PeopleSoft president and CEO Craig Conway has been ousted by the board of directors who cited loss of confidence in his ability to lead the company and replaced him with founder and former CEO Dave Duffield. The company declined to comment on what caused the loss of confidence although it said there was no question of regulatory issues or any form of misconduct.
Co-president and CFO Kevin Parker paid tribute to Mr Conway saying he had made a strong contribution to the company and was well known for bringing a thirst for operational execution. There was a suggestion that while Mr Conway had the thirst, others did the execution and that the company had lost technical and strategic direction. Returning CEO Dave Duffield said: I am in it for the long term. I’m a good complement to operationally excellent people. We have good technology people but we need a little more vision and strategy.
The decision to depose Mr Conway raised immediate questions about whether it was linked to the hostile Oracle bid. Although declining to comment directly on the issue, George Battle, speaking on behalf of the board of directors, said that all decisions with respect to Oracle’s tender offer had been made on the unanimous recommendation of the Transaction Committee of the Board and at no time had the views of the committee and Mr Conway’s been at odds with each other.
The Oracle battle has a strong personal element in it, with Mr Conway and Oracle’s Larry Ellison regularly trading hard-hitting criticisms over the past 15 months. It may be that the board felt the personal animosity was clouding the business issues and impacting shareholder value. I believe today’s announcement is in the best interests of the shareholders, said Mr Duffield.
No doubt Oracle will be cheered by the move because even though it may not have any immediate impact on its bid status, it will be perceived as the removal of a further barrier, following close on the news of Oracle’s triumph in federal court against the Department of Justice’s attempt to block the bid.
Mr Conway’s termination came within hours of the closure of the latest financial quarter, for the period ending September 30, 2004 – a quarter PeopleSoft professes itself to be reasonably happy with. License revenues for the third quarter are expected to exceed $150 million. We have had great success with both new and existing customers. Our performance demonstrates PeopleSoft’s continuing competitive strength and ability to perform, said Mr Parker. Commenting on the timing he said: There was a plain and simple reason, over time the board became concerned about Craig’s leadership. There was no smoking gun and no irregularities. It was a matter of the board losing confidence in Craig and when that happens you have to make a decision.
Mr Conway joined the company in 1999, replacing Mr Duffield as CEO and was credited with getting PeopleSoft back on track in 1999, turning the nice company which had lost its way into a nice, well performing and innovative company. He was the driving force behind the company’s early decision to rearchitect for the Internet. For the last 15 months he has been vociferous in leading the fight against Oracle’s hostile takeover.
The new management line up sees Dave Duffield as CEO, with Kevin Parker and Phil Wilmington as co-presidents, and Aneel Bhusri as vice chairman of the Board. All of the changes are effective immediately. Mr Parker will be responsible for internal operations and remain CFO and Mr Wilmington will take responsibility for worldwide field operations. Vice chairman Aneel Bhusri will focus on product and technology strategy.