staff Writer

Stephen F. Bollenbach, the former Walt Disney Co. executive who engineered Hilton Hotels Corp.'s international expansion, will step down as chief executive at the end of the year but will continue serving as chairman, the company said Thursday.

Hilton said it was searching for a successor. An early favorite is President and Chief Operating Officer Matthew J. Hart, who was added to Hilton's board of directors in a separate move Thursday.

Spokesman Marc Grossman said a new CEO could be named by summer.

"It wouldn't be appropriate to make any speculation because there is a process that the board has underway," he said.

Smedes Rose, a lodging analyst at New York-based Calyon Securities, said he believed that Bollenbach's successor would come from within the Beverly Hills company's own ranks and most likely would be Hart.

"I think most people in the investment community have assumed that Matt Hart would certainly be under consideration," Rose said. "He has a long tenure with the company. He's a member of senior management. It would be a relatively smooth transition."

Hilton's stock barely moved, falling less than 1% to $35.09.

Bollenbach's retirement had been long planned. His chairmanship is expected to last through 2010. After that, his agreement calls for him to serve for a year as a consultant.

"Steve steps away from day-to-day operations but clearly stays involved in the company," Rose said.

Bollenbach, 64, had a long career in real estate and hotels before he joined Hilton in 1996. He negotiated on behalf of New York real estate mogul Donald Trump in the 1990s. He once told The Times that he was "the original apprentice," referring to Trump's reality TV show. At hotel chain Marriott International Inc., Bollenbach engineered a financial strategy to split the company in two.

As Disney's chief financial officer, Bollenbach played a pivotal role in the company's history. Shortly after joining in 1995, Bollenbach helped engineer the $19-billion acquisition of Capital Cities/ABC Inc. But Bollenbach left Disney after nine months, after then-Disney CEO Michael Eisner brought in former Hollywood super agent Michael Ovitz above him as president.

In an unsuccessful Delaware shareholder lawsuit involving Ovitz's outsized severance package, Ovitz described a meeting with Bollenbach shortly before his hiring was announced. "Mr. Bollenbach looked at me straight in the eye and said, 'Hello, I'm not reporting to you,' " Ovitz recalled during the trial in 2004.

Bollenbach testified that Ovitz was a poor fit at Disney.

Bollenbach's biggest accomplishment was transforming Hilton into a global company. He expanded the company's hotel system from 230 to 2,400 locations. In February, it acquired Britain's Hilton International and its 400 hotels for about $6 billion, making Hilton the leading global hotel company.

"The company has been transformed since Steve took over in 1996," Grossman said. "It's really important to be big and global in this industry."

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ashley.surdin@latimes.com

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