RealNetworks CEO Leaves in Midst of Turnaround

In what many analysts consider a surprise, Bob Kimball, RealNetworks' CEO and a real force in turning the troubled company in a new direction after little more than one year has abruptly resigned. So far, Kimball has not really commented on his move. According to the firm's press release outgoing CEO Kimball stated:

I took on this role to lead a restructuring and transformation of RealNetworks into a more lean, efficient and effective business and we have completed that phase of RealNetworks’ transformation. Over the past year we have simplified our business, removed more than $70 million in annualized operating expenses and created an entirely new, award-winning product called Unifi. We are delivering on our promise to build products people love. All this work has set the stage for Real to embark on its next phase with a clean bill of health and a strong foundation.

After 12 amazing years at Real, it is time for me to find new challenges and opportunities. I want to thank the Real team for their incredible work over the past 15 months – we’ve come a long way in a short time and I look forward to watching their success in the coming years.

In the meantime, until a permanent CEO is selected, RealNetworks appointed Executive Vice President Mike Lunsford to serve as interim CEO. The move change in leadership comes at a delicate moment in the firm's turnaround. Kimball who had been with the firm for over a decade before becoming its CEO replaced Rob Glaser, the company's founder. While in his leadership role Kimball according to a story by Brier Dudley for The Seattle Times,

The move comes as Real enters an intense several years that will test its plan to operate as a smaller company more focused on phone companies and other business customers, as well as games and consumer products.

During Kimball's tenure, the company also developed a new online media service that may compete with upcoming products from Google and Apple. But Real's stock has bobbed below $4 for most of Kimball's time as chief executive.

During 2010, sales fell 29 percent to $401.7 million and the company reported an operating loss of $34.5 million. Its gross margin improved to 64 percent, up from 60 percent the year before, when it lost $237.2 million.

All indications point to the firm finding a new CEO from outside the firm. Investors should keep a close eye on the company as it continues to find its footing.

2nd Quarter Executive Turnover Remains Slow - Inkling of Shift Arises

Executive turnover in the second of quarter of 2010 continues to decline as the financial crisis and the related recession still impact executives at companies large and small. While overall worker employment has remained a serious problem, companies have done little to change top executives during the economic crisis. This is not to say there have not been major executive changes at public companies but rather the totals have been lower than in the past. Investors need to keep on top of executive changes as a way to monitor their investments or investments they might be considering.

Second quarter 2010 CEO and CFO overall changes both dropped 16% when compared with the second quarter totals for 2009. Overall C-level changes (defined by Liberum as covering board of directors, CEOs, CFOs, COOs, CIOs, presidents, EVPs, SVPs down to VPs) for the second quarter of 2010 dropped a whopping 37% when compared with the second quarter of 2009. The drop in C-level changes for the second quarter of 2010 was much smaller when compared with the first quarter total for 2010 - the drop was only 7%. The percentage drops for CEO and CFO changes for the second quarter were also much smaller when compared to the first quarter of 2010 than the totals for the first quarter of 2009. Below are three separate graphical representations of the quarterly change totals for CEO, CFOs and C-level executives.

Credit Crisis Inks Another Notch - Ken Thompson, CEO, Wachovia

Early in May (see previous blog) Wachovia's WB (NYSE) then CEO and Chairman Ken Thompson was forced to give up his chairmanship after the bank released dismal numbers.  The second shoe has now fallen.  Wachovia's board yesterday forced Thompson to resign his CEO post as well. According to David Mildenberg and Hugh Son of Bloomberg, 

... the board blamed him for losses that cost the lender more than half its market value in the past year. The stock fell as much as 4 percent.

Chairman Lanty Smith was appointed interim CEO, the Charlotte, North Carolina-based company said today in a statement that cited " a series of previously disclosed disappointments and setbacks'' for the change. Thompson quit at the board's request, the statement said.

Triangle Business Journal wrote in a story today in which the Jounal quoted Lanty Smith, the new interim CEO,

"no single precipitating event" - such as the disclosure of even wider losses - caused Thompson's ouster.

"... A series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and its performance," Smith, 65, said in a prepared statement. "The board believes new leadership will help to revitalize and re-energize Wachovia and enable it to realize its potential. We will move Wachovia steadily ahead as a strong, independent company by continuing to focus first on the needs of our customers."

Under the gun, banks have been fervently trying to split the CEO and Chairmanship positions to try and allay growing unhappiness by shareholders and activists.  We will just have to see if this will be enough for Wachovia's naysayers.  Stay tuned.

For more:

Bloomberg (later in day)

Deal Zone

CNN Money

thestreet.com

Bloggingstocks.com

Wall Street Journal

MarketWatch

Charlotte.com

hingefire

Financial Times

SeekingAlpha

 

Meg Whitman CEO, Ebay to Retire?

