News & Analysis
Michael Fister Resigns -- Interim Office of the Chief Executive Created
GABE MORETTI
10/15/2008 9:39 AM EDT
The Interim Office of the Chief Executive includes: John B. Shoven, Ph.D., Chairman of the Board of Directors of Cadence, who has been appointed to the position of Interim Executive Chairman, Lip-Bu Tan, a director of Cadence since 2004, who has been appointed Interim Vice Chairman of Cadence's Board, and Kevin S. Palatnik, Senior Vice President and Chief Financial Officer. Charlie Huang, Senior Vice President - Business Development, has been named Chief of Staff of the Interim Office of the Chief Executive. The Board has formed a search committee, co-chaired by Dr. Shoven and Mr. Tan, to identify qualified candidates to lead the company on a permanent basis.
Members of the Chief Executive Office
Dr. John B. Shoven, 61, has served as Cadence's Chairman of the Board of Directors since July 2005, and has been a member of the Board since 1992. He is currently the Charles R. Schwab Professor of Economics at Stanford University, where he has taught since 1973. Dr. Shoven has served as director of the Stanford Institute for Economics Policy Research since November 1999 and served in that capacity from 1989 to 1993. Dr. Shoven served as Chairman of the Economics Department at Stanford University from 1986 to 1989 and as Dean of the School of Humanities and Sciences from 1993 to 1998. Dr. Shoven also serves as a director of Exponent, Inc., and a member of the Mountain View Board of American Century Funds. Dr. Shoven is also a member of the American Academy of Arts and Sciences.
Lip-Bu Tan, 48, has been a member of Cadence's Board of Directors since 2004, and serves as a member of the Finance and Technology Committees of the Board. He is the founder and Chairman of Walden International, an international venture capital firm founded in 1987. Mr. Tan also serves as a director of Flextronics International Ltd., Semiconductor Manufacturing International Corporation and SINA Corporation. Mr. Tan received an M.S. in nuclear engineering from the Massachusetts Institute of Technology, an MBA from the University of San Francisco, and a B.S. from Nanyang University in Singapore.
Kevin S. Palatnik, 50, serves as Cadence Senior Vice President and Chief Financial Office. Prior to his appointment as CFO, Palatnik served as Senior Vice President and Corporate Controller. Before joining Cadence in 1994, Palatnik spent 13 years with IBM Corporation, where he held engineering and senior financial positions including Controller of one of IBM's largest manufacturing sites. Palatnik received his Bachelor of Science degree in Industrial Engineering and Operations Research as well as an M.B.A. from Syracuse University.
More resignations
The company also announced that Kevin Bushby has resigned as Executive Vice President - Worldwide Field Operations, effective immediately. Thomas Cooley, Corporate Vice President - Field Marketing, will succeed Mr. Bushby, leading Worldwide Field Operations. Mr. Cooley's proven leadership in the field, combined with his deep knowledge of Cadence's products and customers acquired over 13 years in the Cadence sales organization, makes him an ideal leader for the company's field operations.
The company also announced the resignations of James S. Miller, Jr., Executive Vice President - Products and Technologies Organization, William Porter, Executive Vice President and Chief Administrative Officer, and R.L. Smith McKeithen, Executive Vice President - Corporate Affairs, effective immediately. The company does not intend to fill the positions held by Mr. Miller, Mr. Porter or Mr. McKeithen.
Corporate outlook
"Our Board of Directors believes that the formation of the Interim Office of the Chief Executive is the best structure to lead Cadence during this time of transition," said Dr. John Shoven, Chairman of the Board. "Each of us is looking forward to working closely, together with the entire Cadence organization, to better position the company for future success. We remain focused on leveraging the company's many strengths while continuing to fulfill the needs of our customers with compelling products and solutions. We believe strongly that Cadence has a solid foundation in place that positions the company for strong performance as economic and business trends improve."
For the third quarter of 2008, the company expects results to be in line with the business outlook previously announced on July 23, 2008. Total revenue is estimated to be in the range of $235 to $245 million. Third quarter GAAP net loss per share is estimated to be in the range of $(0.27) to $(0.25). Net loss per share using the non-GAAP measure defined below is estimated to be in the range of $(0.11) to $(0.09). These results are preliminary and subject to the company's management completing its customary quarterly close.
Cadence will announce its third quarter financial results and conduct an audio webcast on October 22, 2008, at 2 p.m. (Pacific)/5 p.m. (Eastern). Participating on the Webcast will be Lip-Bu Tan, Interim Vice Chairman, and Kevin Palatnik, Senior Vice President and Chief Financial Officer.
Comments
StrategyKinetics
10/16/2008 2:07 AM EDT
* Chi-Foon Chan
* Roy Jewel -- i remember that ~6-7 years ago Magma started to gain traction in the market soon after Roy joined them as a COO after his successful stints at Avant and TMA before then.
