End of an Era

A legendary finance chief is retirng from GE; HealthSouth CFOs talk, Scrushy walks; CFOs on the move.
CFO StaffAugust 1, 2005

After 38 years with General Electric Co., Dennis Dammerman, vice chairman and former CFO of the Fairfield, Connecticut-based conglomerate, will retire at the end of the year.

“Now is as good a time as any,” says Dammerman, 59, who served as GE’s finance chief from 1984 to 1998. Dammerman’s retirement was announced in June by chairman and CEO Jeffrey Immelt, after Immelt unveiled his plans for a major company restructuring that would consolidate GE’s 11 businesses into six industry-focused entities.

Dammerman held a variety of positions at GE, including the chairmanship of GE Capital Services, the company’s financial-services arm. But he will be remembered best for his 14-year tenure as CFO, during which he — along with other influential CFOs such as Stephen Bollenbach, Judy Lewent, Christopher Steffen, and Jerry York — significantly raised the profile of the chief financial officer.

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As a right-hand man to former CEO Jack Welch, Dammerman helped GE become the world’s most valuable company, measured by market value. He oversaw quarter after quarter of consistent profit growth, winning the gratitude of investors (although critics accused the company of earnings management). He helped develop a world-class finance program that has produced many top managers at GE and other companies. And in 1994, Dammerman cleaned up Kidder, Peabody Group Inc., GE’s scandal-racked brokerage firm, for its eventual sale to PaineWebber.

“Dennis has been a legend in the financial world,” sums up Gayle Mattson, managing director at Korn/Ferry International, who says she often sought Dammerman’s opinion when recruiting top executives for other companies. “He is one of those people who understands how to get things done and create immense value in individuals.”

Mattson adds that she wouldn’t be surprised to see Dammerman serving on a variety of corporate boards after he leaves GE. “He helped change the face of finance in public companies,” she says, “and is still way ahead of his time.”

— Laura DeMars

CFOs Talk, CEO Walks

If there is any lesson for CFOs to learn from the stunning acquittal of former HealthSouth Corp. CEO Richard Scrushy, it may be to keep mum a little longer. With all five former HealthSouth CFOs facing jail time as Scrushy walks, the case is likely to “slow the rush to the prosecutor’s office to be the first to rat on your colleagues,” says Charna Sherman, co-chair of the White Collar Practice at Squire, Sanders & Dempsey LLP.

Indeed, the former CFOs may well wish they had not cooperated quite so readily. Four are still waiting to be sentenced, while one, Michael Martin, awaits resentencing after an appeals court deemed his first sentence of six months’ home detention too light. Their sentences are technically not affected by the outcome of Scrushy’s trial, say lawyers, but some believe judges might be swayed by it. “The message of Sarbanes-Oxley still needs to be sent,” says Sherman, “and since these are the folks who admitted to the crimes, they’re the ones who are going to have to pay.”

Scrushy has not yet entirely escaped the government’s snares. The Securities and Exchange Commission is still planning to proceed with a civil case against the former CEO that would include seeking $785 million in fines and restitution plus interest and having him barred from serving as an officer or director.

Still, Scrushy is likely to come out ahead of his former finance chiefs. For one, prosecutors have already abandoned efforts to resurrect three perjury counts that were thrown out by Judge Karon Bowdre earlier in the trial. And the judge presiding over the SEC case is “giving signals she may have serious questions about the case,” according to Bryan Cave LLP attorney Steven Smith, since she indicated she would have dismissed it if the SEC had not filed additional petitions in July. — Alix Nyberg Stuart

CFOs on the Move

German electronics giant Siemens Corp. has a new finance chief, naming company veteran Heribert Stumpf to the post effective October 1…. Troubled insurer American International Group has appointed two new finance team members, David Herzog as comptroller and Robert Gender as treasurer…. Apparel purveyor Abercrombie & Fitch Co. has picked Michael Kramer, former CFO of Apple Computer Inc.’s retail division, to be its finance head…. J. Lyle Patrick is the new CFO at telecommunications carrier US LEC…. PanGo Networks Inc., an RFID tag maker, has named Susan Ledoux to the top finance job.