NEW YORK - PeopleSoft Inc. Chief Executive Officer (CEO) and President Craig Conway was shown the door on Friday by the company's board of directors, who immediately replaced him with Dave Duffield, PeopleSoft's founder and chairman.
Conway's dismissal was due to a "loss of confidence" in the CEO's ability to lead PeopleSoft, the Pleasanton, California, company said in a statement. The board of directors also promoted Chief Financial Officer Kevin Parker and Executive Vice President Phil Wilmington to co-presidents and Aneel Bhusri, a former PeopleSoft executive now working as a venture capitalist, to vice chairman of the board.
"It's great to be back," Duffield said on a conference call following the announcement. He served as PeopleSoft's CEO from its incorporation in 1987 through 1999, when he turned the reins over to Conway. Duffield said his re-appointment to the CEO spot is permanent.
PeopleSoft also said Friday that its license revenue in the quarter ended Thursday topped US$150 million -- a pleasant surprise to many financial analysts, who feared worse after PeopleSoft said last week that its license revenue for the quarter topped Oracle Corp.'s. Oracle reported $69 million in application revenue in its most recent quarter; while PeopleSoft wouldn't comment further on its revenue, analysts generally took its statement to mean it had only edged past Oracle's disappointing results.
The CEO dismissal at the end of a respectable quarter puzzled some analysts. "I think it was a huge surprise," said American Technology Research Inc. analyst Donovan Gow. "$150 million in license revenue is strong -- I think pretty much everyone, myself included, thought that the quarter would be a complete disaster. On the one hand, they're saying we've lost faith in the CEO; on the other hand, they're saying they're gaining traction with new and existing customers. Obviously, they're not giving him credit for that."
Speaking on behalf of PeopleSoft's board, director George "Skip" Battle declined to go into specifics about the reasons for the lost faith in Conway. The decision was made and approved Thursday night by the board's five independent directors, with Duffield and Bhusri abstaining from the vote, he said. PeopleSoft's eight-person board had consisted of Duffield, Conway and six outside directors including Bhusri.
"The very simple and plain truth is that over time the board has become increasingly concerned with Craig's leadership and essentially had lost confidence," Battle said on the conference call. "There's no smoking gun, there's no accounting irregularity. He was not terminated under the for-cause provision in his contract."
Battle denied that PeopleSoft's ongoing battle with Oracle, which is continuing a hostile takeover campaign it launched in June 2003, had anything to do with Conway's firing. PeopleSoft's board has consistently rejected Oracle's offer, now valued at $7.7 billion. Conway, a former Oracle executive, strongly opposed the deal and was seen as having a personal stake in ensuring it did not occur. But Battle said PeopleSoft's transaction committee, comprised entirely of independent directors, unanimously agreed to reject each of Oracle's bids and was never at odds with Conway about the Oracle deal.
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