Thursday, March 09, 2017

The Diamond Chronicles, Part 3: Back to the Future with an Executive Shuffle

By Jeff Weir, RedWeek's Chief Correspondent

LAS VEGAS --- In a town known for rolling the dice, Diamond Resorts recently made a huge gamble by staking its future on a chief executive who was previously responsible for crafting the sales and marketing programs of Diamond's past --- programs that drew widespread consumer criticism, lawsuits and regulatory crackdowns on Diamond's headquarters in the gambling capital of the world.

With a nod to the hit-movie franchise, one could readily title Diamond's latest corporate move as “Back to the Future: The Executive Shuffle."

Here's a factual synopsis for Diamond's movie:

On March 3, Diamond celebrated the five-week anniversary of its new, supposedly consumer-friendly sales programs (dubbed Clarity and Promise) by announcing the sudden retirement of CEO Matthew Avril and the appointment of Michael Flaskey --- the chief operating officer and former vice president and head of sales and marketing at Diamond since 2010 --- as Avril's successor.  Flaskey is the sponsor of Clarity and Promise, so his promotion may seem to make perfect sense.

However, Flaskey is also Diamond's third CEO in four months --- probably a record in corporate turnover.  He replaces a former Starwood executive who served only 62 days as Diamond's CEO.  Avril replaced ex-CEO David Palmer on Jan. 1.  Avril resigned March 3, shortly after the ink had dried on his new CEO business cards, but intends to continue serving Diamond as an advisor.  His abrupt retirement was attributed by Diamond to “family and personal reasons," which is sometimes corporate-speak for an action that otherwise rhymes with words first made famous by President Trump: "you're fired."

Hard to know for sure, since Diamond isn't talking about any of this.  Days after the announcement of Flaskey's promotion, Diamond's website still listed Avril as CEO.  Diamond's announcement about Flaskey was nowhere to be found on Diamond's website, either.

Flaskey, 48, takes over Diamond at a crucial time as it transitions from a public company to a private timeshare vacation club owned by affiliates of Apollo Global Management, an investment company.  No one knows who the “affiliates" are, but they ponied up $2.2 billion to buy Diamond.  Timeshare board members who have ongoing and direct dealings with Diamond have one word for all of these corporate changes: “chaos."

According to his official bio, Flaskey gained success by cultivating Diamond's alliances with celebrities, professional athletes, golfers, country music stars and NASCAR drivers.  Understandable, since Flaskey was a highly-decorated jock who graduated from Limestone College, a Christian, non-denominational liberal arts college in Gaffney, South Carolina, in 1990 with a bachelor of science degree in Physical Education.  He was an NAIA all-star left fielder and captain of the Limestone Saints baseball team for three years.  His coach was Hall of Fame spitball pitcher Gaylord Perry.

Here is a friendly link to Flaskey's illustrious athletic career at Limestone College, where he was named to the Athletics Hall of Fame.

Most of Diamond's public announcements during the past two years reflect Flaskey's focus on celebrity-and-sports programming, including Diamond's sponsorship of Daytona races, country music, golf tournaments and charity fundraising (through golf tournaments), celebrity chefs, Mother's Day TV shows, kids' camp in Cabo San Lucas, and more celebrity charity golf events.

Last August, Flaskey even signed up his former Limestone baseball coach, Hall of Famer Gaylord Perry, for a two-day “Events of a Lifetime" program for the unveiling of Perry's statue at AT&T Park in San Francisco.

Diamond has been similarly successful, financially, since Flaskey started running its North American sales machine in 2010.  In 2014, Diamond promoted him to VP and head of all sales and marketing.  They've paid him well for his efforts, including a $6.8 million compensation package (salary and stock) for 2016, according to online compensation-tracking services.

The downside of Flaskey's success has been a two-year, drip-drip-drip of accusations against Diamond's sales teams, in various locations, for deceiving potential buyers and using hard-sell tactics to get them to buy points in Diamond's travel club.  In December, those allegations prompted Diamond to pay an $800,000 fine to settle an investigation of unfair business practices by the Arizona Attorney General.  In January, an Arizona couple in their mid-70s filed a $1 billion, “elder-abuse" class-action lawsuit against Diamond, claiming they were misled and duped into paying over $100,000, over three years, at five separate sales presentations, to upgrade their memberships.  These issues belong to Flaskey, since they happened on his watch as head of sales.

To counter the bad publicity --- and to comply with the Arizona AG's settlement agreement --- Flaskey announced in late January that Diamond would implement industry-leading, ethical sales practices, and provide more disclosures to buyers at point-of-sale.  All of the promised consumer friendly changes are part of the Diamond's new Clarity-and-Promise program.