According to a story by Mylene Mangalindan in today's Wall Street Journal,

EBay Inc. Chief Executive Meg Whitman is preparing to retire.

Whitman is one of the most powerful women executives worldwide. For sometime now, it has been known that Whitman has intended John Donahoe as her likely successor. Donahoe, who previously worked for Whitman, at Bain & Co., is president of eBay Marketplaces. He joined eBay in 2005. In the Wall Street Journal story, Mangalindan states:

... retirement would come at a critical point for eBay. The company's auction business... accounts for more than two-thirds of eBay's nearly $6 billion in annual revenue but has experienced slowing growth rates for the past few years. Any efforts to reverse the slowdown could involve drastic changes that may be more palatable under a new CEO. EBay has already warned Wall Street in recent months that it may alter how it structures its fees for listing and selling items by collecting bigger fees once sales close.

Should the Journal be right, Whitman is making the correct choice. Despite being extremely successful in running the company, many people agree that much of the fun of using eBay has diminished over the years. While Whitman has been key in many successful acquisitions (paypal) she was also the person in charge during the Skype acquisition fiasco and the recent smaller acquisition of Stumpleupon another questionable transaction. The company needs new blood to find ways to make the site fun again for customers and to get the business model more in tune with changes in the market.

We will just have to wait and see whether the prediction is correct that she will retiring, and if it is, whether Donahoe ends up as the new CEO.

Keep a close eye on the upcoming financial announcements. Stay tuned.

For more:

Valleywag
Los Angeles Times
Business Week
Times Online
The Guardian
Mercury News
CNN Money

Xilinx Takes Time To Select New CEO

Xilinx XLNX (NASDAQ), the programmable-chip maker, appointed a new CEO, Moshe Gavrielov, to replace long-time CEO Willem R. Roelandts (served since 1996). Back in August Roelandt's announced his decision to resign as president and CEO upon the appointment of his replacement. The company's five month job search for Roelandt's replacement appears to have come to a good end. Roelandt will remain chairman of the board and has stated he intends to remain in that position for some time.

Gavrielov appears to have been a good choice. While not a specialist in programmable-chips he has extensive executive and high-tech experience under his belt which should serve him well in his new position. According to Electronics Weekly and the company's press release announcing the appointment,

Most recently, Gavrielov served as executive vp and general manager of the verification division at Cadence Design Systems. Before that he spent seven years as CEO of Verisity, where he grew the company from a $4m start-up, taking it through its initial public offering in 2001 to a $70m publicly-traded company, and ultimately to its acquisition by electronic design automation leader Cadence in 2005.

Gavrielov had an interview with EDN.com in which he elaborated about his background and experience and what he planned to do for Xilinx.

He spent ten years designing high-performance processors and peripherals. Then there was a long stay at then-LSI Logic, where, in Gavrielov’s words, he helped drive the transition from LSI as a company that supplied empty gate arrays to a company rich in IP and integration expertise. The third phase of Gavrielov’s career took place at start-up Verisity and then at acquiring company Cadence. “We recognized then that front-end logic verification had become the top problem in chip design,” Gavrielov said. “In fact, I think it still is one of the top problems.”

So other than general management experience, what does this background have to do with running a $2B, apparently maturing, fabless FPGA giant? Gavrielov sites an interesting parallel. “I think the opportunity for growth here is that FPGAs are becoming more and more relevant to a wider range of designers. But it’s not just about gates—it’s about the IP as well. In that way, Xilinx today is in a similar transition to the one LSI had while I was there: moving from a supplier of blank gates to also being a supplier and supporter of the IP that goes into the gates. But supporting a body of IP in the field is a non-trivial undertaking.”

So Gavrielov sees a three-fold challenge for Xilinx. First, it must maintain its pace in enlarging the capabilities of the underlying silicon. Second, it must build its portfolio of IP across a growing breadth of applications. And third, the company must continue to pour investment into its development tools, so they are able both to serve the needs of an increasingly diverse—and, one suspects, increasingly specialized and FPGA-naive—community of users and to continue hiding the growing complexity of the actual FPGA circuitry from those users.

Give Gavrielov some time to get his feet wet but his appointment could be just the right move for the company. He seems to understand what the firm needs and appears to have the skills necessary to grow the business.

For more:

TheStreet.com
D and R Headline News
Mercury News
San Jose Business Journal
Business Week blog
Programmable Logic Design Line

Surviving a CEO Change - Not Always Easy

In the May 17 edition of Business Week's Management IQ blog, Jena McGregor did a piece on the Harvard Business Review's lead article in the May edition entitled, "Surviving Your New CEO". McGregor states the authors speak to the individual, telling you how to make the cut after the new guy arrives. She even provides an outline of the tips provided in the piece.

Management change continues to remain a key factor to investors and employees.

Take a look at the tips.