With performance lagging in the company's North American business, the Sage Group purged that region's C-level suite, ousting Sage Software chief executive Ron Verni, chief financial officer Jim Eckstaedt and chief technology officer Jim Foster, amid recent changes in the company’s culture and its divisional operations.
Also gone in the housecleaning is Taylor Macdonald, Sage Software's chief channel and strategy officer.
"I came to a view with Ron that as the company now has a turnover in excess of around the billion-dollar mark, that perhaps there was a need for a change in style of management in North America," said Sage Group CEO Paul Walker in a conference call.
He noted that Eckstaedt also was more accustomed "to running a finance team as opposed to running divisional CFOs with the sort of skill sets that are required to run divisions, particularly from a finance angle."
The news coincides with a preview of Sage's year-end results, where organic revenue growth for its North America unit climbed 4 percent to [US]$722 million. But North America trailed Sage's other regions in terms of growth, such as mainland Europe, which grew at a 10-percent clip and the United Kingdom, which posted a 7 percent rise. While North America does lag behind the company's overall 7 percent average growth, the U.S. performance has been strong and, according to one source, met its profit numbers.
The remaining senior management structure in North America will stay in place, but will now report directly to Walker until a new regional CEO is appointed. Andrew Griffith, group director of treasury and mergers & acquisitions, will be acting CFO for North America until a replacement is found for Eckstaedt.
Foster and Macdonald’s positions were eliminated and will be largely incorporated into the business's four operating divisions under the direction of divisional senior executive teams. In May, Sage reorganized its North American business into four operating companies.
"We haven't been happy with the North America growth rate and the view of the board was that some management changes were needed to further the potential of the business," said Cynthia Alers, a spokesperson for Sage.
Alers noted that North America is not an unprofitable business, with a product lineup that includes Peachtree, SalesLogix, MAS 90 and Timberline. Last year, Sage acquired a healthcare division and a payment solutions division.
Verni came to Sage with its acquisition of Peachtree Software in 1999, and had previously worked at ADP, NEBS Software, and an early accounting software vendor, ASTEC.
Eckstaedt joined Sage in March 1997 and previously worked at an outsourcing company, the Cerplex Group, and hard drive maker Western Digital. Foster came from Sage's 2000 acquisition of Best Software, where he was president and COO. Macdonald joined Best in 1998 from his consulting firm, Macdonald Consulting Group.
More recently, Sage has been rumored to be a takeover target by several companies, including Microsoft, Intuit, India's Infosys Technologies and Goldman Sachs.
It's unknown whether these plans played a role in the decision to cut the top executives in North America.
