Hat tip to Stacie Price
Source: Financial Post
NEW YORK — In what is surely a rare event for a Fortune 500 company, a woman is succeeding another women as chief executive officer.
Xerox Corp announced Thursday Ursula Burns, will replace Anne Mulcahy, as chief executive officer when Ms. Mulcahy retires from the world’s top supplier of digital printers and document management services in July.
Ms. Burns, 50, will join a list of only about 15 women CEOs of a Fortune 500 company and become one of only a handful of African American CEOs.
The two women have worked together through many years of change and upheaval, Ms. Burns joining Xerox in 1980 as an engineering intern and Ms. Mulcahy, a 33-year veteran credited with revitalizing the company after the technology bust in 2001.
Ms. Burns was named president in 2007, and had been groomed as the next CEO by Ms. Mulcahy.
“She has been at my side helping to turn Xerox around,” Ms. Mulcahy told investors on Thursday at the company’s annual shareholder meeting, which was broadcast over the Internet.
No significant strategic changes are expected as a result of the transition, which analyst Shannon Cross of Cross Research characterized as “well-telegraphed.”
“As the two executives have been working as a leadership team since April 2007, we expect this transition to be seamless,” she said. “[Ms.] Burns has already been running corporate strategy, global accounts, IT and human resources.”
Ms. Mulcahy, 56, an economic adviser to Barack Obama during the U.S. presidential transition, will retire as CEO on July 1. She will stay on as the company’s chairman.
Under Ms. Mulcahy’s leadership, the Norwalk, Connecticut, company has rebounded from fiscal troubles, returned to profitability, and improved market share. Earlier this month, it introduced a new “solid ink” system that promises to shrink the cost of color prints to near that of black-and-white.
Still, Xerox has shown signs of weakness due to the economic slowdown, as its customers delay purchasing printers and supplies. In April it cut its 2009 profit outlook nearly in half.
Over the past year the stock has underperformed the S&P 500 index, but it has significanly outpaced the index in the past three months.
At the start of Ms. Mulcahy’s tenure, the company was struggling with slack sales, debt woes and questions about how it handled its books. For a time there was speculation that Xerox, whose roots date back to the early 1900s, was heading for bankruptcy.
Since then Xerox, whose rivals include Canon Inc and Hewlett-Packard, has returned to profitability. It trimmed billions in costs by shedding thousands of jobs, moving major manufacturing overseas and cutting unprofitable assets.
Still, at the shareholder meeting, there was little fanfare for Ms. Mulcahy or the executive switch, as she and the company’s board took flak over cost-cutting moves that affect health care benefits for its retirees.
“Over the past few years … Xerox has spent US$4-billion on buying back stock. It was too bad that they didn’t have retirees in mind when thay made that decision,” said one person who identified himself as a retired Xerox employee.
Ms. Mulcahy said all of its cost-cutting moves, including a recent reduction in staff of 3,000 workers, or about 5% of its work force, were necessary for the health of the company. Xerox ended 2008 with about 57,000 employees, down from about about 92,000 in 2000.
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