If Hewlett-Packard Co.’s bid to acquire Compaq Computer Corp. overcomes shareholder disapproval and regulatory hoops, new Compaq CFO Jeff Clarke, 39, looks sure to have a job, even though HP finance chief Bob Wayman has been named CFO of the combined company.
Clarke will co-lead the merger integration team with Webb Kinney, president of HP’s business consumer division. Experts say this position is increasingly used to keep the No. 2 CFO on board until a larger role can be found. The deal is expected to close by June 2002.
“It’s kind of the consolation prize, but it’s a very important position,” says Rucker McCarty, head of The CFO Practice at Heidrick & Struggles. “This type of role usually means they’re hoping to find the right place for him after the deal is done.”
Past merger history shows otherwise. Former Monsanto CFO Gary Crittenden, for example, led the integration effort with Pharmacia Upjohn, but left for American Express Co. just six weeks after the deal closed. Former Time Inc. CFO Richard Bressler was on the AOL merger team, but left for the CFO spot at Viacom Inc. after working only briefly for AOL finance chief J. Michael Kelly. Meanwhile, Texaco Inc. CFO Patrick Lynch, 63, is co-leading the integration effort with his Chevron counterpart, but plans to retire once the deal closes and Chevron CFO John Watson takes the top spot.
Clarke may also have a chance at the top spot. “If I heard a year from now that Bob Wayman was retiring, I wouldn’t be surprised at all,” says Megan Graham-Hackett, an equity analyst at Standard & Poor’s.
ONE COLORFUL CFO
Sean Hennessy is working with a new canvas–that of paint-maker Sherwin Williams Co. Hennessy, 43, was previously VP and controller of Sherwin’s consumer group. He takes over immediately from Larry Pitorak, who has left the Cleveland- based firm.
Karen Vernamonti is trading up. She has been named head of finance at Boston-based online brokerage firm Brown & Co. The arm of J.P. Morgan Chase, which was named “Best of the Web” by Forbes magazine, grabbed Vernamonti from CSFBdirect, where she served as CFO and managing director.
Mapics Inc. has hired Michael J. Casey to serve as the new CFO at the Atlanta-based software firm. Michael J. Casey joins the company from IXL Enterprises Inc., where he was chief financial and administrative officer and EVP. VP of finance operations John Stone had been interim CFO since the July resignation of William Gilmour.
NEW CHORES FOR CHORMAN
Thomas E. Chorman, 49, has found foam away from home. Chorman was recently appointed CFO of polyurethane and foam products maker Foamex International Inc. The former CFO of Ansell Healthcare Inc. replaces current SVP, finance, and chief accounting officer Michael Carlini, who had been acting CFO since Lee Stewart’s June resignation.
John T. Mills will go the extra mile as finance chief for Marathon Oil Co., a spin-off of conglomerate USXMarathon Group, which operates out of Houston. Mills is currently SVP for finance and administration. Also, president Clarence Cazalot Jr. becomes CEO upon the spin-off’s completion. The company expects the reorganization to be wrapped up by year’s end.
DRINKING, DANCING, FINANCING
It’s purty clear that David Kloeppel is the new CFO at Grand Ole Opry owner Gaylord Entertainment. Kloeppel, who joins the Nashville-based company from Deutsche Bank, succeeds former CFO Denise Wilder Warren.
There appears to be a new cog in the corporate machine of Ottawa- based Cognos Corp. The provider of business intelligence solutions has chosen Tom Manley as CFO, replacing Donnie Moore, who retired this past April.
RED HOT KOHL’S
No more shopping around for Menomonee Falls, Wis.-based retailer Kohl’s Corp. The company has announced that former treasurer Patricia Johnson will take over the CFO role from Arlene Meier, who continues as COO.
Boise, Idaho-based Albertson’s Inc. is stocking up on talent with new EVP and CFO Felicia Thornton. Thornton, formerly a group VP at grocer Kroger Co., succeeds A. Craig Olson, who resigned from the supermarket and drugstore chain in May to pursue other opportunities.
CFO is saddened by the death of AmerUS Group Inc. CFO Michael Fraizer. Fraizer, who was 51, passed away in August. He had been finance chief for the Des Moines based company’s real estate operations since 1991.
Breakfast Behind Bars
M. Laurie Cummings, former CFO of Aurora Foods Inc., and her boss, former CEO Ian R. Wilson, both pleaded guilty last month to securities fraud and other charges for manipulating Aurora’s financial statements.
According to Mary Jo White, U.S. Attorney for the Southern District of New York, Cummings and Wilson concealed “approximately $43.7 million in trades in 1998 and 1999 in an attempt to meet earnings-per-share and net income targets of Wall Street analysts and the expectations of Aurora investors, and to obtain one or more loans from Chase Manhattan Bank and other lenders.”
Aurora, whose well-known brands include Mrs. Butter-worth’s syrups and pancake mix, Lender’s bagels, Log Cabin syrups, and Aunt Jemima products, restated its 1998 annual report and all quarterly earnings statements from 1999 after discovering the misstatements. The restatements caused the stock to fall by more than 60 percent.
