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American Express Exec. Out Over Junk Bond Fiasco (updated)

Also, Sun CFO gets side job, Sears vet gets new finance job, more.
Ed ZwirnJuly 27, 2001

Early retirement may not be all it’s cranked up to be, at least not for Stuart Sedlacek, the 43-year-old CFO of American Express Co.‘s Minneapolis-based financial advisors arm.

Reports indicate that the move in Sedlacek’s case is less than voluntary.

The company, in a story broken by The Wall Street Journal, took a beating in the junk bond market as of late, causing second quarter profits to tumble 76 percent to $178 million.

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The company took $826 million pretax charge to write down the bonds and reduce risk in the investment portfolio. It already took another $182 million charge in April for junk bond losses.

Sedlacek told staff on Thursday he plans to retire at the end of the year.

Walter Berman, 58, a former American Express treasurer who recently returned to be a troubleshooter, will become acting CFO of the unit on Aug. 13.

The company, which said earlier this month it would cut as many as 5,000 jobs, will also create a new risk management position, apparently in reaction to the fiasco.

Michael E. Lehman, corporate executive officer and CFO of Sun Microsystems, is the latest senior financial executive to be admitted to the hallowed chambers of the board room.

The Sun executive has been elected to the board of directors of MGIC Investment Corp., a leading provider of private mortgage insurance based in Milwaukee.

Lehman, who joined Sun in 1987, has been CFO of the company for four years and was promoted to Corporate Executive Officer in 1998. He is also a member of Sun’s executive committee.

  • Sears, Roebuck and Co. has promoted Glenn R. Richter to senior vice president of finance, a newly created position. He and Richard F. Westenberger, who was promoted at the same time to vice president, investor relations, will both be reporting to Paul J. Liska, the Hoffman Estates, Ill.-based retailer’s executive vice president and CFO.

Liska, readers may recall, left his job at The St. Paul Cos., where he took in $5.5 million last year, before landing at Sears two months later.

In October, CFO Magazine gave him an Excellence Award in recognition of his cost-cutting efforts at The St. Paul Cos.

  • Interface, a provider of commercial interior products and services, has promoted Patrick Lynch to vice president and CFO, effective immediately, replacing Daniel Hendrix, who became the company’s CEO on July 1. Lynch, who joined the Atlanta-based company in 1996, had been controller since last year.
  • Thomas Knudsen, who for the past 16 months has been interim CFO at PGW (Philadelphia Gas Works), has been moved up to interim CEO there, following the resignation of Kumar Kishinchand from that post to return to the Philadelphia Water department as Commissioner.

Philadelphia city authorities are in the process of recruiting a permanent CEO. In the meantime, Craig White, senior vice president of marketing and supply services, will hold the fort as interim COO.