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CFO’s Resignation Spooks Investors

Rockwell Automation's James V. Gelly stepped down, sending the company's stock sliding.
Stephen TaubApril 5, 2007

The sudden departure of Rockwell Automation CFO James V. Gelly sent Rockwell stock sliding more than 5 percent in Thursday morning trading. He resigned as senior vice president and CFO “to pursue new challenges and opportunities,” the company said.

The Milwaukee-based maker of factory-automation systems did not provide further details. However, it did stress that Gelly will remain with the company’s finance function over the next several months in an advisory capacity “in order to ensure a seamless transition.”

Gelly did not return phone calls to his office and his home seeking comment.

In a statement, chairman and CEO Keith D. Nosbusch said: “James Gelly has made significant contributions to Rockwell Automation over the past three years, and his efforts are reflected in the accuracy and strength of our financial reporting.”

Gelly, who recently was named the top CFO in the Electrical Equipment and Multi-Industry category by Institutional Investor magazine, will be replaced on an interim basis at Rockwell by Theodore D. Crandall, senior vice president and head of the Control Products & Solutions segment.

Wall Street pros and investors, however, apparently were unhappy with the moves. In a note to clients, JP Morgan analyst Stephen Tusa downgraded Rockwell to “neutral” from “overweight,” explaining that the “lack of detail is troubling,” Reuters reported. “There is little information about the specific reasons for the change, and raises questions about the strategic direction of the company.”

Gelly joined Rockwell in the CFO position in January 2004 from his prior position as vice president and treasurer at Honeywell International.

Crandall previously served in a broad range of senior operational and finance roles across the Rockwell Automation organization, including as vice president of finance and business planning for the business unit that is now called the Architecture and Software segment. While Crandall serves as the company’s interim CFO, Kenneth Champa will be interim head of the company’s Control Products & Solutions segment. Champa is currently vice president, finance, for that segment.

The company said it is launching a search to fill the CFO position permanently, and will consider both internal and external candidates.