Comverse Technology Inc. (Pink Sheets: CMVT) CEO Andre Dahan will resign as CEO and director of the company as of March 4.
Comverse said that its non-executive chairman of the board Charles Burdick has been appointed CEO to replace Dahan. Dahan, who will remain with the company for a period of 90 days as a consultant, served less than four years.
Burdick will continue as chairman of the board and Augustus K. Oliver, an independent member of the Board, has been appointed as lead director.
Dahan arrived at Comverse in April 2007, after the options backdating scandal exploded, and the company's founder and CEO Kobi Alexander fled to Namibia. Dahan was forced to deal with the accounting mess that Alexander and Comverse's other executives left behind them. The mess not only included the options backdating, but also improper recording of income and expenses.
In order to publish complete and audited financial reports, Comverse paid hundreds of millions of dollars to lawyers and accountants, which emptied the company's cash account and forced it to carry out mass layoffs over the years. Altogether, Dahan fired 2,000 employees during his tenure, igniting fierce criticism of his management. Dahan made more than $20 million in salary while at the company's helm, including $12 million in stock options in 2007-09.
Comverse's liquidity problem forced the company into a sell-off of assets. In the past six months, sales have included the land slated for the company's new headquarters in Ra'anana, sold for $27 million, the sale of subsidiary Ulticom Inc. (Pink Sheets: ULCM) for $90 million, and the sale of part of the holding in Verint Systems Inc. (Nasdaq: VRNT) for $80 million, which reduced Comverse's stake to 52%.
Charles Burdick is Comverse's first American CEO. He became a director just over four years ago. In late 2006, Comverse signaled the change in direction, when it increased its directors from five to ten, and all of the new directors, including Burdick, were Americans. Burdick was appointed chairman in March 2008.
Burdick, 59, has more than 25 years executive experience, including CEO of HIT Entertainment Inc., whose children's productions include "Bob the Builder". Before that, in 1996-2004, he was CFO and CEO of Telewest Communications plc. He restructured that company, so he has an idea of what he can expect at Comverse. He also has mergers and acquisitions experience.
Burdick has a BA in Economics from the University of California Santa Barbara and MBA from the University of California Los Angeles.
Dahan was appointed CEO in April, 2007, and led six rounds of layoffs at the embattled company. About 2,000 employees were let go. Today, there are less than 4,000 employees at Comverse worldwide.
Charles Burdick said, "The Comverse board appreciates Andre's leadership under extenuating (sic) circumstances and feels it is important to transition the leadership to meet the challenges and opportunities to come. Andre's dedication and focus on both the business and the restatement challenges has been unparalleled and we thank him immensely. As CEO, my priorities will be to meet the needs of our customers and enhance shareholder value."
The shake-up in Comverse's leadership began in October with the resignation of CFO Stephen Swad, shortly after the publication of the company's financial reports for recent years. Comverse had to revise its reports in light of an options backdating scandal. The revised reports showed that Comverse lost about a billion dollars between 2006 and 2009.
Comverse shares closed at $7.34 on Friday, giving a market cap of $1.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2011
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