A Civil Reaction
Maybe the chemistry just isn’t there, because W.R. Grace & Co. is on the move, but its CFO, Larry Ellberger, is staying behind. The CFO and SVP announced he will resign when the specialty-chemicals company moves its headquarters from Boca Raton, Fla., to Columbia, Md., later this year. Reports indicate that Ellberger did not want to relocate his family.
Paul McDonald scooped up the CFO job at Friendly’s Ice Cream Corp., based in Wilbraham, Mass. He was chief administrative officer before being appointed to the top finance post. McDonald succeeds George Roller, who resigned as CFO of the restaurant chain at the end of January.
A year ago, many health-care companies were firing their CFOs for poor performance (see “Critical Condition,” January). Now it appears they are promoting them. Trevor Fetter, EVP and CFO of Tenet Healthcare Corp., in Santa Barbara, Calif., was named to the newly created “office of the president” at the hospital giant. He shares the post with Thomas B. Mackey, EVP of Tenet’s western operations. Fetter will continue in his role as CFO.
Arrow Electronics Inc. is on target with its choice of Sam R. Leno as CFO. The former EVP and CFO of Corporate Express Inc. was also named SVP of the Melville, N.Y.-based electronic- components producer. He succeeds Gerald Luterman, who left to become CFO of Barnes & Noble Inc.’s Internet unit, barnesandnoble.com.
Cellstar Corp. sent Evelyn Henry Miller a strong signal. The Carrollton, Tex., retailer of wireless products promoted her from comptroller to SVP and CFO.
A Paper Gain
Westvaco Corp. welcomed Helen Murphy into the fold. She was named SVP and CFO of the New York-based paper, packaging, and specialty-chemicals company. Murphy, who was previously CFO of PolyGram Holding Inc., succeeds James E. Stoveken, who will remain at the firm as SVP to focus on accounting and corporate controls.
Ends and Beginnings
Bradley K. Johnson got the short end at Lands’ End Inc. The former SVP, CFO, and chief administrative officer resigned from the struggling catalog merchandiser “to pursue other interests.” He is the third senior officer to leave the Dodgeville, Wis.-based company in as many months. Taking his place is Stephen A. Orum, COO at Lands’ End, who also served as CFO before Johnson.
Pieter Van der Vorst proved he is compatible with Sybase Inc. The former corporate controller of the Emeryville, Calif., database software firm was promoted to VP and CFO. He replaces Jack Acosta, who stepped down from Sybase to become CFO of Portal Software, a privately held Internet billing software company based in Cupertino, Calif.
A Hot seat in Cyberspace
As the CFO of the high-flying Internet-portal company Lycos Inc., in Waltham, Mass., Edward M. Philip knows a thing or two about irrational exuberance. He witnessed the company’s stock rise from under $20 to as high as $145 in a year’s time. But nothing prepared Philip, who also serves as COO, for February 9, 1999, when Lycos announced a merger with the E-commerce assets of USA Networks. Lycos’s stock spiraled into a free fall, putting the deal in jeopardy.
The stock drop cost Lycos 26 percent of its market value. What was going through Philip’s mind? “Not anything you could print,” he jokes. “Wall Street doesn’t understand the strategic implications of this deal, so we need to get on the road and show them our vision. I think we took for granted that everyone saw our vision. We thought this thing would go through the roof,” says Philip.
By combining with properties of USA Networks, owned by media mogul Barry Diller, including Ticketmaster and the Home Shopping Network, fast-growing Lycos got the short end of the stick, some investors thought. If the deal, which Philip says took about five days to forge, goes through, Lycos shareholders will get about 30 percent of the new entity, USA/Lycos Interactive Networks. Philip, who would be CFO and a director of the combined company, says the merger cut across different investor bases, the Internet, and media, causing a conflict of expectations. But the merger, he says, will allow USA/Lycos “to absolutely dominate electronic commerce.” However, USA/Lycos will have plenty of competition from the likes of portal leader Yahoo and E-commerce front-runner Amazon.com.
Some analysts are quick to point out that the Internet is becoming less about technology and more about entertainment, a sector Philip knows well from his stint at Disney as VP and assistant treasurer. His job at Disney was “helpful in understanding a media company, which is what Lycos has evolved into.” Now, Philip just has to convince shareholders that it’s the right way to go.
An Accountant’s Accountant
Clarence A. Davis has an eye for the future. During seven years of owning his own turnaround consulting firm, he often assumed the role of CFO for several of his clients. Davis now goes from consultant and sometimes-CFO to being the finance guy at the American Institute of Certified Public Accountants. The nonprofit professional organization of CPAs, headquartered in New York, is on firm financial footing. To Davis, though, it is a logical fit. “Things are changing so rapidly in the accounting field, that every organization needs to have a vision of the future,” he says.
He moved to a nonprofit organization, in part, he says, to fulfill his sense of duty–“to be actively involved in something other than the bottom line,” he explains. “As an African-American in public accounting, I want to make sure the opportunities I had will be around for others.” He says the AICPA is the perfect place to accomplish these goals. “Here is a group of people that has a sense of the future and where the accounting profession is headed.”
As a consultant, he also performed due diligence for acquisitions and forensic accounting investigations, so he knows his way around accounting rules. That, he says, will help him take an active role in working on accounting issues. On standards-setting, Davis takes a conservative approach. “To the extent we can combine economics with logical thought, we will,” he says. “The standards shouldn’t destroy the economics.”