Sun's Zander to retire

Sun Microsystems Wednesday announced that Ed Zander, president and chief operating officer, will retire from full-time duties with the company, effective July 1, right after the end of the company's fiscal year.

Zander's departure adds to the growing list of executives that Sun has recently shed. The trend began last month when John Shoemaker, Sun's executive vice president of computer systems, announced that he would be leaving in July. Then last week, the company's Chief Financial Officer Michael Lehman said that he too was retiring. A day later, Larry Hambly, executive vice president of the company's Enterprise Services group, also announced his departure.

The executive reshuffling comes after the company reported fiscal third-quarter results slightly above analyst expectations, marking what some analysts believe is Sun's return to profitability.

In July, Zander will hand over full-time responsibilities to Sun's chief executive officer (CEO) and chairman, Scott McNealy. Zander will remain in a "mentoring" role throughout the calendar year, Sun said in a statement. Sun will not name a replacement for Zander. McNealy will assume the title of president, which he had held previously.

"This is all part of a planned succession strategy that Ed and I and everyone in the management team have worked on for a year now," McNealy said in a conference call with press and analysts Wednesday.

McNealy said that Zander and some of the other recently retired executives had planned on leaving Sun before the U.S. economy hit rough waters 18 months ago, but that he asked them to stay on to weather the storm. Now that Sun is returning to profitability, the company felt it was the right time to make the management changes in anticipation of beginning the fiscal year with a new team in place, McNealy said.

"I know it looks like a flurry here but we are on goal, and on plan in everything that we wanted to do in the organizational structure," McNealy said.

He added that the new management team has an average of 9.8 years of tenure with the company, and expressed confidence that it could grab the baton from the departing team.

"We are talking about people who have been here and gone through the ups and downs. It's not like we brought in a bunch of rookies," McNealy said.

During the call, Zander cast Sun's ability to undergo the executive reshuffling as a sign of strength.

"Our ability to make these changes is indicative of how deep we are. A lot of companies wouldn't be able to make these management changes," Zander said.

After more than 15 years at Sun, Zander, 55, said that he wasn't sure what he would pursue next, saying only that he needed to stop and "take a deep breath."

As for McNealy, the CEO seemed undaunted by the added responsibility.

"My message is that I'm in the saddle, I'm having a great time and I'm very glad that the hard times are behind us," he said.

Stock in the Palo Alto, California, company (SUNW) dipped 11 percent to US$7.28 in midmorning trading on the heels of the announcement.

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