White’s office credited the company’s board for reporting the fraud promptly to the Securities and Exchange Commission and the U.S. Attorney’s office. Company documents suggest that the misstatements were first brought to the board’s attention by Aurora’s auditor, PricewaterhouseCoopers LLP.
The 37-year-old Cummings and 71-year-old Wilson each face a maximum of 45 years in prison. Cummings is scheduled to be sentenced in December.
It’s been a rough summer at Reader’s Digest Association, publisher of the world’s largest-selling magazine. In March, the company paid out a multi- million-dollar settlement to address lawsuits alleging its sweepstakes direct mailer violated new
consumer-protection laws. Ad revenues plunged, and the firm issued a series of dire fourth-quarter earnings warnings leading to a dramatic 22 cents per share fourth-quarter loss. (The company also warned that it will miss first-quarter estimates.) Then Goldman Sachs & Co. lowered earnings targets, blaming the company’s “lackluster product mix.” Ouch.
Although his tenure coincided with just a portion of the company’s troubles, it was CFO George Scimone who left in August. Replacing him is Michael Geltzeiler, former CFO and SVP of market research firm ACNielsen, a unit of Dutch publishing group VNU NV. Analysts say Geltzeiler’s primary goals will be to complete implementation of an information control system designed to identify the market’s reaction to new products and sweepstakes campaigns, and to restructure the firm’s Home Entertainment and Books division, which is responsible for about 60 percent of revenue.
“It’s the chairman’s role to get the company back on track,” says Ed Hatch of SG Cowen Securities Corp., “not the CFO’s. But as they look for ways to adhere to the [new sweepstakes] guidelines and also develop more successful campaigns, speed is of the essence to get back market data as they change the look of the mailings.” That data would also be crucial to avoiding future earnings’ warnings, clearly a factor in job security at Reader’s Digest.
CFO mourns all those lost in the September 11 terrorist attacks. As we went to press, the list of casualties included MRV Communications Inc. CFO Edmund Glazer and James E. Hayden, CFO of Netegrity Inc.
David Koehler has jumped into the chief finance spot at Checkers Drive-In Restaurants Inc., headquartered in Clearwater, Fla. Koehler joins the fast-food restaurant chain from Pinnacle Towers, where he served as VP of finance. He replaces Wendy Beck, who resigned in July.
Restaurant franchiser Jack In The Box has wound down its search for a CFO. John F. Hoffner, 54, has popped into the EVP and CFO spots at the San Diego based firm, replacing the retiring Charles Duddles. Hoffner was previously EVP of administration and CFO of Cost Plus Inc.
Solectron Corp. was extremely selective in choosing its new finance chief. The electronics contract manufacturer, located in Milpitas, Calif., hired former Cummins Inc. CFO Kiran Patel to head up finance. The 53-year-old executive most recently served as CFO of iMotors Inc. He takes over from Susan Wang, who remains corporate secretary.
CFO ON ICE
Brian Coleman is chilling out in the corporate office of refrigerant-services firm Hudson Technologies Inc., based in Pearl River, N.Y. The Hudson CFO has been named president and COO. He reports to former president and current CEO Kevin Zugibe. The COO post had been vacant since 1999.
This won’t be a fun job. John Kritzmacher has been appointed SVP and corporate controller at ailing Lucent Technologies, headquartered in Murray Hill, N.J. Kritzmacher most recently served as VP in charge of financial planning at the communications services provider, and was involved in the company’s Phase II restructuring plan. He replaces Mark White, who has left the company.
TAKE THE MONEY AND RUN
David Bearman has cashed out of Dayton, Ohio-based NCR Corp. The retiring Bearman will be succeeded as SVP and CFO by Earl Shanks, 45, who had been VP of corporate finance at the automated teller machine manufacturer and computer- services provider.
LTV Corp. is bracing for a troubled year. That’s why the Cleveland- based steel company, which is operating under bankruptcy court protection from its creditors, has hired former Goodyear and Service Merchandise executive Thomas L. Garrett Jr. to be its new SVP and CFO. Garrett, 48, was approved by the U.S. Bankruptcy Court to replace George Henning, who is retiring.
Refueling America West
Douglas Parker is flying high as the newly appointed chairman and CEO of $2.3 billion America West Holdings Corp. Parker, 39, joined the Phoenix-based airline as CFO in 1995, and last year added the president and COO titles. He has also worked to upgrade the company’s flight-routing efficiency and customer service.
Although AW is stronger than it was in 1995, Parker faces big challenges as business-travel revenues plunge, fuel costs rise, and protracted pilot negotiations loom. As the youngest airline CEO ever, he credits his rapid ascent to “a willingness to take risks,” like leaving American Airlines in 1991 for a finance job at then-ailing Northwest Airlines, and joining America West a year out of bankruptcy. “You get great experiences in those situations that you couldn’t get any other way,” he says.
Parker sees a conservative year ahead, noting, “we’re not assuming any upturn in the foreseeable future.” America West has already cut management and administrative payroll by 10 percent, and has slashed growth forecasts from as much as 10 percent to as little as 1 percent for the next six quarters.
Analysts expect Parker to rise to the occasion, assisted by a management team he built during the past six years. Goldman Sachs & Co.’s Glenn Engel contends AW is “an average airline at best,” but he adds, “it’s really the operating skills that have been needed, and Parker has brought those.”