|
VerticalNet CEO leaves
|
 |
January 8, 2001: 5:15 p.m. ET
VerticalNet CEO Galli jumps to Newell after five months on job
|
NEW YORK (CNNfn) - After spending a year and a half in the "new economy," the noted brand management executive Joseph Galli is returning to his roots in the "old economy," where profits have proven to be much less elusive.
Galli announced on Monday that he is leaving his position as president and CEO of VerticalNet Inc., an operator of industry-specific Web sites that serve as business-to-business communities, after just five months on the job to become president and CEO of Newell Rubbermaid, the well-known consumer products and home furnishings maker. (426K WAV) or (426K AIFF)
Galli, 42, left his position as president and chief operating officer at Web retailer Amazon.com (AMZN: Research, Estimates) last July to take command of VerticalNet (VERT: Research, Estimates), which gave him a $4 million signing bonus as an incentive to change jobs. However, Galli didn't stop the financial bleeding at VerticalNet; its stock dropped 93 percent in the five months he was there, reducing the company's market value to just $350 million.
VerticalNet's shares closed down $1.41, or 26 percent, at $3.91. They traded above $148 last year.
 VerticalNet tapped co-founder Michael Hagan to head the company. Hagan formed the company in 1995 along with Mike McNulty, who currently serves as senior vice president of business development. The sudden management change caused a flurry of analyst downgrades of VerticalNet's stock.
"Over the past year, we've seen VerticalNet's strategy change significantly," said Merrill Lynch analyst Edward McCabe. "We've also seen the CEO baton passed from Mark Walsh to Joe Galli, and now to Mike Hagan in five months.
"The changes in both strategy and leadership over the last year concern us," McCabe continued. "We will likely remain cautious on the stock until we have confidence that the company is executing on its strategy under Hagan."
Galli joins Newell Rubbermaid (NWL: Research, Estimates) as its president and CEO, succeeding William Sovey. Sovey will retain his position as chairman.
"What excites me most about working for Newell Rubbermaid is the opportunity to return to my roots in the durable goods industry, and to apply the skills I've learned in the 'new economy' to an area that I know and love best," Galli said in statement.
| |
 MANY OF ITS PRODUCTS ARE HOUSEHOLD NAMES
|
|
| |
|
Newell Rubbermaid has struggled since its $5.1 billion acquisition of housewares-maker Rubbermaid Inc. in 1999. Its well-known consumer brands include Rubbermaid containers, Anchor Hocking glassware, Little Tikes toys and Graco strollers.
|
|
|
Before joining Amazon.com, Galli had a successful 19-year career with Black & Decker. He moved up through sales and marketing positions at Black & Decker to become the president of its North America Power Tools Group at age 35. Galli is credited with developing and launching the DeWalt brand of industrial power tools. He also helped restructure the power tool maker's European, Asian and Latin American operations.
At Freeport, Ill.-based Newell Rubbermaid, a $6 billion consumer products manufacturer, Galli will oversee worldwide operations and help steer the company's growth plans and new product development. Shares of Newell Rubbermaid added 94 cents to $24.81 in Monday afternoon trading.
Click here to check on Internet stocks
VerticalNet recently sold its NECX subsidiary to Converge Inc., a high technology marketplace. NECX operates a global trading exchange that matches buyers and sellers of electronic components and computer systems, and trades in excess of $1 billion annually in North America, Asia and Europe. In the three months ended Sept. 30, VerticalNet had a net loss, not including non-cash expenses, of $17.7 million on revenue of $73.7 million. It had about $145 million in cash at the end of the third quarter, equal to about $1.67 per share.
A spokewoman for VerticalNet said that Galli has agreed to refund his $4 million signing bonus on a pro rata basis, meaning that he will return $2.3 million to VerticalNet. VerticalNet also had given Galli stock options worth about $21 million on the date of the grant; Galli collected nothing from the options, which he surrendered when he left the company. 
|
|
|
|
|
|
Rubbermaid
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
