Delta Postscript

At Delta, in with the new CEO, out with the old CFO.
CFO StaffJanuary 1, 1998

Delta Postscript.

Our recent feature about the bad blood that existed between Delta Air Lines Inc. CEO Ronald W. Allen and CFO Thomas J. Roeck Jr. before Allen’s ouster (“In-Flight Infight,” December 1997) examined whether Roeck himself might be headed for the door. New CEOs often decide to clean house, and the first room swept is often the finance chief’s office.

The broom came to Roeck on November 20, just as CFO was going to press. Delta announced the 53-year-old Roeck was retiring, and new CEO Leo Mullin told one reporter that he wants the new CFO to be “a real leader capable of being at my side in the various strategic challenges that lie ahead.” Delta has initiated an outside search. Until the new person is found, 31-year-old Edward West, VP of financial planning and analysis, will serve as acting CFO.

While he claimed that no particular event led to Roeck’s replacing, Mullin said he didn’t expect many more changes in what he called a strong management team. Ironically, the Delta board had uniformly considered Roeck to be one of management’s strongest members. Indeed, senior director Jesse Hill Jr. said that if he were coming in as CEO, he wouldn’t change CFOs “just for the sake of a team.”

For his part, Roeck told another reporter: “The finance function and the CEO have got to be hand in glove. The fit was not exactly what it should have been” with Mullin, former vice chairman of utility holding company Unicom Corp. Roeck, who declined to comment further, said he was leaving Delta to pursue other professional interests.

Power Outages

Chairman of Entergy Corp. Ed Lupberger is exercising the power of the top office. He asked for the resignation of Gerald D. McInvale, vice chairman and CFO, and Terry Ogletree, president of the company’s international subsidiary. In a statement, Lupberger said he will emphasize teamwork and corporate values as he restructures the executive staff. He also said he will fill both positions himself until successors can be found.

* It’s also time for W. Craig Barber to find his next meal ticket. He resigned as EVP and CFO of Shoney’s Inc., a restaurant chain headquartered in Nashville. “His optimism and problem-solving abilities will be missed,” says Shoney’s chairman C. Stephen Lynn. A replacement has yet to be named. * The parting of Medical Resources Inc. and its former CFO, John P. O’Malley, was less amicable. A company spokesperson said O’Malley was “removed.” Also, former president and COO William D. Farrell and former general counsel Gary I. Fields resigned. The three had raised questions about fees paid to a related company, and called for the resignation of chairman Gary N. Siegler. An independent investigation has been launched, and Dennis T. Currier has been installed as CFO.

Chasing Academia

Peter J. Tobin made a substantial withdrawal from The Chase Manhattan Corp. The former CFO retired to become dean at the College of Business Administration of St. John’s University in New York. At age 54, Tobin has survived two major mergers: Chemical Banking Corp.’s merger with Manufacturers Hanover Corp., where he was CFO, and Chase’s 1996 merger with Chemical.

* Better get Frank Gatti a No. 2 pencil. He was recently named VP, treasurer, and CFO of Educational Testing Service, the Princeton, N.J., organization that administers such admission tests as the SATs. We’re not surprised Gatti left his job as corporate VP of financial management at New York Times Co. to join a nonprofit. Last summer, we praised him and his friends at the Financial Executives Institute for their volunteer efforts for nonprofits (see “A Higher Reward,” August 1997). * Kevin McAleer could see the writing on the wall, so he resigned as CFO of American Pad & Paper Co. in Dallas. His duties will be assumed by VP and controller William W. Solomon Jr. until a replacement can be found. McAleer’s resignation was “mutually agreed upon.” * The next time you see Joseph Scirocco, he’ll be wearing his heart on his sleeve. That’s because he was recently named CFO of Tommy Hilfiger U.S.A. Inc. He was also named VP and treasurer of parent Tommy Hilfiger Corp., replacing Lester M.Y. Ma, who will remain on the board. Before joining the men’s and children’s apparel marketer, Scirocco was a partner at Price Waterhouse LLP.

A Clean Break

It all worked out in the wash for Karen M. Rose., who was named CFO of The Clorox Co. The former VP and treasurer succeeds William F. Ausfahl, who retired from the Oakland, Calif., household-products company. Scott House, former director of finance at the international division, replaced Rose as VP and treasurer.

Neal E. Schmale is moving through the pipeline. He was named EVP and CFO of Pacific Enterprises in Los Angeles, the nation’s largest natural-gas company. He succeeds Larry J. Dagley, who resigned last May.

In & Out.

Charles H. Noski packed up his family and moved 3,000 miles from Los Angeles to Hartford, where he had accepted a job as EVP and CFO of United Technologies Corp. after leaving his job as vice chairman and CFO of Hughes Electronics Corp. “I thought Connecticut would be a nice change of pace,” he says. He bought a house and settled into the job, even traveling to India for a meeting of UT’s board. But just six weeks later, he put the house up for sale and was on his way back to California. “It was quite a wild few weeks,” says Noski. “One week I was riding an elephant in India, and the next week I was at a press conference,” where he announced he was returning to Hughes as president of the Los Angeles-based electronics and communication satellite company.

While Noski says he enjoyed his short stay at UT, the situation at Hughes was too good to pass up. “One of the reasons I came back was the opportunity to work closely with Mike Smith,” says Noski. Smith, also a former CFO and the brother of General Motors Corp. chairman Jack Smith, was named chairman of Hughes when C. Michael Armstrong was tapped to become chairman and CEO of AT&T Corp. “It’s also an outstanding opportunity to assume a broad operating management role,” adds Noski.

But returning to Hughes has not meant a reprieve from all the traveling. Noski’s first order of business was a road show around the country to introduce investors and analysts to the new management team.