Henry Silverman
Encyclopedia
Henry R. Silverman is an American entrepreneur and private equity
investor. Silverman is best known for his role in building Cendant Corporation into a multibillion dollar business services company that provided car rentals, travel reservation services as well as real estate brokerage services and was also the largest franchisor of hotels globally.
Among the brands that Silverman controlled included hotels and motels such as AmeriHost Inn
, Days Inn
, Howard Johnson's
, Ramada
, Super 8
and Travelodge
; car rental operators such as Avis Rent a Car System
and Budget Rent a Car
; real estate brokerages such as Coldwell Banker
, Century 21 Real Estate
and Sotheby's International Realty
; as well as Orbitz Worldwide.
with a BA in Art History in 1961 and spent the following three years earning a JD from the University of Pennsylvania, where he graduated in 1964. Silverman left the job with Ross, which had been secured by Silverman’s father, a well known businessman himself, to join White, Weld & Company an investment banking firm.
After a short stint in investment banking, Silverman pursued a number of entrepreneurial ventures in the late 1960s and through the 1970s. In 1984, Silverman joined Reliance Group Holdings, which was run by corporate raider Saul Steinberg
. In 1986, Silverman and Steinberg co-founded Univision
, the Spanish-language television network and served as president and CEO from 1986 through 1990. While at Reliance, Silverman acquired Days Inn
, the US hotel chain in a $590 million deal. Silverman is estimated to have made a $125 million profit on the sale of Days Inn..
In 1990, Silverman accepted a position as partner at Blackstone Group
, a private equity
firm. However his tenure at Blackstone was cut short because of litigation between Prudential Insurance, one of Blackstone's largest investors, over a Steinberg deal in which Silverman had been involved. In 1991, he left to head Hospitality Franchise Systems, an investment of Blackstone's that Silverman had overseen. He later build HFS into Cendant Corporation.
and Howard Johnson's
as well as Days Inn
, which he was able to buy for $290 million (almost half what he had sold it for) after the company had filed for bankruptcy in 1991. Hospitality Franchise Systems went public in a 1992 IPO.
HFS was among the fastest growing companies of its size in the 1990s and the company’s stock had risen from its IPO price of $4 per share to $77 per share by 1998. However in 1998, Silverman led Cendant into what would prove a disastrous merger with CUC, a direct marketing company that operated Shoppers Advantage and Travelers Advantage (now part of Affinion Group. The $14 billion merger of HFS and CUC resulted in Cendant Corporation, which was formed in December 1997. Also, as part of the merger, Silverman announced he would reduce his day-to-day involvement with the company and assume the company’s chairmanship in preference of CUC’s founder and CEO Walter Forbes
.
Just months after the merger, in April 1998 Cendant uncovered massive accounting improprieties at CUC and resulted in one of the largest financial scandals of the 1990s. After the accounting scandal was uncovered, Silverman and the Cendant board forced Forbes’ resignation and Silverman assumed the CEO post. Under Silverman, Cendant bounced back from the accounting scandal far outperforming the markets in the early 2000s.
Silverman’s compensation was the subject of scrutiny in 2004. In 2002, on the back of strong performance at Cendant, Silverman signed a 10-year contract that provided for medical benefits, office space as well as travel perks including a corporate airplane and a company car and driver. Of greater attention was the compensation Silverman received in 2003. Silverman’s 2003 compensation was estimated at $60 million, which included $14 million in cash salary and bonus, $37 million in stock options and $4.6 million paid as premiums on a company funded life insurance policy.
In September 2006, Silverman championed the separation of Cendant Corporation into four independent companies. Cendant spun off its real estate brokerage division, Realogy
which was sold to Apollo Global Management and sold its travel distribution services division, Travelport
, to The Blackstone Group. Cendant’s hospitality services division, is now a separate company Wyndham Worldwide
. The remaining Cendant Corporation, which renamed itself Avis Budget Group
, operates the company’s car rental businesses.
firm.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investor. Silverman is best known for his role in building Cendant Corporation into a multibillion dollar business services company that provided car rentals, travel reservation services as well as real estate brokerage services and was also the largest franchisor of hotels globally.
Among the brands that Silverman controlled included hotels and motels such as AmeriHost Inn
AmeriHost Inn
AmeriHost Inn was a small chain of hotels located in the United States and Canada. The chain consisted of two-or-three story interior corridor buildings constructed based on the company's prototype designs. This usually meant a long, 2- or 3-story building with a gabled or sloped lobby and public...
