Webvan CEO Resigns From Cash-Starved Online Grocer

George T. Shaheen, one of the first “old economy” chief executives to defect to a “new economy” upstart, resigned Friday from the helm of cash-starved online grocer Webvan Group Inc.

Shaheen, 56, stepped down after concluding that “a different kind of executive is needed to lead the company at this time,” according to a statement by the company.

Shaheen wasn’t available for interviews Friday, Webvan spokesman Bud Grebey said.

Robert Swan, Webvan’s chief operating officer, will run the company until a new CEO is hired.

When he resigned from a $4-million-a-year job as CEO of Andersen Consulting in September 1999 to run Webvan, Shaheen added to the buzz surrounding Webvan’s attempt to revolutionize the grocery industry.

Shaheen’s departure comes less than two weeks after Foster City, Calif.-based Webvan released a dismal annual report that included a warning from its auditor expressing “substantial doubt” about the company’s ability to make it through this year.

Webvan’s stock closed this week at 12 cents on Nasdaq, a far cry from its all-time high of $34.

To lure Shaheen from Andersen, Webvan paid him a $13.5-million signing bonus so he could buy 1.25 million shares of the company’s stock, and provided him with an additional 15 million stock options at an exercise price of $8 a share.

In his resignation statement, Shaheen reiterated his belief in Webvan’s business and said that it “will alter retailing and the way people shop.”