Donald J Carty, who became Dell Inc's chief financial officer less than 18 months ago when the computer maker's accounting was under scrutiny, is stepping down and will be replaced by a longtime General Electric Co executive. Brian T Gladden, chief executive of SABIC Innovative Plastics, formerly called GE Plastics, will join Dell on Tuesday and succeed Carty as CFO on June 13. The transition has come at a critical juncture for Dell. Company officials believe they have accounting issues under control, but Dell still trails Hewlett-Packard Co in worldwide shipments of personal computers and is cutting jobs and spending to meet financial targets. Dell is expanding beyond phone and Internet sales to sell machines through retailers, and it is expanding its reach in emerging markets such as India and China to recapture the robust growth rates of its earlier years.
Gladden, 43, said he was "excited to be joining Dell at a time of transformation." He held a series of financial and management jobs at GE and has served as president and CEO of Sabic Innovative Plastics since it was spun off from GE last August. The company, which makes polymers used by electronics, office equipment, computer and auto manufacturers, is a unit of Saudi Basic Industries Corp, or SABIC. The plastics unit moved quickly to name Charlie Crew, general manager of its global-ventures business, to replace Gladden. Coming from another industry, Gladden is not well-known among analysts who cover Dell, but they expect he will focus on cost-cutting. Ben Reitzes, an analyst for Lehman Brothers, said he wants Gladden to explain how Dell will achieve its goal of cutting $3 billion in spending and how much of the savings will translate to profit. Hewlett-Packard CEO Mark Hurd had that kind of line-by-line handle on costs after he was hired in 2005, said Reitzes, who also wants Gladden to continue making Dell's finances easier for investors to understand. Dell will pay Gladden a $700,000 annual base salary and a minimum target bonus of the same amount next March, plus a $2 million signing bonus, 223,000 restricted shares of stock and options on 922,000 shares, according to a company filing with the Securities and Exchange Commission. Dell spokesman David Frink said Carty, 61, was not pushed out. He said Carty indicated several months ago that he wanted to retire as CFO, and the company hired the executive search firm of Heidrick & Struggles, which brought Gladden to Dell's attention. "It was time to find a CFO for the longer term," Frink said. Carty will remain on Dell's board. Carty was CEO and chairman of American Airlines and its parent, AMR Corp, until being ousted in early 2003 during a fight with labor unions over secret pension perks paid to senior executives. He has been a Dell director since 1992, and joined the company as CFO on January 1, 2007.
In a statement, Chairman and CEO Michael Dell said Carty played a key role in re-establishing the transparency and integrity of Dell's finances. Carty replaced James M. Schneider as CFO shortly after the company acknowledged that the Securities and Exchange Commission and the US attorney for the Southern District of New York launched investigations into accounting issues. It fell to Carty last year to announce that Dell would restate results from more than four years of results with lower earnings. The company spent tens of millions on an internal probe which found that employees had misled auditors and manipulated results to meet performance targets. "He did the job that he was brought in to do -- things haven't gotten worse, and maybe they've gotten a bit better -- but he was always seen as temporary," said Roger L Kay, a technology analyst and president of Endpoint Technologies Associates. There has been no indication whether the SEC has finished its investigation -- an agency spokesman declined to comment -- but Kay said he believes Carty and Dell effectively put the issue behind them when the company resumed reporting financial results. Besides Carty, Dell hired top executives from General Motors Corp, HP and other companies, and founder Michael Dell moved back into the CEO's role after the departure of Kevin Rollins in January 2007, as it launched a turnaround effort it called Dell 2.0. Shares of Round Rock, Texas-based Dell fell 11 cents, or 0.5 per cent, to end trading at $21.20 Monday.
No comments:
Post a Comment