Siebel Systems said Wednesday it will begin paying quarterly dividends, a move made to appease shareholders growing restless about Siebel's large stash of unspent cash.
Siebel's announcement came several hours before the San Mateo, California, enterprise applications maker's scheduled annual shareholders meeting. New Chief Executive Officer George Shaheen announced Siebel's dividend plans in a letter to shareholders, in which he also discussed the strategy he's developed since assuming the top job at Siebel two months ago.
"I am committed to improve our financial performance, which has not been acceptable," Shaheen wrote in the letter. He reiterated earlier statements about cutting costs, focusing development investments on product lines with strong growth potential like analytics and Siebel's hosted CRM (customer relationship management) service, and streamlining Siebel's sales process. Siebel is simplifying its contract process, assigning an executive sponsor to every large customer prospect and "[initiating] more rigorous account planning and account management programs to increase the size and quality of our sales pipeline," Shaheen wrote.
Shaheen also touched on his view toward acquisitions, a hot topic right now in a market where midsize companies like Siebel are under pressure to buy or be bought. Siebel will look for opportunities in four key areas, Shaheen wrote: its core CRM product line, industry verticals, hosted CRM, and analytics/business intelligence.
Siebel also plans to add two additional independent directors to its board during the next year, expanding the board size to 10, and is working with financial advisors McKinsey & Co. and Goldman, Sachs & Co. to improve its performance and "evaluate potential capital structure alternatives," according to the letter.
Siebel's first dividend, of $0.025 per share, will be paid on July 15 to those holding shares at the close of business on June 30. Siebel said it intends to pay regular quarterly dividends from now on, with the amount to be determined each quarter by the board of directors. The move will reduce Siebel's cash and short-term investment holdings, which stood at $2.2 billion as of March 31.