TAKING STOCK OF COREL'S CEO
By STUART McCARTHY -- Ottawa Sun
It's put up, or shut up time for Corel's shareholders.
ÿWith tomorrow's annual meeting, comes the yearly ritual of shareholders casting their vote for the company's board of directors.
ÿNormally a rubber stamp move, that could be different this year after Canada's largest software company, which could do no wrong in 1995 and 1996 as the David to Microsoft's Goliath, turned into the gang that couldn't shoot straight in 1997.
ÿAll eyes which were usually wide-eyed and agog over the savvy and entrepreneurial wizardry of founder, chairman, president and CEO Michael Cowpland, turned into looks that could kill.
ÿThrough 1997, revenues plunged, stuffed channels backed up and financially, the wheels fell off the streetcar, with a whopping $231.7 million US loss in 1997.
ÿNo doubt, shareholders have been thinking very hard over how to cast their vote on the motions contained in the management circular distributed to them earlier this year.
ÿThe first vote is for directors for the coming year and the first name on the list as recommended by the current board of directors is Michael C.J. Cowpland.
ÿThe voting options the proxy forms before shareholders is a) for all nominees, b) withhold all nominees or c) "withhold authority to vote for any individual nominee. Write number(s) of nominee(s) below."
ÿNo doubt, many shareholders will have an emotional reaction to mark their ballots c) for appointee 01-Michael C.J. Cowpland.
ÿWould you? Should you? The answer may not be that easy.
ÿ"Let's fire Mike, right?" says analyst Duncan Stewart with Terra Capital Corp. "Lots of shareholders have been less than impressed with the impact on their shares.
ÿ"For the CEO of a company that's declined, there's a taint, negative baggage," he says.
ÿBut what do you get by turfing Cowpland? Not the relief you might think, says Stewart.
ÿ"First of all, I've tried diligently to find out from those who use the software (CorelDRAW and WordPerfect), if it matters what kind of car he drives (usually a Porsche) what house he owns (Rockcliffe's monster digs) or what his wife wears (usually not much) -- nobody cares," he says. "People buy the product because there's no question the products are among the best of their kind in the world."
ÿOn one hand, while Cowpland's entrepreneurial style of management has been a negative in recent years, Stewart says the entrepreneurial spirit is what will push Corel to its next success, or if Cowpland is dumped, on to success at his next venture which would no doubt soar as did Mitel in the early years and Corel until recently.
ÿIf you replace him, what are you going to get? "A CEO who plays more of a bean counter role than Cowpland."
ÿWith senior sales VP Don Sylvester revamping the sales arm and new chief financial officer Michael O'Reilly guarding the books, "we now see some of the checks and balances that weren't there," Stewart says.
ÿAnd with Cowpland being a man "who is a technological visionary, you would also be losing someone who is a hell of a marketer."
ÿAs to who you'd replace him with, chances are nil you'd bring in the next big name from Silicon Valley, to a hi-tech company with virtually no cash, in turmoil and located in Ottawa, no matter how great we think the place is.
ÿ"And then there's just the turmoil -- you don't need this at a time like this," Stewart says.
ÿThe lawsuits including Hedy Lamarr's latest shot are getting hard to keep track of.
ÿThe latest quarterly results, posting a $20 million US -plus loss aren't what people wanted to see.
ÿBut Stewart points out the revenues are starting to track upward again.
ÿAs for those lawsuits, things also seem to be going Corel's way.
ÿTexas-based Micrografx had sued Corel for allegedly using copyrighted works from its software in Corel products. Micrografx had sought an interim injunction forcing Corel to stop selling the product and pull it from shelves.
ÿA court threw out that bid and Micrografx is now mulling over an appeal.
ÿSo, is it time to Corel to draw on new blood for the CEO's seat?
ÿ"I have stock and I'm not voting to fire the CEO," says Stewart.
ÿOdds are, most investors will agree with him -- for now.
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