NEW YORK — Mark Weber's management style didn't last very long at Phillips-Van Heusen.
The clothing and footwear giant surprised the industry and the markets Monday with the news that its chief executive officer would leave the company "by agreement with the board" after only eight months in the job. He will be replaced by PVH's president and chief operating officer Emanuel Chirico, 48.
Meanwhile, Bruce Klatsky — who handpicked Weber to replace him as ceo last June — has agreed to continue as chairman and seek reelection to the board this summer. Klatsky originally had planned to step down to focus on his new hedge fund. His new term as chairman will continue to June 2007.
Weber's annual pay, excluding options, was $2.4 million last year. The company's proxy states that Weber's termination payout entitles him to three times "his average cash compensation."
Weber's departure had little effect on PVH's shares — they closed at $36.09 in trading Monday on the New York Stock Exchange, down 74 cents, or 2 percent — but it led to a whirlwind of speculation about the reasons. Two issues immediately became clear: The group's largest single shareholder, Apax Partners, which owns 38 percent of PVH, clearly flexed its muscle over Weber, and the outgoing ceo's style of management was the primary reason for his ouster.
Separately, PVH said it was raising its fiscal 2005 guidance to at least $1.99 per share, excluding one-time costs associated with the company's secondary offering. Its previous estimate was $1.97 to $1.99 per share, excluding the one-time costs. For the fourth quarter 2005, the company guided earnings per share to be at least 37 cents, or 1 cent above Wall Street's consensus estimates for the quarter. For fiscal 2006, the company increased its diluted EPS guidance to between $2.11 to $2.18, which includes the impact of expensing stock options.
The rapid change in PVH management reflects a new paradigm on Seventh Avenue, where private equity shareholders have more control than ever over the destiny of a company. And it's another example of the difficulties companies face in planning management succession, coming close on the heels of William D. Perez resigning as chief executive of Nike. He'd been brought on board to succeed Nike founder and chairman Phil Knight.
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