The original version of this article appeared on TheInertia.
The investment firm Late Apex Partners (LAP) has called for an executive overhaul of Vail Resorts, the publicly traded company that owns and operates 42 mountain resorts around the world and has reshaped the entire ski industry since its introduction of the Epic Pass in 2008.
The firm, which manages funds currently invested in Vail Resorts, called for “overdue changes” in a letter sent to board members of Vail Resorts on Monday. It demanded the ouster of current CEO Kirsten Lynch, CFO Angela Korch, and Executive Chairman Rob Katz, and shared an 88-page presentation outlining the company’s “path forward.”
“We believe Vail has world-class assets, a world-class heritage, and world-class financial potential,” LAP wrote in the letter signed by investor Taylor G. Schmidt. “However, over the past five years, Vail’s performance has been unacceptable. We believe Vail is fixable, but the Board must act now to hold management accountable.”
Vail has made weekly headlines this winter due to coverage of a labor dispute and the 13-day strike by Park City Mountain’s ski patrollers, which ended in early January. Public response online was largely negative, including stories of 3-hour lift line waits during the patrollers’ strike, letters written by union leaders criticizing Vail’s tactics, and even an investigation into allegations that Vail and Park City executives “engaged in securities fraud or other unlawful business practices.’”
But the ongoing labor dispute wasn’t even mentioned in the investment firm’s letter. Instead, the firm’s argument focuses on the bottom line — and how replacing Vail Resort’s executives could help revitalize the company.
Vail Resorts didn’t immediately respond to requests for comment on Thursday morning.
‘No Skin in the Game’
The letter outlines four core problems plaguing the company and, therefore, hurting shareholder value. First up is a disconnect between the incentives of Lynch and Korch and the shareholders that LAP represents. Lynch has been paid $19 million over the past 3 years, for example, while free cash flow has decreased by 15%.
“Management have no skin in the game, signaling zero conviction in Vail’s future: Since becoming CEO, Lynch has not once purchased MTN shares, while CFO Korch owns less than $0.5M in stock,” they wrote.
Second, the letter says the $2 billion invested in mergers and acquisitions and capital expenditure hasn’t created any value, and “guest experience has deteriorated.” They argue it cost the company its ability to reinvest “into high-return initiatives and its key asset: customer experience and goodwill.”
“Vail has virtually endless opportunities to reinvest into the business, grow its competitive advantages, and grow the sport. Competitors are eating Vail’s lunch, and management is asleep at the wheel,” LAP wrote.
The most colorful piece of the letter is LAP’s fourth point, which referenced the public’s claim that Vail has become an “evil empire.”
“The core skiing community has labeled Vail the ‘Evil Empire.’ Vail’s marketing reductions, and decision to centralize marketing under CEO Lynch has created significant gaps, been inauthentic, and cut out the heart of each mountain,” the letter said. “Management’s incredibly short-sighted actions have led to lost opportunities and destroyed brand value.”
Vail Resorts Inc. (MTN: NYSE) shares took a notable dip the first week of January amid the ongoing strike.
On Dec. 10, 2024, shares were trading above $195. The Park City Professional Ski Patrol Association authorized its strike within the next week, and MTN shares fell to $175 on Jan. 2, 2025. As of the end of the trading day on Jan. 28, 2025, a full business day after LAP’s letter, its stock price was down again to $169.