Symatec Corp. has suddenly fired CEO Steve Bennett and temporarily replaced him with long-time board member Michael Brown.
The move came Thursday almost two months after the company reported revenue for the quarter ending Dec. 27 had dropped five per cent year-over-year.
Bennett had held the post since July, 2012.
“We recognize Steve’s contributions to Symantec, including developing and leading a series of successful initiatives focused on organizational realignment, cost reduction and process effectiveness,” board chairman Daniel Schulman said in a statement. “These changes have helped establish a solid foundation for Symantec’s future.”
But, he added, “we remain committed to our previously announced greater-than five per cent organic revenue growth and better-than 30 per cent non-GAAP operating margin targets by FY17.
“Our priority is now to identify a leader who can leverage our company’s assets and leadership team to drive the next stage of Symantec’s product innovation and growth.
“This considered decision was the result of an ongoing deliberative process, and not precipitated by any event or impropriety.”
The news caught the industry by surprise.
One financial analyst quoted in SiliconValley.com called it a shocker. “This is a major, surprising move that they are getting rid of their CEO just as its recovery is playing out,” Daniel Ives of FBR Capital markets said. “They’re off to a very positive start. It’s a head-scratcher at this juncture. With him not there, you could see a lot of investors start to throw in the towel.”
In an interview this morning Gartner’s lead Symantec analyst Gene Ruth also said he was surprised at the news. In November the market research company published a positive rating on Symantec, saying things were improving at the company and that customers should continue to look at them for enterprise products. As recently as last month he spoke to Symantec officials and came away with “a good feeling.”
Ruth said he has talked to Bennett a number of times, and found his strategy of pushing Symantec to sell more solutions the right one. “Of course strategies are a wonderful thing,” Ruth added, but you have to implement them.”
Then after the firing announcement was made he spoke Thursday to chief operating officer Stephen Gillitt. There was no light shed on the reasons. In fact, he was struck that the strategy going forward is to stick to Bennett’s strategy, Ruth said, but do things faster.
Speed isn’t enough of a justification to abruptly dismiss a CEO, Ruth argues. It’s not like that board suddenly decided the company wasn’t moving fast enough. In fact, he adds, Bennett warned that the transition he planned could take several years. So he wonders if there were disagreements between the board and Bennett that aren’t being publicly aired.