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VeriSign Announces Sudden Departure of Chief Executive

6:30 am on May 30, 2007 | Category: Business, Corporate, Internet, Web Services

Internet infrastructure and security giant, VeriSign, announced yesterday that Chief Executive, Stratton Sclavos, is stepping down from his position, and will be replaced by board members William Roper as CEO and Edward Mueller as Chairman.

VeriSign also stated that an independent group of board members had completed its review of the company’s historical stock option grant practices, and found no intentional wrongdoing by any current member of senior management, including Sclavos.

Investor reaction to the news has been mixed, according to analysts, who see Sclavos suden departure as signifying a shift in business strategy.

“Many investors liked the CEO, but there were also a lot of investors that didn’t,” commented Strifel Nicolaus & Co analyst, Todd Weller. “Sometimes you get credibility issues with the management team when you have ups and downs with your business. And with VeriSign over the years, there have been a lot of ups and downs.”

Morningstar Inc. equity analyst, Mike Ford-Taggart, believes that Sclavos may have been forced out due to what he perceived as an overly aggressive acquisition strategy, in which numerous barely profitable companies were purchased, and investors all-too-often lost out.

“It’s always very odd when someone like this leaves that abruptly,” Ford-Taggart said. “But at the end of the day I don’t think it matters. The most important thing about this company is its strategy. And I don’t like their acquisition strategy.”

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