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Plus, a straight-talking CEO; Philip Morris announces a Kraft-y move; former Leslie Fay CFO sentenced; and more.
CFO Staff, CFO Magazine
April 1, 2002
In 1998, Solectron Corp.'s Susan Wang said the secret of being a female Fortune 1,000 CFO was "to surround yourself with good support, including a good baby-sitter and a good assistant." Wang no longer requires either. She retired from embattled Solectron in January.
The move was called a "planned transition," and indeed Wang stepped out of the CFO role last September to become EVP of corporate development when current CFO Kirin Patel joined the firm. Patel, who came to the electronics maker from iMotors, a Web-based used-car retailer, will now also assume that role. Previously, Patel had been with Cummins Inc. for 27 years.
Tony Boase, an analyst at A.G. Edwards, says that "Susan Wang was a very good CFO. She took Solectron from a small company to a multi-billion-dollar firm." Solectron had gotten so large, Boase says, that it made sense to split the CFO position in two. With Patel now handling both roles, some could argue that Wang was pushed out, but Boase thinks the reshuffling followed careful deliberation rather than a reaction to sinking company fortunes.
In her 18 years at Solectron, Wang oversaw the company's initial public offering and its spectacular rise to become a $2.7 billion manufacturing giant. The company has recently stumbled: its stock price is off its 52-week high by 75 percent, and its recent-quarter revenue declined almost 50 percent from the year earlier.
Paul Polishan finally got his numbers. The former Leslie Fay Cos. CFO was sentenced in January to a nine-year prison term with three subsequent years of probation by the U.S. District Court for the Middle District of Pennsylvania. Polishan was convicted in July of manipulating the company's earnings between 1989 and 1993. "This is certainly one of the longest sentences we've seen in the district regarding white-collar crime," says assistant U.S. attorney Bruce Brandler, the lead prosecutor in the case against Polishan.
Such lengthy sentences, adds Brandler, "are not going to be unusual in the future, because of a recent [November 2001] change in sentencing guidelines." Even before the change, crime wasn't paying too well: in April 2000, former Bennett Funding Group CFO Patrick Bennett received a 30-year jail sentence on charges that he bilked investors out of $700 million. Another finance staffer doing time is former Leslie Fay controller Donald Kenia, who is spending 2 years in a federal prison after pleading guilty and cooperating with authorities to convict Polishan.
In this case, the judge considered directly related losses at $10 million to $20 million, despite the U.S. attorney's tally of $460 million. The judge threw out Polishan's request for a sentence reduction based on a "narcissistic-personality disorder," however, after three days of testimony from psychiatric experts. Polishan, who maintains his innocence and is appealing the case, may not be donning the stripes anytime soon. His appeal is expected to take at least a year, and his lawyers are battling to maintain his freedom during the process.
Finally, a CEO who tells it like it is. When CFO Chuck Chokel left Carmel, Ind.-based financial services firm Conseco Inc. in March to "pursue other interests," CEO Gary Wendt wished him well. When the stock tanked after the announcement, Wendt clarified his sentiments. "Chuck did not resign," said Wendt. "His employment was terminated... because I did not believe that he was up to the job." Company president Bill Shea will serve as acting CFO until a replacement is found.
Steven Lumpkin must be feelin' good: he was named CFO of Applebee's International Inc., based in Overland Park, Kans. Lumpkin, former EVP and chief development officer, replaces George Shadid, who was named to the newly created position of COO.
In what some might call a wise move, Edward Goldfinger, CFO of Cambridge, Mass.-based consultancy Sapient Corp., has left the firm. On the same day Goldfinger's resignation was announced, Sapient issued a press release stating that it was laying off 545 employees. SVP Susan Johnson, Sapient's CFO from 1994 through 1999, will serve as acting CFO until a permanent replacement is found.
It's Miller Time
In a Kraft-y move, New Yorkbased Philip Morris Cos. has announced its plans to elect CFO Louis Camilleri as president and CEO, effective after the company's annual stockholders' meeting this month. Camilleri, who has served as Philip Morris's CFO and SVP since 1996, replaces Geoffrey Bible, who continues as chairman of the consumer packaged-goods producer until his scheduled retirement in August.
It seems that 7-Eleven Inc. needed some change. The Dallas-based convenience retailer named Edward Moneypenny to the CFO post. Moneypenny was formerly CFO of Covanta Energy Corp., in Fairfield, N.J. Robert Shapard was named as Moneypenny's successor at Covanta.
In the Market
We wonder if Terry Hungle phoned in his resignation from Ontario-based Nortel Networks Corp. Named CFO of the telecommunications-equipment provider in October 2001, he resigned in February amid allegations that he broke Nortel's rules on stock trading by executives when he was VP, finance and business development Americas. Frank Dunn, Nortel's president and CEO, will take on the job of acting CFO until a permanent replacement is found.
Warren Jenson is parking his shopping cart elsewhere; he has resigned as CFO of Amazon .com Inc. Jenson, who has been finance chief at the Seattle-based online store since September 1999, will stay at the company to help in its search for his successor.