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StrategyKinetics
10/16/2008 2:10 AM EDT
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EE Times: Latest News
Analysis: With Fister gone, Cadence layoffs may be next
Gary Smith: 'Now it's a rebuilding project'
Dylan McGrath
Page 1 of 3
EE Times
(10/15/2008 2:55 PM EDT)
SAN FRANCISO The resignation Wednesday (Oct. 15) of Cadence Design Systems Inc. President and CEO Mike Fister and four other top executives signals the beginning of a major course change at a time when Cadence faces multiple challenges and is rumored to be on the verge of announcing a huge layoff.
"Cadence is in trouble," said Gary Smith founder and chief analyst for Gary Smith EDA. "I think they have really run out of time for a 'save-Cadence-as-it-is project'. Now it's a rebuilding project."
Fister's tenure may be remembered as one of ambition and, perhaps, overreaching. His term was marked by two bold bids that ultimately failedone to sell Cadence to private equity companies in 2007 and another to buy third-ranked EDA vendor Mentor Graphics Corp. earlier this year.
In July, Cadence cut its fiscal year revenue guidance by 25 percent and said it expects to report a third quarter loss of 25 to 27 cents per share. Rumors have been circulating that Cadence may cut as much as 25 percent of its workforce.
The departure of Fister is not surprising to the rest of the EDA industry. He was rumored for months to have been interviewing for other positions, including the top job at Freescale Semiconductor, which eventually went to Richard Beyer, former CEO of Intersil Corp.
"The sense was that after the Mentor bid broke off and the company did a substantial guidance reset, his backing from the board was not entirely clear," said Rich Valera, an analyst at Needham & Co. "Nor, frankly his interest in what would obviously be a very lengthy turnaround process."
What is more surprising, according to Valera, is that the shakeup includes all of Fister's top lieutenantsexecutive vice presidents, Kevin Bushby, James Miller, William Porter and R.L. Smith.
"I've never seen anything like this," Valera said. "I've never seen a company essentially clear the decks like this, certainly not an EDA company."
Smith said the executives, with the exception of Miller, had to go. "That was sort of the group that really was responsible," Smith said.
Page 2: Layoff next week?
Page 3: 'Cadence is going to be a smaller company'
Page 1 2 3
Related Links:
# Cadence bids for Mentor Graphics
# Fister resigns, Cadence creates interim CEO position
# The Wiretap Intercept No. 081015
# Cadence's CEO Fister: driven by ambition
# Everybody loves Cadence; can EDA leader sustain the romance?
Discuss This Article
1 message(s). Last at: Oct 16, 2008 2:05:22 AM
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StrategyKinetics
Strategy and Marketing Consulting
commented on Oct 16, 2008 2:05:22 AM
As Kevin, Dr. Tan and Dr. Shoven look for the next CEO, I think there are a few lessons from the past 4 years that are very evident about running a company such as a Cadence: 1. Cadence may be very small compared to a division in a large company such as an Intel but it is a very complex diversified company -- the strategic/operational experiences of a single product division don't directly translate. The learning curve for outsiders is very long. The most analogous industry to EDA is Enterprise-SW -- Even complex diversified Enterprise-SW companies such as SAP and Oracle have very different ECO-systems and business strategies. The experience doesn't translate very easily. 2. Cadence needs a CEO who will not need another 2-4 years to figure out what's real and what's BS? Believe me, there is a lot of BS that gets airtime, especially during these periods of transition. 3. The next CEO will likely have to be a bold thinker. Cadence should dispassionately assess what does it want to be. Is it really better off continuing to be a broad-line supplier or should it become a smaller, more differentiated company and spin out other businesses in the portfolio. The broad scope is actually leading to mediocrity across the portfolio. Cadence has a large portfolio of undifferentiated me-too products that provide Cadence with mass but not strength (differentiation). If it chooses to remain a broad-line supplier, even then it must evolve it's portfolio to remain competitive. Unless the BoD can convince Carrol Bartz or a Joe Costello or even Tony Zingale to lead Cadence, they are better of finding an EDA veteran who has GM level experience of a large business in EDA. The few names that come to mind are: * Moshe Gavrielov -- Already the CEO at Zilinx. Probably not interested * Sanjiv Kaul -- He was the GM of Synopsys' Implementation business during its growth phase in the late Nineties and early part of this decade. He has also significant leadership experience in the Verification and DFM parts of EDA * Roy Jewel -- I remember that ~6-7 years ago Magma started to gain traction in the market soon after Roy joined them as a COO after his successful stints at Avant and TMA before then. I remember it as I was at a competitor who was focused on Magma. Other EDA executives who could/should be on the short list: * Wally Rhines -- Via merger with Mentor * Manoj Gandhi -- Long, steady, successful stint at the helm of the Verification business at Synopsys. The SystemVerilog and VCS-NTB turned the tables on Cadence and Verisity -- Not easily done. * Joe Swicki -- Long successful stint as the GM of Mentor's Physical Verification + DFM business. Don't know much more than that. * Penny Hersher -- Don't know much about her. * John Chilton -- Played a lot of different Estaff roles at Synopsys
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