Commodore’s Chairman Also Gets CEO Title
In a surprising chain of events, Commodore International on Thursday appointed its chairman and largest shareholder, Irving Gould, as chief executive, replacing Thomas A. Rattigan, the cost-cutting manager credited with restoring the computer maker to profitability.
Gould’s appointment comes one day after Rattigan, 49, who served as chief executive for little more than a year, resigned and sued Commodore--maker of the Commodore 64 and Amiga microcomputers--in U.S. District Court in New York for more than $9 million for allegedly breaching his five-year employment contract. Rattigan’s suit claims that he was suspended last Thursday and the rest of the firm’s top management was fired.
Gould, who owns 19.5% of Commodore’s common stock, said in a statement: “I look forward to ensuring strong leadership at all significant levels of management, particularly to strengthen the sales function and establish expanded distribution in the United States.”
Rattigan’s departure came as a surprise to many analysts. Rattigan, a former Pepsico executive who was recruited by Gould two years ago, “gave an upbeat presentation” before a meeting of the Boston Computer Society late last month, said Michael Goulde, senior analyst with Yankee Group, a research firm. “Everything seemed fine, and there seemed to be a high degree of optimism,” Goulde said.
Although some analysts were unsure how Rattigan’s departure would affect the firm’s prospects, Wall Street took a dim view Thursday: Commodore’s stock fell $1.375 a share on the New York Stock Exchange to $10.50, a drop of about 12% from Wednesday.
Sales Failed to Improve
Industry analysts expect Gould to act as chief executive temporarily until a permanent replacement can be found. “Gould is not a an operations person,” says Jay D. Samstag, an analyst with the brokerage firm of Duff & Phelps.
Although Rattigan directed Commodore to profitability--primarily through an aggressive cost-cutting campaign--sales failed to grow as fast, and Commodore’s market share has continued to shrink, analysts say.
The lack of sales growth may have triggered Rattigan’s departure, says Jan Lewis, president of Palo Alto Research Group, which follows the microcomputer industry.In his lawsuit, Rattigan claims that Commodore, without consulting him, fired senior managers in the United States, hired new management for its Canadian unit and instructed other senior managers to withhold information and documents from him.
Rattigan alleged in the suit that last Thursday he received a letter from the company stating that he had been suspended, pending a special meeting of the board.
Commodore called the suit “wholly without merit.”
