Michael A. Stein cut short his stay at Marriott International Inc. The former EVP and CFO left the hotel chain unexpectedly to take the CFO post at Seattle department-store chain Nordstrom Inc. He was succeeded at Marriott by Arne Sorenson, who was previously SVP of business development.
F. Scott Reed is an accountant’s accountant. He was recently named CFO of Grant Thornton LLP, based in Chicago. It is a new position at the accounting firm. Reed will continue in the position of national director of finance.
How many calculations can Francis Barton complete in a second? Enough to land the SVP and CFO jobs at Advanced Micro Devices Inc., a semiconductor maker based in Sunnyvale, Calif. Before joining AMD, he was VP and CFO of Amdahl Corp., a unit of Fujitsu Ltd. based in Sunnyvale. Barton succeeds Marvin Burkett, who left AMD to join computer maker Packard Bell Electronics Inc. as EVP of worldwide finance and CFO.
Lawrence H. Meyer no longer wants to be a Toys “R” Us kid. The former VP of business development at the toy retailer left to become CFO of Gymboree Corp., a children’s- apparel retailer based in Burlingame, Calif. He succeeds Mary P. Shepard, who resigned.
Husby’s Next Trick?
After turning around a stagnant Ogden Corp. (see “Ogden’s Next Trick,” December 1996), Philip Husby announced his departure from the New Yorkbased services, aviation, and energy company, where he was SVP and CFO. Ogden named Raymond E. Dombrowski Jr., a former general attorney, finance, at Bell Atlantic Corp., to replace him. Husby left to “pursue other interests.”
Andrew Bonfield is just what the doctor ordered for SmithKline Beecham. He was recently named to succeed current CFO Hugh Collum, who plans to retire from the Anglo- U.S. drug maker based in Philadelphia at the end of the year.
There is a change in the nucleus of Thermo Electron Corp. to report. CFO John Hatsopoulos is retiring after 42 years at the analytical- instruments and biomedical-products company based in Waltham, Mass. The company named former VP of corporate strategy Theo Melas- Kyriazi to the post, which includes overseeing finance at 23 publicly traded Thermo units. Hatsopoulos, who is the brother of founder and CEO George Hatsopoulos, will continue as non- executive vice chairman.
Giving Up the Post
Michael J. Riley retired as CFO of the U.S. Postal Service at the end of last month to rejoin the corporate world. His accomplishments include aiding a large-scale financial turnaround at the Postal Service. In 1996, Riley and his team won the Alexander Hamilton Award for treasury excellence given by CFO’s sister publication, Treasury & Risk Management. He was succeeded by M. Richard Porras, who was formerly controller at the Postal Service.
Surely Cendant Corp. CEO Henry Silverman couldn’t have looked the other way at CUC International’s accounting problems to gain leverage with Walter Forbes, CUC’s chairman. After all, hasn’t Silverman himself suffered from the disclosures (see “Hear No Fraud, See No Fraud, Speak No Fraud,” October)? Now comes news that Cendant is easing his pain.
Although the scandal has sent the price of Cendant’s stock from just over $41 a share to less than $12, the meltdown has cost the former investment banker less than meets the eye. For one thing, Silverman exercised 1.7 million options at around $1.18 to $1.29 and sold them for about $36 last February, netting approximately $59 million before the problems emerged. And now he has convinced the board to revise what’s left of his huge options package, which was once estimated to be worth roughly $835 million. By mid-September, more than half of his remaining options had fallen below their exercise price, slicing their value to around $250 million.
Under the repricing plan, Silverman’s options are now worth another $70 million or so, according to Alan Johnson, managing director of Johnson Associates, a New York compensation consulting firm.
Some compensation experts suggest the repricing shouldn’t upset shareholders. But critics say that Silverman deserves no break at all given that he was ultimately responsible for overseeing due diligence on the merger. “I don’t think they should be rewarding senior management,” says Karin Estes, director of U.S. research for Institutional Shareholders Services, of Rockville, Md.
To be sure, Silverman has agreed to exercise enough options to buy about 1.5 million shares by early next year, which, say consultants, should please shareholders. Perhaps, but if Silverman’s new option package is so shareholder-friendly, why wasn’t it put to a shareholder vote?
Now Silverman will get to buy stock at a terrifically low price after selling at a much higher one, which is not something that many outsiders have had a chance to do. And, of course, Silverman will occupy the CEO spot.
Reflections of a CFO
Like many CFOs, Sar Ramadan, of Onyx Software Corp., in Bellevue, Wash., keeps busy on the numerous flights he takes across the country and around the world. But in addition to crunching numbers or planning strategy, Ramadan spends his time collecting his various thoughts and observations in a notebook. The musings are now published in a book called Impressions (RaMar Publishing, Lake Oswego, Oreg.). And though they have nothing to do with finance, Ramadan says they serve as a reminder that CFOs need to tap into their passionate side.
“There is a misconception that financial people are, by definition, analytical and dispassionate, and that they use only the left side of their brain,” says Ramadan. “It is just as important that they are imaginative and creative.”
Ramadan, who was born in Egypt, writes on a number of topics, including war, death, religion, cultural myopia, and life’s absurdities, in short, first-person vignettes. “CFOs, especially those that spend a lot of time traveling, will identify with a lot of these thoughts,” says Ramadan. “It is easy to get caught up in work and forget that there is more to life.” Ramadan is quick to point out that he is not a poet or philosopher, but a CFO. And an artist.