Just Doing It

Nike CFO resigns.
CFO StaffMarch 1, 1998

It’s not easy to be CFO of a company dominated by the marketing department. Perhaps no one knows that better than Robert Falcone, former CFO of Nike. Falcone says he decided to resign after serving six years in the head finance job of the world’s largest athletic-wear company. Asked why he was leaving, Falcone says that he thinks he “peaked” at Nike, adding that the company “will always be run by marketing people.” Indeed, early reports of his departure suggested that he was being blamed for slowing growth and a failure to grow margins. But Falcone insists that Nike’s problems are “no fault of the finance function.”

It may be that Falcone was frustrated with not having a more strategic role at Nike. Still, president and COO Thomas Clarke remarked, in a company release, “Bob has served Nike well during a period of unprecedented growth.” While Nike looks for a successor to Falcone, controller Robert Harold will take over what is a changing finance department. “The role of finance is being transformed at Nike from one of a provider of capital resources to that of a manager, more involved in allocation of those resources,” says analyst Peter Russ of Laidlaw Global Securities.

Falcone says he plans to look for something in operations, such as CEO or COO of a smaller company. As for Nike, Falcone thinks the company will need a year or so to straighten out problems with its products and inventory, but that it is a fundamentally strong business. “It is still the leading brand in sports and fitness,” he asserts. That said, top management may have to pick up the pace. Falcone suggests he won’t be the only manager leaving Nike as the company tries to “figure it out.”

Side Effects

In what is sure to be a hair-raising move, Robert Salisbury announced plans to resign as CFO of Pharmacia & Upjohn Inc. as soon as a successor can be found. His announcement follows the appointment last year of Fred Hassan as CEO of the maker of such pharmaceuticals as Rogaine. The company, formed by the 1995 merger of Upjohn Co. and Sweden’s Pharmacia AB, has been plagued with slow growth and an exodus of top managers.

  • * Joseph H. Stegmayer found a home at Champion Enterprises Inc., where he was named president of retail operations and CFO. Before joining the Auburn Hills, Mich.-based manufactured-housing maker, Stegmayer was vice chairman of Clayton Homes Inc. He succeeds A. Jacqueline Dout, who left Champion for personal reasons.
  • * Denis M. Slavich will add a jolt to KMR Power Corp. He was named VP and CFO of the Arlington, Va., utility. He was most recently CFO at Morrison Knudsen Corp.
  • * Wall Street analyst James Murren decided to up the ante on one of the companies he follows by becoming its CFO. He took the top finance spot at MGM Grand Inc., after being courted by the Las Vegas casino operator for three years. Murren takes over the role from Alex Yemenidjian, who remains president and COO. Remote Control
    Don’t touch that dial. Zenith Electronics Corp. named its third CFO in as many years when it turned to Robert N. Dangremond, who is also a principal at turnaround specialist Jay Alix & Associates. The Glenview, Ill., maker of TVs and other electronics also named Jeffrey P. Gannon to the CEO post after a four-month search. Zenith has not posted a full-year profit from continuing operations in 14 years.
  • * Former Zenith CFO Roger A. Cregg now resides at Pulte Corp., a Bloomfield Hills, Mich., home builder. He succeeds Michael D. Hollerbach, who left to pursue other interests.
  • * The new dough boy at The Pillsbury Co. turns out to be Robert E. Briggs. The former president of Arby’s International was named CFO and SVP of the Minneapolis food unit of Diageo Plc in London. Briggs takes over for V. Ann Hailey, who resigned last year.
  • * If Howard Frank’s friends could see him now, they would notice that he was named to the newly created position of vice chairman and COO of Carnival Cruise Lines. He was replaced as CFO by VP of finance Gerald Cahill.
  • * Joseph M. “Jody” Grant is signing off as CFO of Electronic Data Systems Corp., based in Plano, Tex. Grant, who played a large role in EDS’s split from General Motors Corp. in 1996, is set to retire at the end of the month. CFO cited Grant as one of our “Champions of Change” (see “The Best Is EDS,” December 1997) for his reengineering efforts. The company has launched a search to find a successor. A Cut Above
    Dig this: Nathan J. Jones was named SVP and CFO of Deere & Co. The former VP and treasurer of the Moline, Ill., maker of tractors and heavy equipment succeeds Robert W. Lane, who was promoted to managing director of Deere’s European operations.
  • * CFOs of managed-care companies continue to fall (see, “Grapevine,” February). The latest casualty is Wayne Lowell, who announced he will resign as CFO of PacifiCare Health Systems Inc., of Cyrpress, Calif., after a replacement is found. The company recently announced a larger-than-expected fourth-quarter charge. Lowell said he wanted to spend more time with his family. Open Parachute.
    In one of the stranger cases involving the departure of a CFO, Standard Management Corp., an Indianapolis insurer and financial services firm, is accusing its former finance chief of what amounts to malpractice.

It all started when former CFO John J. Quinn left Standard Management last year to take an appointment as commissioner of the Indiana Department of Insurance. After leaving, Quinn contended that his contract entitled him to more than $1.6 million in stock options and severance pay, based on a termination of his employment for any reason. When Standard refused to pay, Quinn filed a lawsuit seeking an additional $3.3 million in damages.

Standard argues that the agreement was part of a golden parachute, and that payments would kick in only in the event of a takeover, not voluntary resignation. “His interpretation is without merit; it’s ludicrous,” argues Quinn’s successor as CFO, Paul B. “Pete” Pheffer.

In the event that Quinn’s interpretation is correct, Standard further argues that Quinn should have warned the company of the negative impact such lucrative provisions would have on the company’s balance sheet, according to a report in the Indianapolis Business Journal. At press time, the dispute was expected to be decided in late February by a Marion County Superior Court.

However, Quinn is feeling his own negative impact. He was forced to decline his commissioner appointment because of the lawsuit with Standard, one of the companies he would have had to regulate.