, Days Inn
Days Inn
Days Inn is a motel chain headquartered in the United States. Founded in 1970, it is now a part of the Wyndham Hotel Group, based in Parsippany, New Jersey, which was formerly a part of Cendant...
, Howard Johnson's
Howard Johnson's
Howard Johnson's is a chain of hotels and restaurants, located primarily throughout the United States and Canada. Throughout the 1960s and 1970s, Howard Johnson's was the largest restaurant chain in the United States, with over 1,000 restaurants...
, Ramada
Ramada
Ramada is a hotel chain owned and operated by Wyndham Worldwide.- History :The lodging chain was founded in 1953 by longtime Chicago restaurateur Marion W...
, Super 8
Super 8 Motels
Super 8 Hotels Inc. is the world's largest budget hotel chain, with hotels in the United States and Canada, as well as newer properties in China. The company is a subsidiary of Wyndham Worldwide, formerly a part of Cendant.-History:...
and Travelodge
Travelodge
Travelodge refers to several hotel chains around the world. Current operations include: the United States, Canada, the United Kingdom, Spain, the Republic of Ireland, New Zealand and Australia...
; car rental operators such as Avis Rent a Car System
Avis Rent A Car System
Avis Rent a Car System, LLC is a car rental company headquartered in Parsippany-Troy Hills Township, New Jersey, United States. Avis, Budget Rent a Car and Budget Truck Rental are all units of Avis Budget Group....
and Budget Rent a Car
Budget Rent a Car
Budget Rent a Car System, Inc. is an American car rental company that was founded in 1958 in Los Angeles, California by Morris Mirkin. Budget's operations are headquartered in Parsippany-Troy Hills Township, New Jersey....
; real estate brokerages such as Coldwell Banker
Coldwell Banker
Coldwell Banker is a large real estate franchise founded in 1906 in San Francisco.Coldwell Banker has an international presence, with offices on six continents, 46 countries and territories...
, Century 21 Real Estate
Century 21 Real Estate
Century 21 Real Estate LLC is a real estate agent franchise company founded in 1971. The Century 21 System consists of over 8,000 independently owned and operated offices. Other examples of such a system are Coldwell Banker, Engel & Völkers, ERA Real Estate, ...Century 21 has offices in more than...
and Sotheby's International Realty
Sotheby's International Realty
Sotheby’s International Realty is a luxury real estate brokerage agency that offers a collection of luxury homes, estates and properties for sale throughout the world. It is owned by parent company Realogy, which was spun off in July 2006 from former parent company Cendant. Sotheby’s has real...
; as well as Orbitz Worldwide.
Early career (1965-1990)
Silverman began his career in business as an assistant to Steve Ross, who was then assembling the future Warner Communications. Silverman had graduated from Williams CollegeWilliams College
Williams College is a private liberal arts college located in Williamstown, Massachusetts, United States. It was established in 1793 with funds from the estate of Ephraim Williams. Originally a men's college, Williams became co-educational in 1970. Fraternities were also phased out during this...
with a BA in Art History in 1961 and spent the following three years earning a JD from the University of Pennsylvania, where he graduated in 1964. Silverman left the job with Ross, which had been secured by Silverman’s father, a well known businessman himself, to join White, Weld & Company an investment banking firm.
After a short stint in investment banking, Silverman pursued a number of entrepreneurial ventures in the late 1960s and through the 1970s. In 1984, Silverman joined Reliance Group Holdings, which was run by corporate raider Saul Steinberg
Saul Steinberg
Saul Steinberg was a Romanian-born American cartoonist and illustrator, best known for his work for The New Yorker.-Biography:...
. In 1986, Silverman and Steinberg co-founded Univision
Univision
Univision is a Spanish-language television network in the United States. It has the largest audience of Spanish language television viewers according to Nielsen ratings. Randy Falco, COO, has been in charge of the company since the departure of Univision Communications president and CEO Joe Uva...
, the Spanish-language television network and served as president and CEO from 1986 through 1990. While at Reliance, Silverman acquired Days Inn
Days Inn
Days Inn is a motel chain headquartered in the United States. Founded in 1970, it is now a part of the Wyndham Hotel Group, based in Parsippany, New Jersey, which was formerly a part of Cendant...
