Siebel replaces CEO
Published: 13 Apr 2005 15:55 BST
Siebel Systems, which has been under fire from shareholders, on Wednesday replaced CEO Michael Lawrie who had led the company for less than a year.
The company said George Shaheen, who has been on Siebel's board for a decade, will replace Laurie. Shaheen has served as chief executive at Webvan, the now defunct online grocer, and at Andersen Consulting, which has been renamed Accenture.
Siebel and Lawrie, who had been the company's CEO since May 2004, "agreed mutually that he would resign the position," the company said in a statement. Lawrie, who spent 26 years at IBM, replaced Tom Siebel, who founded the business software company in the 1990s.
Siebel is facing increasing heat from its investors, as the company's financial outlook has deteriorated while it sits on a sizeable stash of cash.
Earlier this month, Siebel announced that its first-quarter results would fall short of Wall Street expectations, as customers delayed purchases.
"We believed we had a sufficient number of deals in the pipeline to make our management guidance, but during the last several days of the quarter, a number of deals were delayed by customers," Lawrie said in a statement at the time of the announcement. "This was a combination of poor execution on our part, exacerbated by a challenging economic and IT environment."
Siebel held out high hopes for Lawrie to turn around the company after naming the former IBM executive to its CEO post.
Outlook still murky
Analysts noted that a new CEO may not necessarily mean a brighter future for Siebel.
"It's tough to shape any of this as a positive given Siebel's execution history, especially this quarter," said Jason Kraft, an analyst at Susquehanna Financial Group. "Mike was only on board for nearly a year, and he was their 'first choice' after a detailed search."
Siebel faces stiff competition from Salesforce.com, Oracle and business software market leader SAP. In addition, demand for business software has slackened as big companies struggle to digest purchases made years ago.
Jamie Friedman, an analyst at Fulcrum Global Partners, said that Siebel's poor financial performance indicates the company is due for a major strategic change. He said the company is also a candidate for a leveraged buyout.
Shaheen "probably has more perspective as to how to redirect the company in what appears to be a maturing stage in their lifecycle," Friedman said. "They need to run the company for its maintenance stream and cut sales and marketing."
Meanwhile, Siebel investor Providence Capital plans to call together a group of Siebel shareholders in New York after the markets close at 1300 Pacific time on Wednesday.
One of the issues Providence cited: Siebel had a $2.25bn (£1.19bn) reserve on its books at the end of last year but is not using the money to buy back its shares. When companies repurchase their shares, it improves shareholder value by increasing investors’ ownership representation in the company.
Other issues on the table for discussion will include the composition of Siebel's board of directors, its business strategy, its long-term competitive outlook, its operating margins and dilution of shares.
"Our objective is to provide a forum for Siebel's institutional shareholders to discuss a variety of topics of interest to investors that hold more than 60 percent of the equity," Herbert Denton, president of Providence Capital, said in a statement.
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