Management Reshuffles - Weekly Recap

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The week ended March 23 was noteworthy for some key appointments in certain companies that have been in the news recently, though for the wrong reasons. Eye health company Bausch & Lomb on Monday named Efrain Rivera as senior vice president and chief financial officer, thus making him the highest-ranking Hispanic executive at the company. The company is troubled by lower sales for its lens care products as well as costs incurred due to the recall of its Renu contact lens solution, and the newly appointed finance chief, who has vast experience working in various capacities in the company, is expected to reverse its fortunes.

Motorola, the world's second biggest cell phone manufacturer, on Wednesday promoted Greg Brown, the President of the company's Networks and Enterprise business, to the post of President and COO. Motorola also appointed Thomas Meredith as acting CFO. The company, struggling to get its business profitable in the midst of various other vexing issues, has surprised many with its choice of operating chief, with certain analysts questioning the competency of Brown.

Software solutions provider Openwave Systems on Friday elevated Robert Vrij to the post of President and Chief Executive Officer. He replaces David Peterschmidt, who will lead a strategic alternatives committee to explore such options for the company. The appointment of Peterschmidt, who is blamed by many shareholders for the poor financial performance of the company, has irked Harbinger Capital Partners, who owns 11% of the company's stock.

The other companies who effected management changes include R.R. Donnelley & Sons Co., ProLogis, Hub Group Inc., Kaydon Corp., Intermec, Inc., Eaton Vance Corp., North American Scientific Inc. and Pepsi Bottling Group, Inc.

Bausch & Lomb Appoints Efrain Rivera as senior VP, CFO

Eye care products maker Bausch & Lomb (BOL) on Monday said Efrain Rivera has been appointed as the Senior Vice President and Chief Financial Officer of the company, succeeding Stephen McCluski, who would retire on June 30. Rivera joined the company in 1989 and served in various capacities, ranging from management and executive positions in corporate treasury, business analysis and investor relations to general manager of Bausch & Lomb Mexico, Vice President-Finance for Global Vision Care, and President-Bausch & Lomb Canada and Latin America.

50-year-old Rivera is now the highest-ranking Hispanic executive at the company. He has been the Corporate Vice President and Treasurer since 2004, and will be responsible for strategic business development activities. Bausch & Lomb said McCluski would serve as Senior Vice President of corporate strategy until his departure. The company's stock dropped $0.72 or 1.5% to $48.79 at the close of the regular trading session in New York Stock Exchange composite trading on Monday. The stock has declined 30% in the last one year.

The eye health company has not been in the best of times recently. The company recently said it expects fourth-quarter to be unprofitable due to lower lens care sales and costs associated with the worldwide recall of one of its products, a contact lens solution, after reports of an infection among some of its users hit the headlines. The company estimates to report fourth-quarter income before income taxes and minority interest of approximately $25 million, down from $84.3 million posted a year ago. Last month, Bausch & Lomb completed a restated financial report covering as far back as 2001. The company has also delayed the filing of financial reports for 2005 and 2006, due to certain accounting problems at its foreign subsidiaries.

R.R. Donnelley Names Thomas Quinlan CEO

R.R. Donnelley & Sons Co. (RRD), the biggest printing company in North America, on Monday said Thomas Quinlan has been appointed as Chief Executive Officer and President of the company to replace retiring Chief Executive Officer Mark Angelson. Additionally, the company said John Paloian, Group President Global Print Solutions, has been named Chief Operating Officer. The appointments would take effect from spring later this year.

44-year-old Quinlan is currently the Chief Financial Officer of the company. He will also become a director on the board. R.R. Donnelley's shares closed Monday's regular trading higher by $0.31 or 0.88% at $35.66, on a volume of 973,400 shares on the New York Stock Exchange.

56-year-old Angelson became the Chief Executive of RR Donnelley in 2004. Prior to that, he was the Chief Executive Officer of Moore Wallace before the two companies merged. Quinlan was the Executive Vice President of operations at Moore Wallace.

Angelson is credited to have immensely contributed to the company at a time when Donnelley was struggling due to the rise of the Internet and Web-based databases, as well as by the simultaneous decline of the publishing sector Donnelley serves. This led to several core operations of the company coming under pressure.

However, Angelson looked for newer pastures in search of higher-margin businesses. One year after assuming office, he announced an agreement to buy Britain's Astron Group, a Business Process Outsourcing provider, for $1 billion. Last year, the company bought Asia-oriented OfficeTiger LLC for $250 million. In the past few months, the company has spent close to $2 billion on acquisitions in the printing sector. However, the company recently reported that fourth quarter earnings were affected by asset write-downs and other charges.