No matter what your perspective, Flaskey has a lot on his plate in a job where there is no such thing as tenure. He declined to be interviewed for this article.

In addition to promoting Flaskey to CEO, Diamond gave another title to Ken Siegel, its general counsel and CAO. From here on out, he's also president of Diamond Resorts.  Siegel's background includes managing Starwood's “asset-light" strategy prior to its purchase last year by the ILG travel conglomerate.

Flaskey, Siegel, Avril and Palmer are not the only executives shuffling in and out of Diamond Resorts' executive headquarters in Las Vegas.  From what we can tell, another executive is also missing...

Forget Waldo.  Where's Frank Goeckel???  Diamond Exec MIA

Do you know this man?  This is Diamond Senior VP Frank Goeckel.  If you've seen him recently, please contact this blog, because Goeckel appears to be missing-in-action.

In its rush to announce the promotions of Flaskey and Siegel, Diamond's public relations department, headed for now by Stevi Wara, forgot or deliberately neglected to announce the departure of another major figure in Diamond's timeshare universe: Senior VP Frank Goeckel, who handled Diamond's management of legacy HOA resorts, among other chores.  He also reported directly to Avril (and his predecessor, Palmer).

Among Diamond timeshare owners and board members at various resorts, Goeckel is more well-known than Palmer, Flaskey, Siegel and Avril, combined.  Goeckel has been “everywhere" for Diamond since 2010, heading business development, industry relations and HOA boards.  One of his roles has been targeting potential resorts that might be ripe for Diamond management.  He's also served as a corporate representative on at least 27 HOA boards and worked with 80 others (according to his 2015 resume). In 2015, Goeckel was Diamond's designated man on six timeshare boards: Tahoe Seasons (Lake Tahoe), The Point at Poipu (Kauai), Cypress Point (Orlando), Desert Isles (Palm Springs), Casitas at Rancho Manana (Cave Creek, Arizona) and Fairway Forest Resort (North Carolina).

While administering these responsibilities, Goeckel developed a unique and unprecedented ability to annoy owners and board members, many of whom have contacted about their distaste for Diamond's point man.  At one resort, the Tahoe Beach and Ski Club in Lake Tahoe, Goeckel was unaffectionately known by owners as “the man they love to hate" because of his dogged devotion to Diamond's corporate ideology --- which appeared to be, take over the resort at all costs, make no apologies and take no prisoners, especially longtime owners.

For example: in 2015, RedWeek attended a rancorous HOA membership meeting where Goeckel told Tahoe Beach owners, confidently and defiantly, that if they didn't elect him to the board that year, he'd get on next year.  “Diamond is not going anywhere," he said.  At the 2016 annual meeting, where he explained Diamond's interests in taking ownership of Tahoe Beach timeshares to feed Diamond's trust-and-points program, owners and board members vilified Goeckel as a “bully" who intimidates owners on behalf of Diamond's alleged takeover strategy.

For the record, Goeckel did not run for the Tahoe Beach board in 2016, but kept everyone in suspense that he might until the annual election day roll-call in September 2016.   Diamond, FYI, is still pursuing a complicated lawsuit against the Tahoe Beach board for refusing to accept Diamond's purchase of 245.5 HOA units in December 2014.  The man behind that lawsuit, according to the Tahoe Beach board, was Goeckel.  Today, the board is eagerly waiting for Diamond to name his replacement --- and dismiss the lawsuit.  Owners at Tahoe Beach, meanwhile, are celebrating.

Rumors about Goeckel's departure from Diamond started circulating last October but grew to a crescendo in late February, but none of them were ever confirmed by Diamond, Goeckel or his many associates at Diamond.  Goeckel's phone and email still work, but no one answers.  Professional managers at other timeshare companies, however, confirmed his leave-taking, repeatedly, and passed along this additional tidbit: Goeckel allegedly received $2 million in severance pay for the privilege of leaving Diamond Resorts.

That $2 million buyout, if accurate, was no doubt paid 100 percent from the maintenance fees of Diamond owners who, to this day, complain about increases in their annual club dues.

Here is Diamond's Side of the Story

If you are interested in reading what Diamond had to say about the promotions of Flaskey and Siegel, here's the company press release.

1 comment:

  1. Anonymous5:29 PM

    My wife an i were in sales meeting for 14 hrs. till we signed. That was last Dec. the next day we used the 7 day back out to get out of contract. Now i am looking to end my contract with them. Any good timeshare attorneys?