Business applications company Siebel Systems has appointed George Shaheen as its new chief executive officer (CEO), effective immediately, the company announced Wednesday.
Shaheen is replacing Michael Lawrie, who became CEO just last May. Siebel's board of directors and Lawrie agreed mutually that he would resign the position, the company said.
Lawrie's dismissal comes just hours before a scheduled meeting of disgruntled institutional shareholders. Providence Capital arranged the New York meeting, at which it planned to discuss with other major investors Siebel's strategy and board of directors composition.
Shaheen, 60, has been a member of Siebel's board since 1995. Until resigning in 2001, he was CEO and board chairman of the now defunct Webvan Group, a company he joined in 1999 after leaving his job as managing partner and CEO of Andersen Consulting, which later became Accenture.
Siebel highlighted Shaheen's experience at Andersen Consulting as particularly relevant to his new position at Siebel, saying that he has a track record of building strong customer value and developing a global brand, all while consistently meeting or exceeding financial expectations.
Siebel has been weathering rough financial waters recently. Earlier this month the company announced that it expects revenue and earnings for the first three months of 2005 to come in below expectations, as a result of deals slipping through in the quarter's final days.
Siebel forecast total revenue for the quarter, which ended March 31, to come in between US$297 million and $300 million. The consensus forecast of analysts polled by Thomson First Call was for revenue of $337.5 million. In last year's first quarter, Siebel had revenue of $329.3 million.
Analysts reacted to news of Lawrie's departure with surprise at the timing, but not at Siebel's decision to take drastic action. "Something had to happen," said Enterprise Applications Consulting Inc. principal Josh Greenbaum.
Since Siebel announced its earnings miss, Wall Street's concern about the company had flared into full-fledged discontent. Still, few expected Siebel to dismiss Lawrie after less than a year on the job.
"Right now it's pure speculation as to what is going on," said Jason Kraft, of Susquehanna Financial Group in New York. "At face value, we wouldn't necessarily view it as a positive."
When Siebel ushered Lawrie in as CEO last year, company founder Tom Siebel endorsed Lawrie as his top choice as a successor, and praised him as an executive with a deep understanding of Siebel and a solid strategic plan for the company. Now, a year later, little has changed at Siebel, Kraft said,
"Siebel is at a point where they have to either re-do their strategy or really execute it," Kraft said. "It's one extreme or the other: status quo or big change."
Prudential Equity Group analyst Brent Thill echoed the "big change" sentiment. "We believe there could be the potential for aggressive restructuring or other strategic alternatives, including the potential sale of the company," Thill wrote Wednesday morning in a research note.
Shaheen is quoted in Siebel's written statement as saying he plans to develop Siebel's strategy on promoting its CRM (customer relationship management) customer-facing applications while also extending the reach of its products into the front office market which he sees as a largely untapped opportunity