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.”
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.
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.