Dell Names Replacement for CFO Don Carty
By Andrew D. Smith, The Dallas Morning News
May 20–Don Carty’s resignation fulfills a promise he made 17 months ago.
At the time, Dell Inc. was facing a crisis. Chief financial officer James M. Schneider had just left. The U.S. attorney in New York and the Securities and Exchange Commission were investigating the Round Rock-based company.
Mr. Carty, a veteran Dell director who once ran American Airlines, agreed to fix the mess while Dell found a permanent replacement.
The government won’t say whether the investigations continue, but most analysts believe Mr. Carty has lived up to his end of the bargain.
He oversaw an internal probe that uncovered managerial fraud and led Dell to restate more than four years of earnings.
Dell has likewise kept its word. The company said Monday that it has recruited GE veteran Brian Gladden to take over for Mr. Carty next month.
“It’s not right to cast this transition as part of Dell’s continuing executive turnover,” said Roger Kay, president of the consultancy Endpoint Technologies Associates. “Don always said he was a temporary employee.”
Although he has held a seat on Dell’s board of directors since 1992, the 61-year-old Mr. Carty has always been an airline man.
He spent 25 years at American’s parent company, Fort Worth’s AMR Corp., and still lives in the Dallas area.
Even with his work at Dell, Mr. Carty still serves on the board of CHC Helicopter Corp. and chairs the board of Virgin America Airlines.
“He’s not the sort of guy you picture as CFO of a computer company, but Dell was sure lucky to have someone like him who could take the job on a moment’s notice,” said Brent Bracelin, an analyst at Pacific Crest Securities.
“The company owes a lot to Don. He’s earned his time on the beach, and I think he’ll take it. I can’t see him signing up for another day job.”
As Mr. Carty prepares to move on, analysts wonder what Dell will get for the money it has agreed to pay his successor: a $2 million signing bonus, 223,000 restricted shares of stock, options on 922,000 more shares and a minimum annual salary of $1.4 million.
Mr. Gladden held a series of finance-related jobs at GE before rising to run its plastics division.
He continued in that role even after GE spun the company off last August.
“He’s never been a CFO at a major company before, and he’s never worked in the computer industry, so he’s kind of a mystery,” said Jason Nolan, an analyst at Robert W. Baird & Co.
Investors seemed similarly ambivalent about the news of Mr. Carty’s replacement.
Dell shares barely budged during trading Monday. They closed down 11 cents at $21.20.
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