December 19, 2011
Last Wednesday, SGI announced that long-time company CEO Mark Barrenechea had resigned from the company, effective January 1, 2012. Until the board finds a permanent replacement, SGI Board Chair Ronald Verdoorn, will be subbing for the departing Barrenechea as CEO.
In January, Barrenechea will begin his new gig as CEO and President of OpenText, a Waterloo, Ontario-based maker of Enterprise Content Management (ECM) software. OpenText is about three times the size of SGI, with 4,400 employees to SGI's 1,500. He will replace the current OpenText President and CEO John Shackleton, who will retire from his executive role and the company board. Shackleton had been the CEO since 2005.
Barrenechea departure leaves some uncertainty in SGI's future. It was he who shepherded the 2009 Rackable Systems acquisition of the legacy SGI company, two years after taking over as CEO at Rackable. The merger has produced a more robust company that has managed to maintain decent shareholder value over the past couple of years, despite a hyper-competitive server market in the aftermath of a punishing global recession.
SGI revenue for FY11 (ending in June) was a record $629.6 million, which represented a 56 percent increase over FY10. While recording only one quarter of pure GAAP profit during Barrenechea SGI tenure, those losses have narrowed -- 21 million in FY11 versus in $88 in FY10 . With the acquisitions of SGI Japan, storage maker COPAN Systems, and software vendor OpenCFD Ltd over the past two years, the company has diversified its offerings, while remaining debt free. SGI is projecting $740 to $780 million in sales for FY12 with a modest GAAP profit instead of a loss. And despite the departure of Barrenechea, the company is sticking to those numbers.
The press release outlining the CEO's resignation did not provide any details for his leaving. The 46-old Barrenechea, though, has been fairly mobile through his career. Prior to joining Rackable in 2006, he did a three-year stint as an executive vice president and CTO for software maker CA, Inc., which used to be known as Computer Associates International. From 1994 to 2003, he worked at Oracle in executive management. Prior to that, he worked at Scopus and Tesseract, both software firms.
In fact, except for SGI, all of Barrenechea's employers have been software companies (Oracle had not yet acquired Sun Microsystems during his tenure there). In that sense, his move to OpenText is more in line with his non-SGI career path.
Barrenechea is likely to receive significantly more compensation at OpenText than he did at SGI. In 2010, Barrenechea earned $948,037, including salary, stock options, and other compensation. In that same year, OpenText CEO Shackleton pulled in $6,794,561.
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