Pat Pacious is out as CEO of Choice Hotels after nearly nine years. Dom Dragisich, the chief growth and strategy officer, gets the top job on an interim basis. A search for a permanent successor has begun.

Pacious walks with substantially the same package he negotiated in 2022, including two times salary and bonus, and up to $50,000 in legal and PR costs. Mutual non-disparagement, both ways. 

Dragisich is an insider, which is either good or bad news, depending on your perspective. He was CFO for several years, ran the $675 million Radisson deal, and served as president of the shell company built for the $7.8 billion hostile run at Wyndham that collapsed. 

At Thursday's shareholder meeting, Dragisich recited the company's playbook that he helped create with Pacious. He'll be picking up the pace of hotel development while tilting Choice's mix toward higher-revenue brands. He'll also be adding AI tools that promise to help franchisees. 

These are the same notes Pacious played on an April earnings call.

Mysteries remain. Why would a board that still believed in the plan change the CEO who co-wrote it? And if the board had lost faith in the plan, then why would it back an insider who co-wrote it? 

Some theories of what may have happened, in no particular order: 

1) The board had been grooming Dragisich for some time (as shown by the new responsibilities they've given him in recent years). Maybe Pacious resisted an orderly succession. 

2.) Choice had a rough first quarter, and the company decided to make Pacious the fall guy. 

3.) The Bainum family and Baron Capital, which have a controlling vote share on the board, want to do something, such as reignite a hostile bid for Wyndham. Perhaps Pacious didn't agree with whatever the unpublicized plan might be. Perhaps Pacious didn't agree with whatever the unpublicized plan might be, or wasn’t seen as up to that particular task.

All of these are just speculations. Let us know what actually happened. Send us tips and scoops. Email Luke Martin ([email protected]) and me ([email protected]).

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