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Penny Pritzker’s directorship status changed at Hyatt

Hyatt Hotels Corp. has changed Penny Pritzker's directorship status; she is no longer considered an independent director at the company, the Wall Street Journal reported. The company, which Pritzker's family controls, made its initial public offering last fall. Hyatt's executive chairman, Thomas Pritzker, is Penny Pritzker's first cousin.

Pritzker's directorship status changed because she took over within the past year as president of a family enterprise that leases the office space to Hyatt for its corporate headquarters in Chicago, said a spokeswoman for her.... Pritzker's new duties apparently made her dealings with Hyatt "material" enough to disqualify her as independent.

According to the report, last fall, when Pritzker was designated an independent director, "various family businesses where she was chairman or president did about $3 million a year in transactions with Hyatt." In an earlier Journal article, observers had questioned her status as an independent director.

The Journal report noted that "Some corporate governance experts also question the independence designation still given to two other directors who have outside business ties to the Hyatt or the Pritzker family." The article added:

Without those two designations, Hyatt's board wouldn't have the majority of independent directors normally required by the New York Stock Exchange, where the company's shares trade.

The Journal reported that Byron Trott, managing partner of BDT Capital Partners LLC, was determined by Hyatt to be independent "even though a firm where he is president serves as an adviser ‘on a broad range of matters' to Pritzker family trusts ... according to Hyatt's proxy statement. Plus, Pritker trusts are limited partners in a BDT investment fund, the proxy said."

Richard Friedman, a partner and managing director at Goldman Sachs Group Inc., also was designated independent. Goldman served as lead underwriter on Hyatt's initial public stock offering, and in 2009 Hyatt paid Goldman $3.5 million for investment banking and advisory services, the Journal article said. (Source: Wall Street Journal, Aug. 24, 2010.)

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