Sacked PeopleSoft CEO "less than honest"
Sacked PeopleSoft CEO "less than honest"
Oct 05, 2004: Former PeopleSoft CEO Craig Conway's abrupt sacking last Friday was largely down to the fact that he misled Wall Street analysts about the level of disruption Oracle's bid for the company was having on its business, a PeopleSoft board member has told a U.S. court.
Steven Goldby, who is chairman of PeopleSoft's governance committee as well as chairman and CEO of Symyx Technologies, told a Delaware Court in the first day of trial that started yesterday - in which Oracle hopes to have PeopleSoft's shareholder rights plan removed - that two weeks ago the board reviewed the deposition Conway gave to Wall Street analysts in September last year, in which he said Oracle's bid was no longer a disruptive influence. Conway has since admitted that his remarks "weren't true", as the Oracle bid was indeed damaging PeopleSoft's business, with many customers reluctant to invest in PeopeSoft products or upgrade existing applications amid fears that an Oracle buyout could see the support for such implementations discontinued.
Goldby also revelaled that Conway's direct reports were "really terribly, terribly unhappy working for him and were likely to quit." A number of PeopleSoft executives quit towards the tail end of 2003, which also affected the forward product strategy of the company, which Goldby described as "not as good as it could be."
The testimony by Goldby has served to uncover some of the machinations of the PeopleSoft board and provide observers with a better broader picture of why the board decided to terminate Conway's contract with immediate effect, following the board's initial statement which merely said its decision "resulted from a loss of confidence in Mr. Conway's ability to continue to lead the company."
The board has been at pains to deny that the removal of Conway was in any way linked to his opposition of Oracle's takeover bid, following the overturning of the U.S. Department of Justice's blocking of the buyout, saying that "all decisions with respect to Oracle's tender offer have been made on the unanimous recommendation of the Transaction Committee of the board."
Dave Duffield, who founded the company in 1987, and was replaced as CEO by Conway in 1999, is to return to the helm, with Kevin Parker and Phil Wilmington named as co-presidents.
Meanwhile, despite making misleading remarks about the company and losing the confidence of the company's board to continue to lead PeopleSoft, Conway could still walk away with a $20 million dollar severance bonanza in stock options and stock awards.
Conway, who was earning $1 million a year at the time of his removal, is also entitled to two years' base salary plus bonus upon termination of his contract for any other reason than "cause."
Goldby referred to this in his testimony, saying that the board has explored the possibility of firing him "for cause" but opted not to do so upon taking legal advice which said that the statements made by Conway last year did not amount to a "material act of dishonesty."
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