Citrix CEO retires as activist investor Elliott snatches the wheel
'Underperforming product lines' to be put under microscope
Citrix chief exec Mark Templeton has said he will retire, as activist investor Elliott Management takes a larger role in the company.
Templeton joined Citrix in 1995 and has served as its CEO since 2001. But hedge fund Elliott has been among the most vocal in calling for change following what it describes as years of underperformance.
On Tuesday, Citrix reported revenue for the second quarter of its fiscal 2015 of $796.76m and net income of $103.28m, or $1.00 per diluted share. Both figures beat analysts' estimates.
Nonetheless, profit-hungry Elliott, which owns around 7.5 per cent of Citrix stock, has said Citrix has "struggled operationally" and that it has "missed a profound value creation opportunity" as a result.
In June, the fund's management said it had reviewed Citrix's business with a team of senior software execs and come up with a "strategic and operating plan" that it claims will make the company more efficient and valuable.
It now looks like Elliott will get to give that plan a shot. On Tuesday, Citrix announced that Elliott senior portfolio manager Jesse Cohn has been appointed to a seat on the company's board, replacing outgoing board member Asiff Hirji, effective immediately.
Citrix and Elliott will also jointly seek out another board member who is "mutually agreeable to both" and will replace another, unnamed current board member.
Citrix's board has also formed a formal "operations committee" that will work with the company's senior management to review its operations with an eye to improving its margins, profitability, and capital structure. The committee will be led by current board member Robert Calderoni, who has also been appointed executive chairman of the board.
Under particular scrutiny will be Citrix's GoTo line of products, which in Elliott's view is "distinct" from the company's core product set and could easily be sold off. Elliott has said it believes Citrix's product portfolio includes "far too many underperforming product lines" and the fund has made no secret that it would like to take an axe to them.
As for Templeton, the 20-year Citrix veteran will continue to lead the company until a successor has been named. Citrix has retained the services of executive search firm Heidrick & Struggles to help look for candidates.
"Mark Templeton is a software industry giant. Under his 20 years of leadership, Citrix has transformed to a $3bn global technology leader," said Thomas Bogan, the company's lead independent director. "We look forward to continuing to work with Mark to drive the strategy we have laid out for the future, while we work to identify his best possible successor." ®