Here are some other opinions on our management and the Novell board....
From The Magazine: The Board Room - October 1996
The Boardroom: Novell Inc.
To say Novell's directors have their hands full is an understatement. Not only must they find a new CEO, but they also face declining earnings and shareholders fed up with Novell's lackluster stock price. New President Joe Marengi may be just what Novell needs. The board must see if the CEO it's looking for is right under its nose--before the company loses more momentum.
Snapshot
o Fiscal 1995 Revenues: $2 billion
o Fiscal 1995 Profit: $338 million
o Market Capitalization: $4 billion (approx.)
The Lineup Outsiders
With Robert Frankenberg, 48, out of the picture, the entire board is made up of outsiders. For the most part, it's still Ray Noorda's board. Frankenberg's appointments: John Young, 63, the retired CEO of HP and acting chairman of Novell; and Hans-Werner Hector, 60,co-founder of Germany's SAP AG and recently retired CEO of SAP America Inc. WordPerfect CEO Alan Ashton <eks comment:now out of the picture as of 12/5/96>, 53, who arrived with the 1994 acquisition of the word processing giant, is one of Novell's largest stockholders, with 16 million shares. Noorda's appointees are Larry Sonsini, 54, a founder of pre-eminent Silicon Valley law firm Wilson, Sonsini, Goodrich & Rosati; Jack Messman, 56, Novell's longest seated director (11 years) and CEO of oil company Union Pacific Resources Group; Elaine Bond, 60, a former senior technology officer for Chase Manhattan Bank; and Ian Wilson, 66, a managing partner of the holding company Dartford Partnership.
Strengths
Just look at the resumes of the directors. No lack of experience here.
Collectively, the directors easily have spent more than 80 years running, or helping to run, major technology enterprises. Plus, they come from a wide variety of companies and positions, giving Novell a broad industry perspective.
Weaknesses
The same word critics most often associate with Frankenberg can also be branded on Novell's directors: indecisive. Former CTO and Director Kanwal Rekhi suggests the board has been too passive. Directors reportedly had concerns about Frankenberg's performance for "many months." Yet they waited--perhaps too long--before the suggestion that he resign landed with a thud on the table. One other glaring weakness: The board lacks direct experience in the swiftly shifting networking/Internet market.
Inside Take
No one can take issue with the pedigrees of Novell's directors, but they're as guilty as Frankenberg for Novell's predicament. This is largely the same board that went along with Noorda in the disastrous purchase of WordPerfect. It obviously failed in finding the right manager to clean up the mess. Moreover, the board had no succession plan in place after Frankenberg's resignation, reinforcing Novell's image as dawdling. Analyst Craig Burton says it comes down to this: Novell has an old-era board confronted with a new-era phenomenon--the Internet. Some say Novell needs a take-no-prisoners CEO from outside--someone with a fresh perspective. Maybe it's time to overhaul the board, as well.
Director's Cut
Outside directors receive an annual retainer of $20,000, and $1,200 per board meeting--Novell held seven last year--plus another $1,000 for committee meetings. The committee chair receives an annual retainer of $2,500. Directors also receive a new annual grant of 15,000 shares.
President's Quote
On acting Chairman John Young: "I couldn't ask for a better chairman. He's offered me access to his home and his work anytime. He's been there, seen it, done it, turned it. I'm very privileged to have him as a resource."
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I like this comment: "Some say Novell needs a take-no-prisoners CEO from outside--someone with a fresh perspective. Maybe it's time to overhaul the board, as well."
Note the other comment....."One other glaring weakness: The board lacks direct experience in the swiftly shifting networking/Internet market."
Somebody with this experience (a Cisco or a 3COM) will take the Ashton spot on the board and perhaps the CEO position (IMO).
Notice that Noorda's lawyer and long time friend Mr. Sonsini of Wilson, Sonsini, Goodrich & Rosati, is one of our Directors. Are his interests with Noorda, himself, Novell or the shareholders?
EKS |
