Tech-Industry Veteran Belluzzo
To Take Over as Quantum CEO
By REBECCA BUCKMAN and JOANN S. LUBLIN
Staff Reporters of THE WALL STREET JOURNAL
A small but well known Silicon Valley data-storage company, Quantum Corp., has snagged a high-profile executive as its new CEO: Rick Belluzzo, former president and chief operating officer of Microsoft Corp.
Quantum, Milpitas, Calif., announced Mr. Belluzzo's hiring Thursday. While the appointment could be a public-relations boon for Quantum -- which struggled in the volatile disk-drive market before selling off that part of its business last year -- it also reflects today's tough job market, even for top-level executives used to hefty signing bonuses, giant salaries and scads of stock options.
Indeed, for Mr. Belluzzo, 48 years old, the job could be considered a bit of a come-down. He will join Quantum, a 3,000-employee company whose stock closed Thursday at $2.08 a share, from Microsoft, the world's dominant software outfit with billions in profit and a work force of 50,000. Mr. Belluzzo spent the first 23 years of his career at the similarly large Hewlett-Packard Co., where he ran its vast printer business and was general manager of its entire computer organization.
Even Silicon Graphics Inc., the struggling Mountain View, Calif., computer-workstation maker Mr. Belluzzo headed after he left H-P and before joining Microsoft, had more employees than Quantum. Mr. Belluzzo announced in April that he would leave Microsoft, where he clashed with hands-on CEO Steve Ballmer over management styles and other issues. At the time Microsoft said Mr. Belluzzo was stepping down as part of a wider reorganization engineered by Mr. Ballmer, though many Microsoft insiders say Mr. Belluzzo never quite fit into the software maker's intensely technical culture.
In an interview Thursday, Mr. Belluzzo, known more for his managerial than his technical skills, called his time at Microsoft "challenging." He said he looked forward to running a smaller business, "something I could get my hands around." Mr. Belluzzo will succeed current Quantum CEO, Michael Brown, on Sept. 3. Mr. Brown, 43, and an 18-year company veteran, will stay on as chairman.
"I have managed very large and complex situations in my career. ... Size and complexity is really an overstated virtue," Mr. Belluzzo said.
Mr. Belluzzo, drew praise at Microsoft for his ability to delegate responsibility and develop relationships with big customers. He also said he liked Quantum's corporate culture, which he described as "very much aligned with the culture" at H-P, which many describe as team-oriented. Mr. Brown and another top Quantum executive, John B. Gannon, also worked at H-P.
Quantum also attracted Mr. Belluzzo because he knew enough about its industry that he could quickly add value, according to John Thompson, a vice chairman of Heidrick & Struggles International Inc., which conducted Quantum's CEO search. Quantum, a hardware maker like H-P, was formed in 1980 and became a dominant player in the competitive disk-drive business, before its fortunes changed in an industry slump. Quantum sold that business to Maxtor Corp., also in Milpitas, last year and now sells other types of data-storage systems, including tape drives and a new generation of appliance-like devices known as NAS, for network-attached storage.
Still, Mr. Belluzzo will take a pay cut to join Quantum, which posted $1.1 billion in sales for its fiscal year ended in March. He is expected to receive a base salary of about $600,000 -- matching the annual level earned by current CEO Mr. Brown before he voluntarily cut his pay 37.5% this past April. Mr. Belluzzo also will get options to buy roughly two million shares of Quantum stock, but no signing bonus, restricted shares or guaranteed first-year bonus. Mr. Belluzzo acknowledged those numbers were "in the ballpark."
He got a $4.2 million signing bonus when he joined Microsoft in late 1999 and earned nearly $819,000 in salary and bonus for the fiscal year ended June 30, 2001, the latest year for which numbers are publicly available. During that year, he also got options to buy 1.5 million Microsoft shares, though the options are worthless at today's depressed prices.
Many Microsoft executives who have quit in recent years made so much money on their stock they don't need to work, or have pursued unorthodox careers such as professional bowling or leading adventure-travel groups. Mr. Belluzzo, by contrast, is not "a Microsoft lifer," as he puts it, and joined the company too late to cash in on the option gravy train.
Mr. Belluzzo "was contacted by a number of large corporations," Mr. Thompson said. Among the concerns that wooed Mr. Belluzzo were AOL Time Warner Inc., which pursued him for the top job of its America Online division, industry watchers say. Mr. Belluzzo declined to comment.
Mr. Belluzzo declined to talk about goals or financial targets he has for Quantum, which Mr. Brown described as going through a "transition period." But Mr. Belluzzo, who stressed he believes Quantum has solid fundamentals, said he was "optimistic that a lot of the decisions that have been made here will bear fruit."
When Mr. Belluzzo joined Silicon Graphics in 1998, he was brought in to turn around the company, but left for Microsoft after 19 months without engineering much of a recovery from problems he inherited.
At Quantum, Mr. Brown is expected to relinquish his chairman's title eventually, clearing the way for Mr. Belluzzo to take over that job as well. Mr. Brown, said Mr. Belluzzo has been his top choice for the job since Quantum started its search for a new leader about six months ago. |
