Sunstone Hotel Investors, Irvine, California, has promoted Bryan Giglia to CEO, replacing John Arabia, who resigned in September 2021.
Additionally, the company board appointed Robert Springer, chief investment officer, to the additional role of president. Aaron Reyes, senior vice president of finance and treasurer, has been appointed chief financial officer, replacing Giglia. Douglas Pasquale, chairman and interim CEO, will assume the role of executive chairman through August 2022.
In reviewing the news, R.W. Baird analyst Michael Bellisario called the moves the least expensive and most frictionless changes. “The door is left slightly open, in our opinion, from the perspective of shareholders wanting to push for more change and/or an eventual sale of the company, particularly if progress is not made on closing the valuation discount over the near term,” he wrote.
At the same time, Bellisario said the moves leave unanswered questions regarding go-forward strategy as this is essentially the same team. “Change and progress will need to be demonstrated quickly,” he wrote.
The 8-K filing shows that Pasquale will receive a US$1.8 million cash bonus based on his performance as interim CEO. Giglia and Springer will receive one-time equity-based awards.
“After an extensive and thorough search process, including internal and external candidates, the Board selected Bryan as CEO and Robert as president to lead Sunstone as we pursue superior long-term per share NAV growth,” Pasquale said. “This was based on their decades of hotel industry experience, deep knowledge and understanding of the company, ability to immediately build on our recent success of recycling capital, and capability to execute on property-level value creation opportunities. My focus as executive chairman will be to provide guidance to Bryan, Robert and Aaron as they transition into their roles.”