ProLogis Appoints William Sullivan as CFO

Real estate investment trust ProLogis (PLD) on Monday appointed William Sullivan as Chief Financial Officer, effective April 1, replacing Dessa Bokides, who has been the Finance Chief of the company for less than two years. A veteran in corporate finance and global real estate, 52-year-old Sullivan was most recently the Chairman of SiteStuff, an online procurement company serving the real estate industry. ProLogis' stock climbed $0.76 to $66.33 in New York Stock Exchange composite trading. The shares have risen 18% in the past one year.

The company did not say why Bokides was leaving. In a regulatory filing, ProLogis said she resigned on March 31, and would continue as a consultant for the company till April 30. She will be paid $2.05 million on May 1 and her share options would be fully vested. The company will pay Bokides' health benefits under COBRA through Dec. 31, 2008. Additionally, it would offer to buy Bokides' current Colorado home from her. ProLogis would also help to sell Bokides her former Connecticut home.

Hub Group CFO Thomas White Resigns; Terri Pizzuto New CFO

Asset light freight transportation management company Hub Group Inc. (HUBG) on Tuesday said Thomas White, the company's Senior Vice President, Chief Financial Officer and Treasurer, resigned, effective March 16 to pursue other opportunities. He has been Finance Chief since 2002. The company announced that 48-year-old Terri Pizzuto, who had been Vice President Of Finance since 2002, would succeed White.

The company's stock closed Tuesday's regular trade up $0.07 at $30.67. However, in the extended session, the shares lost 5 cents more and were trading at $30.62.

Pizzuto was brought to Hub Group by White from Arthur Andersen LLP, where both of them served together. The company said in a regulatory filing that Pizzuto's base salary is $300,000 with a target bonus of $181,800.

Bloomberg reported on Wednesday that White's resignation was termed `a loss' for the company by Jon Langenfeld, a Robert W. Baird & Co. analyst in Milwaukee. He says White had an instrumental role in the company in recent years, with Hub Group reorganizing internally during the tenure of White and Pizzuto as finance executives. The company's annual profit surged several times to $48.7 million last year from $1.5 million in 2002. The analyst also feels that the company, which doesn't own assets, may buy back shares or pursue acquisitions.

Motorola Promotes Greg Brown to COO

The world's second biggest cell phone maker Motorola Inc. (MOT) on Wednesday revealed the elevation of Greg Brown, President of the company's Networks and Enterprise business, to the post of President and Chief Operating officer of the company, effective immediately. Motorola also appointed Thomas Meredith as acting Finance Chief, effective April 1, replacing David Devonshire, who retires on April 1.

46-year-old Brown joined Motorola in 2003. Prior to that, he headed Micromuse, a network management software company. Brown also worked at Ameritech and AT&T. Meredith, already a Motorola board member, is a general partner of the investment management firm Meritage Capital and Chief Executive of MFI Capital.

Motorola, which is trending in the range of $17.90 - $26.30 for the past one year, closed Wednesday's regular trading session at $18.74, down $0.08 from the previous close, on a volume of 42.31 million shares. In the extended trading, the stock shed 4.8% or $0.90 to reach a new low of $17.83. Further, the shares sank to a two-year low on Thursday, prompting analysts to downgrade the stock.

However, the choice of Greg Brown as Operating Chief has come as a surprise to many. According to Bloomberg, Albert Lin, an analyst at American Technology Research in San Francisco said of Brown: There's not a single senior Motorola executive that had more predictions go wrong. He rated the company's shares Neutral.

The company also said on Wednesday that its first-quarter sales would fall more than $1 billion from what it said earlier and expects to report a loss for the quarter. Motorola was forced to cut prices to stand up against the competition unleashed by Nokia, resulting in shrinkage of the profit margin to the lowest in almost four years. The company also does not have any new product ready for immediate launch.

In addition, Motorola said on Wednesday that it would repurchase more of its lagging stock. Motorola Chief Executive Ed Zander also canceled a speech scheduled for next week at the CTIA Wireless industry trade show. On Friday, Motorola said Zander had an "unforeseen scheduling conflict" with the trade show in Orlando, Florida, but refused to elaborate.

The company's stock had hit a six-year-high in October 2006 and market share climbed to 22% from the previous high of 14% in 2003, due to the success of the Razr phone. However, in January, the company said its handset division reported a sharp dip in profit, which eventually led to the company's least profitable quarter since 2004. In order to cut costs, the company also announced elimination of 3500 positions as well as a series of measures.

Adding to its woes, Motorola is facing dissent from activist investor Carl Icahn who wants the company to use all its cash to repurchase shares. Icahn, who owned 59.4 million or 2.5% of Motorola stock earlier in the year, in a proxy filing said on late Thursday that he increased his stake to 2.7%. Icahn wants a seat on the company's board.

