Dive Brief:
- Jiří Ponrt, a partner in Groupon’s largest shareholder, Pale Fire Capital, is taking on the e-commerce company’s CFO seat — the latest in a series of sweeping changes in its senior management, according to a Thursday filing with the Securities and Exchange Commission.
- Ponrt is replacing Groupon veteran Damien Schmitz, who became interim finance chief for the Chicago, Ill-based company in November 2021 after serving as its senior vice president of finance, according to his LinkedIn profile. Schmitz will be leaving the company, Groupon confirmed to CFO Dive in an email.
- Pale Fire Capital, a private equity investment group based in the Czech Republic, became Groupon’s largest shareholder in 2022, first investing in the company last January. The company then appointed several of its partners to roles within the firm’s management team. It appointed two executives to its board of directors and tapped Vojtěch Ryšánek, the former Chief Technology Officer for its fellow portfolio company Aukro.cz, as interim CTO for Groupon.
Dive Insight:
As Groupon’s finance chief, Ponrt will receive an annual base salary of approximately $450,000, according to the company filing, and will be eligible for an annual target cash bonus of 100% of his base. He plans to relocate to Groupon’s U.S. headquarters in Chicago, the company said in a press release.
Ponrt’s appointment follows that of Pale Fire co-founder Dušan Šenkypl to Groupon’s interim CEO seat in late March, a leadership change that followed “disappointing” fourth quarter results for the struggling e-commerce marketplace, Pale Fire said in a press release.
Šenkypl was appointed to Groupon’s board of directors in June, several months after the Czech company became its largest shareholder with a current stake of about 22%, Pale Fire said. Both Ponrt and Šenkypl stepped down from their day-to-day Pale Fire responsibilities upon taking these roles, according to both companies.
Groupon reported $148.2 million in revenue for its fourth quarter, a decline of 34% compared to 2021, according to its earnings results released March 16. For the full year, the company reported $599.1 million in revenue, down 38% year-over-year, and ended 2022 with 19 million active customers.
Both Ponrt and Šenkypl also took on their roles after Groupon announced it had identified a “material weakness in our internal control over financial reporting,” it said in its 2022 annual report filed March 16 with the SEC.
The weakness, if not corrected or if combined with additional identified weaknesses should they appear, could “impair our ability to report accurate and timely financial information, adversely affect investor confidence and have a material and adverse effect on our financial condition and results of operations,” the company said.
A key part of Ponrt’s focus as CFO will be “embedding financial rigor throughout the business, streamlining and simplifying internal processes and working closely with the leadership team to successfully utilize financial data to inform operational decision making and strategy,” Šenkypl said in a statement sent to CFO Dive.
Ponrt was appointed to the role on the recommendation of Šenkypl, according to a separate Pale Fire release regarding the move.
Kedar Deshpande, who served as CEO and as a member of the board for the e-commerce company from December 2021 until Šenkypl’s appointment — when he stepped down from both positions — admitted during its fourth quarter earnings call that the company “was not living up to its full potential.” However, the company is taking “meaningful steps” to improve the business by focusing on improving its cost structure, its supply chain and inventory base, he said. Deshpande will remain with the company until at least June 1 to allow for a smooth transition, Groupon said.
As part of its savings plan, Groupon plans to eliminate 500 positions globally, reductions which will be complete by the second quarter of this year, Deshpande said.
