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Squibb Kick: Did Bristol-Myers Boot its Finance Chief?

Shakeup continuing at health-care products maker. Also: Siemens gets new CFO for U.S. operations, and how are Andersen's partners faring at other companies?
Lisa Yoon, CFO.com | US
April 17, 2002

>> Pharmaceuticals giant Bristol-Myers Squibb announced that CFO Frederick Schiff, a 20-year veteran at the company, will be leaving his post. CEO Peter Dolan said Harrison Bains, vice president for tax and treasury, would serve as acting finance chief until company hires permanent replacement… One April 3, Dolan kicked off a series of changes in the corporate offices of company. At time, CEO said: "These management changes are clearly necessary in light of the company's recent performance." Dolan's been particularly worried about wholesaler inventory levels in company's U.S. pharmaceutical business. Apparently, incentives for wholesalers led to the surplusage.

Is Schiff being blamed, in part, for drug-maker's performance? Hard to say. All company said was Schiff, who was promoted to CFO from SVP, comptroller spot a year ago, was leaving "to pursue other opportunities." Noted Dolan: "As I said previously, I am taking steps to strengthen our company's organizational structure as part of our plan to improve performance. As part of this process, I had begun working on CFO succession."

But one analyst found Schiff's departure "surprising," according to Reuters...Richard Evans of Sanford Bernstein called Schiff "a capable CFO" and doesn't think "this insulates anyone else at the company from culpability over the inventory issue," the news service reported...

Bains has been with Bristol-Myers Squibb for 13 years, serving in several finance positions, including investor relations and internal audit. Other recent departees from Bristol-Myers-Squibb: Richard Lane, president of company's medicine business, and Tim Cost, former VP of investor relations…

Sales at drug maker for Q1 2002 will likely decline approximately 7 percent from Q1 2001. Last year, company paid up to $2 billion for a stake in ImClone Systems and its cancer drug Erbitux. Three months later, FDA refused to approve Erbitux. Like many other drug makers, Bristol-Myers Squibb has also had some difficulties developing new medicines to replace ones whose patents have expired.

>> Siemens Corp., U.S. operations of German electronics giant Siemens AG, named Klaus Stegemann CFO. Stegemann was previously CFO of angiography, fluoroscopy and radiographic systems business of Siemens AG Medical Solutions in Germany. Try fitting that on a business card… Stegemann replaces Gerald Wright. Wright was named CFO of Siemens Canada earlier in year…

Stegemann's main role will be to help see company through global economic slump, particularly in telecom industry. Industry watchers say Siemens has been hurt by performance of its mobile-phone busines. Stegemann also expected to help strengthen ties with corporate parent…

"Klaus brings to our U.S. organization the financial strategies and tools to successfully navigate Siemens through an increasingly competitive environment," says Siemens CEO Klaus Kleinfeld. "I am confident he will help us forge a stronger dialogue between the global groups, U.S. operating companies, Siemens Corporation and Siemens AG, to meet our stringent performance metrics in the U.S."

A Siemens lifer, Stegemann worked on projects in both the U.S. and Germany with company's transportation systems, automation and drives, power generation, industrial solutions and services, and medical businesses. Also spent some time at Siemens AG Corporate headquarters… Earlier in his career, Stegemann served in various positions in accounting, reporting, and planning at several major Siemens businesses in Germany…

Speaking of Germany: management at SAP Systems Integration AG said Monday that CFO Joerg Vandreier resigned, effective June 30. In a brief statement, IT consultancy -- majority-owned by German software maker SAP AG -- said only that supervisory board has accepted Vandreier's resignation with regret.

>> Hotspot FX Inc., privately held electronic trading network for foreign exchange markets, announced appointment of Bernie Siegel as CFO… Most recently Siegel served as CEO and CFO of Yazam Inc., an early-stage technology investment firm. There, he oversaw company's worldwide expansion, several strategic acquisitions, and investments in more than 30 IT companies…

Prior to Yazam, Siegel held CFO positions at financial-services firms Wit Capital Group, TD Waterhouse Securities, and Fleet Financial Group's Securities broker-dealer. At Wit Capital, Siegel helped raise over $75 million in private equity capital from institutional investors such as Goldman Sachs... In 1999, Siegel took Wit public… Siegel is a CPA and a certified fraud examiner. These days, that can come in handy.

Short Takes
>> Martin Welch III, former chief financial officer at Kmart, received $1.3 million in severance pay, according to published reports…

>> Andersen partners who leave to become corporate CFOs wind up fetching smaller base salaries than their peers from the other Big Five accounting firms. This, according to forbes.com, citing a study by headhunter Foster Partners.




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