Dell Picks Former Airline Chief As CFO

UPDATED: Dell Computer on Tuesday announced Donald J. Carty would take over as CFO and vice chairman of the computer firm, which is in the midst of a formal investigation by the Securities and Exchange Commission (SEC) for accounting irregularities.

Carty, the former CEO of American Airlines parent company AMR Airline Group, next month will succeed Dell CFO James M. Schneider, who will be leaving in January to become executive chairman of the board for Frontier Bancshares Inc.

Carty may seem an odd choice, given his background in the airline industry. However, a Dell  spokesperson pointed out that Carty served as CFO of AMR before becoming CEO and has been on the Round Rock, Texas company’s board since 1992.

“Don knows our company very well. He’s been involved very directly with Dell for 14 years. It’s somewhat unusual that someone would come into a role like this with 14 years experience,” said Bob Pearson, a spokesman for Dell told internetnews.com.

Schneider will stay through the end of the fiscal year and work with Carty on the transition. “So we’re thankful to Jim and feel like we’re fortunate to have Don to step into a role like this,” said Pearson.

Carty didn’t exactly leave AMR on the best of circumstances. He was forced out in 2003 after it was revealed that he had secretly approved generous bonuses and pension plans for AMR’s top executives, while forcing AA employees to give in to massive pay cuts.

James Schneider hasn’t been having a particularly great year, either. The company was hit with a big charge after it had to recall millions of batteries that could potentially explode.

Worse, the company is currently under investigation by the SEC over issues concerning revenue recognition and financial reporting.

Dell has missed filing its second and third quarterly reports and faces delisting as a result. Pearson said Dell had no updated information on these issues.

Carty had been serving as the chairman of the board’s audit committee, which was investigating the accounting concerns for the SEC. Thomas W. Luce, III, a member of the board of directors, will assume Carty’s duties as chairman of the board’s audit committee.