, the US hotel chain in a $590 million deal. Silverman is estimated to have made a $125 million profit on the sale of Days Inn..
In 1990, Silverman accepted a position as partner at Blackstone Group
Blackstone Group
The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
, a private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm. However his tenure at Blackstone was cut short because of litigation between Prudential Insurance, one of Blackstone's largest investors, over a Steinberg deal in which Silverman had been involved. In 1991, he left to head Hospitality Franchise Systems, an investment of Blackstone's that Silverman had overseen. He later build HFS into Cendant Corporation.
Creating Cendant Corporation (1991-2006)
Building on his experience with Days Inn, while at Blackstone Silverman created Hospitality Franchise Systems (HFS) which would acquire a number of hotel franchises. Among Silverman’s purchases were such brands as RamadaRamada
Ramada is a hotel chain owned and operated by Wyndham Worldwide.- History :The lodging chain was founded in 1953 by longtime Chicago restaurateur Marion W...
and Howard Johnson's
Howard Johnson's
Howard Johnson's is a chain of hotels and restaurants, located primarily throughout the United States and Canada. Throughout the 1960s and 1970s, Howard Johnson's was the largest restaurant chain in the United States, with over 1,000 restaurants...
as well as Days Inn
Days Inn
Days Inn is a motel chain headquartered in the United States. Founded in 1970, it is now a part of the Wyndham Hotel Group, based in Parsippany, New Jersey, which was formerly a part of Cendant...
, which he was able to buy for $290 million (almost half what he had sold it for) after the company had filed for bankruptcy in 1991. Hospitality Franchise Systems went public in a 1992 IPO.
HFS was among the fastest growing companies of its size in the 1990s and the company’s stock had risen from its IPO price of $4 per share to $77 per share by 1998. However in 1998, Silverman led Cendant into what would prove a disastrous merger with CUC, a direct marketing company that operated Shoppers Advantage and Travelers Advantage (now part of Affinion Group. The $14 billion merger of HFS and CUC resulted in Cendant Corporation, which was formed in December 1997. Also, as part of the merger, Silverman announced he would reduce his day-to-day involvement with the company and assume the company’s chairmanship in preference of CUC’s founder and CEO Walter Forbes
Walter Forbes
Walter Forbes is an American business manager and Federal prisoner.He was prosecuted by the U.S. Attorney's Office for the District of New Jersey and convicted of one count of conspiracy to commit securities fraud, and two counts of making false statements, for inflating reported incomes for the...
.
Just months after the merger, in April 1998 Cendant uncovered massive accounting improprieties at CUC and resulted in one of the largest financial scandals of the 1990s. After the accounting scandal was uncovered, Silverman and the Cendant board forced Forbes’ resignation and Silverman assumed the CEO post. Under Silverman, Cendant bounced back from the accounting scandal far outperforming the markets in the early 2000s.
Silverman’s compensation was the subject of scrutiny in 2004. In 2002, on the back of strong performance at Cendant, Silverman signed a 10-year contract that provided for medical benefits, office space as well as travel perks including a corporate airplane and a company car and driver. Of greater attention was the compensation Silverman received in 2003. Silverman’s 2003 compensation was estimated at $60 million, which included $14 million in cash salary and bonus, $37 million in stock options and $4.6 million paid as premiums on a company funded life insurance policy.
In September 2006, Silverman championed the separation of Cendant Corporation into four independent companies. Cendant spun off its real estate brokerage division, Realogy
Realogy
Realogy is a privately owned company that provides real estate and relocation services. It owns and franchises several of the industry's leading real estate brands and brokerages...
which was sold to Apollo Global Management and sold its travel distribution services division, Travelport
Travelport
Travelport is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry...
, to The Blackstone Group. Cendant’s hospitality services division, is now a separate company Wyndham Worldwide
Wyndham Worldwide
Wyndham Worldwide is the holding company for Wyndham Hotels & Resorts, Group RCI and other lodging brands. It was spun off from Cendant Corporation in July 2006....
. The remaining Cendant Corporation, which renamed itself Avis Budget Group
Avis Budget Group
Avis Budget Group, Inc. operates Avis Rent A Car System, LLC , Budget Rent A Car System, Inc. and Budget Truck Rental, LLC...
, operates the company’s car rental businesses.
Since 2006
In February 2009, Silverman assumed a position as chief operating officer of Apollo Global Management, a New York-based private equityPrivate equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm.