The board of directors of Element Fleet Management Corp. named Dan Jauernig acting CEO and has rejected a proposal from some of its shareholders that it explore a possible sale of the business.
Based in Toronto, Element is the largest manager of commercial vehicle fleets in North America, a position it attained by acquiring large fleet management businesses from General Electric and PHH/Arval.
Jauernig takes over for Bradley Nullmeyer, who stepped down as CEO and board member after five years at the helm.
“I look forward to working with the many talented and dedicated individuals across our company to put our 100% focus on our customers and exceptional execution,” Jauernig said in a statement.
Chairman Brian Tobin wished Nullmeyer the very best in his retirement. “Brad led the company through significant change and growth, while assembling a management team that is ready to lead Element through its next chapter of growth,” Tobin said Feb. 5
Jauernig, who has more than 25 years of experience in financial services, joined Element in 2014 and was subsequently promoted to president and chief operating officer. He previously served as president of Classified Ventures/Cars.com and was chief financial officer of Newcourt Credit Group.
Element’s board of directors will consider internal and external candidates to fill the permanent CEO position, according to the statement.
The board also said it has completed a review of financial alternatives, including a possible sale of the business, and “has determined that the best strategy to create long-term value for all stakeholders is to continue to execute on its strategy and remain focused on its customers, efficiency and the effectiveness of its operations.”
Element has recently invested heavily in a technology platform for its fleet management business, but the process has taken longer than expected, resulting in higher costs and “a revenue growth trajectory below the company’s long-term potential,” according to a statement issued by Element.
Jauernig acknowledged that the company needs to do better.
“The board and I recognize that the rapid pace of change and growth has not been easy for a number of stakeholders, and the integration process has created challenges for some of our valued customers,” Jauernig said in a statement.
Company officials cited an agreement to provide maintenance and accident services for the Maven car-sharing service of General Motors Corp. as evidence of the company’s capabilities.
The company said it expects operating results for 2017 in its core fleet business to be “in line” with previous guidance with a decline in the total number of vehicles under management compared to the third quarter.
In 2018, Element expects operating income to be down 3% to 5% with a resumption of growth in 2019.
Element stock is traded on the Toronto Stock Exchange. The company will report results for the fourth quarter and 2017 year end on March 15.