According to a report by AP, Davenport & Co. analyst F. Drake Johnstone wrote in a research note that it would take more than one year for Motorola to turn around its handset business. BMO analyst John Bucher wrote in a research note on Thursday that the magnitude of the miss came as a surprise. Morningstar analyst John Slack said though he does not see any quick fixes for Motorola, the firm believes that the company can emerge from its troubles as a stronger company.

Zander's cancellation of the speech at the trade show also has increased the risk of holding the company's stock, says a report in Bloomberg. According to Ping Zhao, an analyst at CreditSights Inc. in New York, It is a big deal that he canceled this. There's a huge uncertainty about what happens with this company and you are canceling a keynote speech at a major event at the last minute."

Some analysts, including Raimundo Archibold Jr. at Kaufman Bros. in New York, said Zander's pullout from the trade show might indicate that Motorola is in talks to purchase Palm Inc. (PALM) so that its Treo e-mail device would help Motorola compete with Research In Motion Ltd. (RIMM)'s BlackBerry and multimedia phones from Nokia Oyj (NOK). Motorola stock has gained 57% since Zander took over as Chief Executive in December 2003. However, it has lost 14% of its value in the past year.

Kaydon Appoints James O'Leary as CEO

Ball bearing and industrial shock absorber manufacturer Kaydon Corp. (KDN) said on Wednesday that the company has appointed James O'Leary as President and Chief Executive Officer - Elect, effective March 26. He succeeds Brian Campbell, who will retire as President and Chief Executive Officer on May 1. The company had said on February 27 that under the leadership transition plan, Campbell would not stand for re-election as a Director at the company's May 17, 2007 Annual Shareholders meeting.

O'Leary, who joined the company's board of directors in 2005, would continue to be a member, said Kayden. The company's shares closed Wednesday's regular trading session at $43.20, up 84 cents or 1.98%. The stock has gained 12.5% over the past year.

O'Leary was most recently the Executive Vice President and Chief Financial Officer of Beazer Homes USA, Inc. (BZH), the ninth largest U.S. home builder. However, the weak housing market has resulted in poor fortunes for Beazer. It recently suffered hefty losses as demand for new homes weakened. Sales at steep discounts and inventory write-downs have reflected badly on the company's results. O'Leary is the second corporate executive to leave Beazer in the last two months. Last month, Beazer fired counsel for undisclosed violations of company policies. Previous to his employment with Beazer Homes, from 2000 to 2002, O'Leary was the Chairman and Chief Executive Officer of the LCA Group, Inc.

Intermec CEO Larry Brady to Retire

Intermec, Inc. (IN), a manufacturer of hand-held scanners, on Thursday revealed the retirement of Chairman and Chief Executive Officer Larry Brady. The company said 64-year-old Brady would soon reach normal retirement age, but Brady's decision is voluntary, as the company does not have any mandatory retirement age. Since September 2000, Brady has been the Chief Executive of the company as well as its predecessor Unova Inc. He has been serving as Chairman since August 2001 and may continue to be so even after retirement.

Intermec closed Wednesday's regular trading session at $21.04, down $0.03, on a volume of 415 thousand shares. The stock has dropped 33% in last one year.

Intermec said Brady would continue in his capacity till a successor is employed and has spent some time on the job. The company's board has constituted a search committee and hired Egon Zehnder International Inc. to help identify and evaluate candidates. In November 2006, the company said that in order to save up to $25 million a year, it would cut about 9% of its workforce by the end of the first quarter of 2007.

Brady's tenure with the company has been impressive. Under his guidance, Intermec's parent company changed its name, sold off industrial-machinery businesses and adopted certain restructuring actions. He brought the company to profitability from a loss. When he joined in 2000, Intermec's parent company had lost nearly $40 million. Despite slump in sales in the latter half and new restructuring costs, Intermec posted net earnings of $32 million in 2006.

HeraldNet quotes Eli Lustgarten, a senior analyst with Longbow Research, as saying that Brady has done a tremendous job improving Intermec's long-term outlook. The analyst added that during Brady's tenure, Intermec also reasserted itself as a leader in the market for bar code scanning equipment, mobile computers and related technology.

Eaton Vance Names Robert Whelan CFO

Eaton Vance Corp. (EV), a provider of investment management and counseling services, on Thursday said that Robert Whelan would become Chief Financial Officer of the company when William Steul retires in October as per the company's mandatory retirement policy for senior officers. 45-year-old Whelan would join Eaton Vance next month as Vice President and Director of finance from Boston Private Wealth Management Group.

