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Cisco Kid Riding Off into Sunset

Cisco's Carter instituted one-day close at networking specialist; third-highest paid finance chief in U.S. last year. Also: L-3 unit names CFO, and...
Lisa YoonAugust 7, 2002

Cisco Systems Inc. CFO Larry Carter is rerouting—permanently… During Tuesday’s earnings announcement, Cisco confirmed rumors of finance chief’s departure, saying Carter plans to retire next May on 60th birthday…

“My goal is I would like to keep him well beyond that time period,” CEO John Chambers told reporters on his reluctance to see Carter go… No surprise there: barring any WorldCom-like bombshells until then, Carter should leave with fairly distinguished reputation as finance chief of networking company whose meteoric rise has garnered status as an indicator of stock market health… Carter was also pioneer of “virtual close.” Fresh from his 19 years at Motorola, which closed its books in 1 day, Carter joined Cisco in 1995 to find 14-day close… New finance chief implemented the speedy close at Cisco and later turned to the Web to make process virtual—and cheaper… Also brought discipline of Six Sigma quality control to Cisco’s manufacturing operations and all functional groups…

Carter has been handsomely paid for his services during his tenure… For past two years he’s been among top earners… According to CFO.com’s 2002 Compensation Survey, Carter was third—highest paid CFO in 2001, taking home just about $30 million…

Carter will be replaced by VP of corporate finance Dennis Powell, Chambers said…

Cisco also turned in report of “solid” quarter, with higher earnings for quarter, largely due to cost cuts… Reported net income of $772 million for quarter ended July 27, compared with net income of $7 million year ago… Things have obviously improved since last year, when Cisco suffered as dot-coms collapsed and recession took shape… Facing dip in demand for its routers and other networking equipment, company slashed 8,500 jobs and wrote off $2.25 billion of inventory… Nevertheless, Chambers said customers remain cautious about spending, and called telecom market “fragile.”

>> Interdivisional man of mystery? L-3 Communications, a maker of espionage equipment for U.S. Defense Department and government intelligence agencies, appointed Peter Price CFO and SVP of finance of its integrated systems division, which designs electronic systems for surveillance products… Price moves over from company’s link simulation and training division, where he held same posts…

In new job, Price will oversee all financial operations of the Greenville, Tex.-based division of New York—based L-3… Price previously served in a similar capacity in Washington, D.C., office of Marconi North America, now BAE Systems… Also spent 14 years at Lockheed Martin and at several former Loral Corp. units…

Not surprisingly, L-3 has seen spike in business spurred on by President Bush’s post-9/11 increase in defense spending… Demand for company’s bomb-detection devices rose in lockstep with push for tighter security in nation’s airports… In July, company reported second-quarter profits were up $15 million from year ago, and sales nearly doubled, from $561.6 million to $955.2 million…

>> Mark R. Turner said “yes” to Union Acceptance Corp…. UAC, largest independent U.S. indirect car-loan maker, tapped him as CFO responsible for capital management, corporate accounting, compliance and budgeting, and treasury…

Turner brings risk-management, hedging, and strategy expertise to new job… Joins UAC from Ford Motor Credit Co., where succession of titles led to last position as VP of corporate risk management… Also served stints as director of corporate risk management and assistant treasurer at Ford Motor Credit… Before Ford, Turner was head of mortgage finance at Federal Home Loan Bank of Chicago…

>> ASE Test Ltd., world’s largest independent provider of semiconductor test services, making changes in its finance department… CFO Jeffrey Chen assumed role of special assistant to chairman of Advanced Semiconductor Engineering Inc…. In his new job, Chen will facilitate the ASE Group chairman’s key objectives with the senior management team, especially development of strategic business initiatives and implementation of corporate strategies…

To replace Chen, the company named Richard Wei finance chief… Wei was CFO and head of investor relations at ISE Labs, a U.S.-based subsidiary of ASE Test… Wei joined ASE Test in late 2000… Apparently he’s not one to watch from sidelines: before joining ASE Test, Wei covered semiconductor industry as a research analyst at Morgan Stanley and Lehman Brothers…