Chief Executive at Emulex Corp. Unexpectedly Resigns His Posts
COSTA MESA — In a surprise move, Robert N. Stephens has resigned his positions as top executive and a director of Emulex Corp., the manufacturer of computer products said Monday.
Stephens has not been replaced, and a management committee will take responsibility for running the corporation as it searches for a successor, said Robert L. Corey, chief financial officer.
Stephens’ resignation as president and chief executive comes as the company is preparing to spin off one of its operating divisions and not long after it added a new member to its board of directors.
Stephens could not be reached for comment Monday.
Formerly a high-ranking executive at Western Digital Corp. in Irvine, Stephens joined Emulex in the midst of a management shake-up in October, 1990, after Emulex reported a loss for the fiscal year. He took over as top executive from Fred B. Cox, a founder of the company who remains as chairman.
Stephens has reorganized the company’s product offerings and cut hundreds of local manufacturing jobs as part of a restructuring aimed at making Emulex more competitive. The company now employs 540 people.
In the past several months, Stephens has been pushing a plan to split the company into two divisions, one comprising its Emulex Micro Devices chip manufacturing business and the other its Emulex Network Systems Division, a producer of hardware and software for computer networks.
“Stephens did a fairly credible job of getting their Micro Devices unit on track,” said Darren Bagwell, managing analyst at Spin-Off Report, a research firm in New York. “The downside to this spinoff is that they’ve been searching for an executive to head the network division, and it’s taken longer than Wall Street would like. Now they have to find another chief executive.”
The management committee that will now run Emulex is made up of Cox as chairman; Gary E. Liebl, who was elected to the Emulex board last week and is former chief executive of Cipher Data Products in San Diego; and senior vice presidents Melvin G. Gable and Corey.
The board is still contemplating the reorganization plan, which would split Emulex into two publicly held companies. That would require that a chief executive be appointed for each company, Corey said. The board is interviewing candidates, he said, and hopes to make a decision soon.
Corey said that the company remains cautious about its near-term financial performance.
For the six months that ended Dec. 27, Emulex reported a profit of $4.1 million, or 38 cents a share, compared with a loss of $5.2 million, or 49 cents a share, for the same period a year earlier. Six-month revenue was $53.2 million, up 22% from $43.4 million a year earlier.
Corey has been acting as general manager for the Network Systems Division, while Gable continues as acting general manager of Emulex Micro Devices.
Corey said that Gable, who has run the Micro Devices division for two years, is a candidate for the top post. Cox has said he is not interested in returning to day-to-day management, Corey said.
Corey said the original plan was for Stephens to head the Micro Devices unit, but now Stephens is not in the running. Corey also said that Liebl is not a candidate for either top post.
