March 9, 1999
PeopleSoft Seeks New President
To Replace Company Founder
By JOANN S. LUBLIN and QUENTIN HARDY
Staff Reporters of THE WALL STREET JOURNAL
PeopleSoft Inc., a big software company in the midst of hard
times, is looking for an executive to replace company founder
David Duffield as president.
Mr. Duffield, 58 years old, plans to continue as chairman and chief
executive officer of PeopleSoft, which designs and makes software
for managing complex corporate functions, such as personnel,
finance and manufacturing. PeopleSoft, which was founded in
1987 and is based in Pleasanton, Calif., has more than 6,600
employees and revenue of $1.3 billion last year.
PeopleSoft's stock has been a strong performer through much of
the decade, increasing 37-fold between 1992, when it went public,
and mid-1998. But more recently orders have fallen sharply as
PeopleSoft struggled to absorb several acquisitions, and it has
fallen by two-thirds from its high of $57.44. The stock closed
Monday in Nasdaq Stock Market trading at $18.625, up 12.5
cents.
Mr. Duffield declined to comment on the search. A PeopleSoft
spokesman said "Dave's been talking about this for months now,"
adding that Mr. Duffield "is very very committed long term to
being the chairman of PeopleSoft." The president's job, he said,
will concern itself with daily operating responsibility of the
company, while Mr. Duffield sets PeopleSoft's strategic direction.
A person familiar with the search said Mr. Duffield decided to
launch the search because he feels he is "not the right guy to take
the company to the next level." The company's board, he said, "are
in agreement" on the need for a new leader who could revive sales
once the software market picks up.
In searching for a president, PeopleSoft may need to give the
newcomer the CEO title right away in order to land a top-notch
candidate, the knowledgeable individual said. "You need
somebody who can reposition a market-leading company in a
sector that's in really bad shape right now," suggested Stuart
Burch, head of the global-software practice for recruiters Russell
Reynolds Associates in Washington. Mr. Burch isn't involved in
the PeopleSoft search.
Mr. Duffield has also increased his outside interests lately,
including adopting several children, and making, through his
family foundation, a $200 million donation to combat animal
euthanasia. His personal net worth, largely from PeopleSoft stock,
is estimated to be well over $1.5 billion even after the drop in
PeopleSoft's share price.
The new president will be the third major management shift at
PeopleSoft in recent months. Previously, Ronald Codd left his
position as chief financial officer to head up Momentum Business
Applications Inc., a software application development company
started by PeopleSoft.
Last week, Albert Duffield, the chairman's brother, announced
plans to retire as PeopleSoft's senior vice president of sales and
marketing.
Besides the changes at the top, PeopleSoft has also been
retrenching. In late January, when the company announced net
income of $26.1 million, a figure below analysts' expectations,
PeopleSoft also outlined a staff cut of 6%, or about 400 people.
"Dave is one of the nicest guys in the industry, but unfortunately
the planets have lined up against PeopleSoft," said James A.
Moore, senior analyst at BT Alex. Brown. "There is a certain level
of saturation at the top of the market." In addition, he noted,
PeopleSoft's competitors, which include Oracle Corp. and SAP
AG, have been targeting some of PeopleSoft's specialty markets. In
the future, he said, "the key thing for PeopleSoft is what happens
to the corporate culture."
|
