CFO, President Out at Digitas
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Boston-based I-shop Digitas announced a management shakeup Monday that includes the immediate resignation of two of its top executives.
In a new structure the company said is designed to support its "continuing strong growth, global expansion and thought leadership," Digitas' chief operating officer, Michael Ward, will assume the position of president -- nudging aside the post's previous holder, vice chairman Kathy Biro.
The company positioned the change as an effort "to allow [Biro] to devote more time to industry commentary through publications and appearances, as well as academic research and teaching," according to a statement Monday.
"As the organization's needs mature and as we extend our reach to new clients and new geographies, Michael and I will be working closely together to guide its growth," Digitas chairman and chief executive officer David Kenny said in the statement. "He's an outstanding leader who is respected and well liked throughout the organization."
Biro also held a directorial seat as well; she will resign that next month. However, Biro will remain vice chairman to "focus on thought leadership for the firm and the industry," according to the company.
"Kathy's vision, commitment and entrepreneurial drive were instrumental in the creation of Digitas," Kenny said. "We will continue to depend on her insight and intellect as she concentrates even more on intellectual capital development."
Biro isn't the only one giving up duties. Digitas also said its chief financial officer, Michael Goss, would resign following the close of fourth quarter. Goss will be joining Bain Capital as managing director and CFO.
Digitas said it plans to engage an executive search firm to identify a permanent replacement for Goss. In the interim, current senior vice president for finance Jeff Cote will serve as CFO and will report to Ward. Company officials said he is being considered to fill Gross's position permanently.
Digitas execs (both remaining and departing) were quick to wave away suggestions that the shakeup was the result of anything untoward -- not an unreasonable assumption, given the recent, severe staff cuts and reorgs undertaken by many of its competitors, including marchFIRST, Viant, and Scient.
"I continue to be a firm believer in the company's business model, its employees and its managers," Gross said. "My rationale in leaving is strictly a personal one."
Kenny also added that the company is on track to meet analyst expectations for revenue and earnings. The Street expects Digitas to earn $0.06 per share for fourth quarter, and $0.27 for 2000. Last quarter, it posted a loss of $0.086 per share. A year ago, the company earned $0.03 per share in Q4 and $0.12 for 1999.
"Today's announcement is a tremendous endorsement of Michael's leadership and of our differentiated business model," Kenny said.
At press time, shares of DTAS were trading down 2.78 percent at $5.47. The company hit a 52-week low of $ 4.81 last week on news of Scient's reorg and cuts -- well off DTAS' high of $40.