He’s a Hands-On Crisis Manager : Profile: When Platinum Software floundered, board member Carmelo S. Santoro stepped in. It’s a role he’s familiar with.
Carmelo J. Santoro, who sits on the board of seven high-tech companies, was at it again.
Santoro stepped in as acting chief executive of Platinum Software Corp. a week ago, after requesting the resignation of the Irvine-based company’s founder, chairman and CEO.
It was not the first time Santoro had traded his outside director hat for that of crisis manager. In early 1990, he became acting chairman of Ashton-Tate Corp. after the Torrance-based company reported a $28-million annual loss and its chief executive resigned. Two years later, he took the chairman’s seat temporarily at AST Research Inc. in Irvine after the ouster of the company’s co-founder, Tom Yuen, in an internal power struggle.
Frank Michnoff, an analyst at Prudential Securities Research in New York, said of Santoro, “If you’re going to pull a stunt as a manager, he’s not the guy to have on your board.”
Because he plays his role so dramatically, Santoro has his detractors.
Yuen recalls bitterly how Santoro sided with Safi Qureshey, now chairman and CEO of AST, in a dispute between the company’s founders. Santoro filled in as chairman for a year, recruiting seven new executives to shepherd the computer maker to its next stage of growth.
“Any board he gets on, somehow he becomes chairman,” Yuen said last week.
But Dallas lawyer M.D. Samples, who serves with Santoro on the board of Dallas Semiconductor, said that Santoro “epitomizes what a board member should be all about. . . . He doesn’t just attend meetings, collect his fee and go home.”
In an interview last week at Platinum’s Irvine headquarters, Santoro, 52, conceded that “I have the reputation of being Carm the Founder Killer. I’m a Mr. Fixer Upper kind of guy; I’m not afraid to make tough decisions.”
Santoro asked Platinum chief Gerald R. Blackie and three other executives to step down, he said, when it became clear that the accounting software company’s revenue accounting practices would likely be the subject of shareholder lawsuits and a Securities and Exchange Commission probe. The company announced that it will have to scale back its revenue from the past four quarters by as much as $10 million.
“The SEC wants to see that people who are independent and who are not potentially tainted by lawsuits have control of the company,” Santoro said. “To that end, the four officers resigned so we could clear the way for an SEC investigation should (the agency) choose to do that.”
As board member turned acting CEO, Santoro now has to calm investors and customers, restructure Platinum, lay off some of its 820 employees, and recruit new executives. Already, Santoro has hired a new chief financial officer, Michael Simmons.
Sitting at the head of the accounting software manufacturer, however, is not a responsibility that Santoro wants to make into a career. He’s had his fill of all-consuming top management posts and now enjoys being sought after to serve on corporate boards.
“I am absolutely unwilling over the long haul to go back to being a 100-hour-a-week guy,” Santoro said. “My wife is my first priority.”
Nancy Santoro, an interior designer in Rancho Santa Fe, was found to have lymphoma in the fall of 1992. The cancer has been in remission for a year.
“It was an experience that changed our lives,” her husband said. “Since 1959, when I graduated from high school, I have been as career-minded as any person who ever lived. But on the day I learned Nancy had cancer, it just turned a switch in my head.”
The New York native holds a Ph.D. in physics from Rensselaer Polytechnic Institute in Troy, N.Y. He spent eight years with Motorola, where he directed the group that made one of the first microprocessor chips. He served as CEO and president of Silicon Systems Inc. in Tustin from 1981 until 1991, during which time he took the company from $12 million in annual sales to $180 million.
At Silicon Systems, Santoro had an “excellent rapport with customers” and promoted an open management style that allowed for good communication among employees, company spokesman Mark Jorgensen said last week.
By the late 1980s, Santoro “started formulating the idea of retiring and becoming a professional board member,” he said. Today he is an outside director of AST Research, Dallas Semiconductor Corp., Silicon Systems and four other corporations.
His main business priority for now, though, is Platinum Software.
Santoro said that he didn’t realize the depth of the company’s problems until a week before the firings were announced, when the accounting firm he hired to conduct an audit completed its review. “We didn’t know that we were going to have to restate earnings to the extent that we will have to,” he said.
A top priority, he said, is reassuring customers that Platinum has a good product. “Our clients are reading the press and doubting what this company has,” he said. “In fact, the company’s people, technology, products and business aren’t any different this week than they were last week.”
Also, he must calm the fears of Platinum employees. “The word restructuring does not exactly reap confidence in the hearts of employees,” Santoro said. “There may be some layoffs and some products we don’t go through with.”
Santoro said he looks forward to finding a replacement for Blackie so that he can get back to spending time with his wife, six children and four grandchildren.
“I was so career-focused that I did not have a great relationship with my children when they were young--I was always working when they needed me,” Santoro said. “So I really enjoy my grandchildren.”
He also wants to return to his hobbies: painting and writing country-Western music. Asked for sample lyrics of one of his songs, Santoro thought for a moment and then offered:
“Without love, there ain’t no light at the end of the tunnel.”
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Profile: Carmelo J. Santoro
Positions: Interim CEO, Platinum Software; co-chairman, AST Research
Education: Ph.D. in physics, Rensselaer Polytechnic, 1967; B.S., Manhattan College, 1963
Background: Raised in Mamaroneck, N.Y. Former president/CEO and current board member, Silicon Systems. Also board member of several other companies.
Hobbies: Plays guitar, writes country-Western music, paints, skis and plays golf
Residence: Rancho Santa Fe
Source: Platinum Software Inc.
