“Hello, this is Ken.”
Ken Lonchar, that is, CFO of Mountain View, California-based Veritas Software Corp. Unlike many senior executives at much smaller companies, Lonchar actually answers his direct line. “I prefer to pick up my own phone,” he says. “I don’t like to route people through voice-mail hell.”
Of course, Lonchar isn’t this year’s winner of the CFO Excellence Award for Managing External Stakeholders because he’s so accessible. But that trait says a lot about why this CFO is held in high regard for his overall responsiveness to investor and analyst queries, and is hailed for explaining the ins and outs of a large, highly technical software business with precision and passion. He has gained tremendous credibility with an expanding shareholder base that has held strong even as the technology sector has taken a beating.
“Ken’s ability to provide comfort in such uncertain times is unparalleled,” says Anne Meisner, a software analyst at Zurich Scudder Investments.
In the past year, every public-company CFO in America has had to grapple with the demands of Regulation FD (Fair Disclosure) for greater openness, as has Lonchar. What sets him apart is the aplomb with which he’s handled recent challenges related to a dramatic expansion of the company’s ownership profile, several complex transactions, and the financial reporting problems that have snared some of Veritas’s peers.
And then there was the task of pressing the remote-control clicker to advance a slide presentation while dressed as a gorilla.
The theme of the annual leadership conference for the firm’s top 250 executives, held in July, was that Veritas is the 800-pound gorilla among suppliers of data-access and networking software. Did anyone want to wear the gorilla suit rented for the occasion? The 43-year-old Lonchar, a sports-car buff who owns a 1958 Porsche Speedster to commemorate his birth year, graciously volunteered. And while CEO Gary Bloom quips that the CFO had “trouble with the paws,” he adds that Lonchar “did a great job of laying out all the metrics of our financial strength — a message the top 250 could take back to other employees to help morale, and share with skittish customers so they understand why we’re a company to partner with.”
Talk about a passion for communicating.
Lonchar’s tenure at Veritas began in 1997 when the company acquired OpenVision Technologies, a $30 million firm he had taken public as its CFO. During the past four years, he has overseen finances for the company as its total revenues grew fivefold, to $1.2 billion for fiscal 2000, and shares soared from around $5 to an all-time high of $167 early last year.
Lonchar says that throughout the growth spurt, the key to managing external stakeholders has been to remember that listening is as important as talking. “You have to understand what people are looking for and where their questions are coming from to deliver information that is useful,” he says.
Indeed, listening provides critical insights into the product and market issues that often give rise to investor worries. Last December, for example, the company’s stock dropped 7.5 percent the day Sun Microsystems, a major Veritas partner, said it was buying a software vendor whose products seemed similar to those of Veritas. According to Meisner, Lonchar defused the situation by explaining how the products differ and why the Sun acquisition was not a threat. Shares climbed 22 percent the next day.