At Boston Private Wealth Management Group, Whelan was Executive Vice President and Chief Financial Officer. He was responsible for all financial functions of the company and its thirteen subsidiaries, and was also a member of the executive committee. He was previously employed with MFS Investment Management, BankBoston and Deloitte & Touche Consulting Group.

Eaton Vance dropped 12 cents to close at $35.43 at the end of the regular trading on Thursday. The company's stock gained 30% in past one year.

Eaton Vance is known for its tax-managed funds to wealthy clients. In the last five year, the company has more than doubled assets under management to $135.5 billion through acquisitions and new products like bank loan funds. Eaton Vance's Chief Executive Jim Hawkes is also going to retire this fall. Hawkes is expected to transfer responsibilities to Thomas Faust, the company's President.

North American Scientific Appoints John Rush as CEO

North American Scientific Inc. (NASI), a manufacturer of radiation oncology community products, said on Thursday that John Rush has been named as President And Chief Executive Officer of the company, succeeding Michael Cutrer. 48-year-old Rush's appointment is effective mid-April. He is also expected to join the company's Board of Directors. Financial details of the appointment were not revealed.

The company's shares closed Thursday's regular trading session at $0.8910, down $0.0490 or 5.21% from the previous close. In after hours, the shares gained $0.01 or 1.01%, and were at $0.90.

Rush was most recently Chief Executive Officer and President of Sanarus Medical since 2002. Prior to that, he served as Chief Executive and President of Micro Therapeutics Inc., which is now owned by ev3 Inc. At North American Scientific, Rush will oversea North American's launch of its new brachytherapy radiation breast cancer treatment.

51-year-old Cutrer, who has been holding these two titles since the company began in 1989, will become the company's Executive Vice President and Chief Technology Officer and will remain on the board.

Openwave Systems Names Robert Vrij President, CEO

Openwave Systems Inc. (OPWV), a provider of software solutions, on Friday revealed the appointment of Robert Vrij as President and Chief Executive Officer, replacing David Peterschmidt, who would resign. Openwave closed Thursday's regular trading session at $8.7, down 19 cents or 2.1%, from the previous close. The company's stock has lost 57% during the past one year.

43-year-old Vrij was most recently Openwave's Executive Vice President of Worldwide Field Operations since January 2007. Formerly, he was the President and Chief Executive Officer of Lucent's Europe, Middle East and Africa operation.

Peterschmidt, who has been continuously targeted by Harbinger Capital Partners for missing earnings forecasts, will continue to serve on Openwave's Board, the company noted. Openwave has also retained Merrill Lynch & Co. as its financial advisor to explore a range of strategic alternatives and options to enhance shareholder value, including a possible sale of the company. Peterschmidt will lead a strategic alternatives committee to explore such options and the committee will have two independent directors.

Harbinger owns 11% of Openwave stock. In December, it sued the company, charging it with trying to block the investor's nomination of two board candidates. Harbinger said that by appointing Peterschmidt as head of the strategic alternatives committee, the board has put its interests and that of the senior management above those of shareholders and the company.'' Harbinger said the committee should comprise three independent directors.

Additionally, Openwave on Friday slashed its prior financial outlook for the third and fourth fiscal quarters, citing inherent uncertainty in predicting the company's future financial performance.

Noting that the company's software is used by mobile phones from companies such as Sprint Nextel Corp. (S), Motorola Inc. (MOT) and AT&T Inc. (T)'s Cingular Wireless, Bloomberg quoted JPMorgan analyst Sterling Auty as saying to investors, That installed base with technology in the network and on the handset in our minds is worth a lot to several companies servicing the telecom industry."

Pepsi Bottling Executive Chairman John Cahill Steps Down

Pepsi Bottling Group, Inc. (PBG), the second-largest soft-drink distributor in the world, on Friday said John Cahill would step down from the post of Executive Chairman of the Board, effective March 31. He will be replaced by 65-year-old Barry Beracha, who has been the non-Executive Chairman for the past eight years. Shares of Pepsi Bottling rose 6 cents to $31.82 at the close of regular trade in New York Stock Exchange composite trading. The company's stock gained 3.4% in past one year.

The changes were originally announced in July. 49-year-old Cahill said in July that he would quit as Chief Executive Officer to pursue other responsibilities, while leaving the board sometime this year. Eric Foss, who served as the company's Chief Operating Officer since September 2005, then replaced Cahill as Chief Executive.

The company also said Colgate-Palmolive Co. Vice Chairman Javier Teruel and PepsiCo Inc. operations executive Hugh Johnston are seeking election to its board. They will replace outgoing directors Thomas Kean and Clay Small, who plan to leave the board in May.

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