Former Sunbeam CFO Russell A. Kersh is guilty only of a longtime association with an infamous CEO, says his attorney, Donald Zakarin. Kersh and former Sunbeam CEO "Chainsaw" Al Dunlap, who have worked together at various companies for more than 15 years, were charged in May by the Securities and Exchange Commission with perpetrating "a fraudulent scheme to create the illusion of a successful restructuring of Sunbeam and thus facilitate a sale of the company at an inflated price."
"The SEC's theories are baseless and nonsensical," says Zakarin, attorney for both men. He claims the SEC is pursuing his clients because of Dunlap's high profile. Although Kersh did not share Dunlap's notoriety, says Zakarin, "they can't go after Al unless they go after Russ. Russ was much more at the operational level on the finance side."
Zakarin says Kersh is busy with consulting work and his ownership of Nascar truck-racing teams. "This [lawsuit] has obviously impinged upon his ability to go out and work," Zakarin says. "While these proceedings are ongoing, that is a cloud that exists over his career."
And what a cloud it is. The SEC alleges that $60 million of Sunbeam's record-breaking $189 million in 1997 earnings from continuing operations were the result of accounting fraud.
The SEC says their turnaround tricks included the use of inappropriate accounting reserves, channel stuffing, recording revenue on contingent sales, booking future sales in the current quarter, and improper bill-and-hold transactions.
The SEC seeks to bar either man from acting as an officer or director of any public company.
Michael Newman, 44, is making a connection at consumer electronics retailer RadioShack Corp. The Fort Worthbased concern chose Newman to replace former CFO Dwain Hughes, who passed away in January. Newman had been VP and CFO of Intimate Brands Inc.
Finance must make Stephen Smith blush. The 41-year-old was named EVP and CFO at Elizabeth Arden Inc. Before joining the Miami- based maker of beauty products, Smith was with PricewaterhouseCoopers LLP.
HOME AWAY FROM HOME
Carol Tome thinks it's good to be home. Tome, 44, became CFO of home-improvement retailer Home Depot Inc. She assumes duties left behind by Dennis Carey, who was promoted to EVP of business development, strategy, and corporate operations at the Atlanta-based company.
The new chief of roast beef is Francis McCarron, 44. The former SVP for taxes is now CFO of New Yorkbased Triarc Cos., franchiser of Arby's fast-food restaurants. He replaces John Barnes, who retired in June.
Former Knight Ridder Inc. CFO Jean H. Mordo is no longer newsworthy. After just two months as CFO, Mordo, 56, has resigned. Succeeding Mordo at the San Jose, Calif.-based newspaper publisher is Gary Effren, VP and controller.
At New Yorkbased Barnes & Noble.com Inc., Marie Toulantis, 47, is a best-seller. The CFO was recently appointed to the newly created president and COO positions. She also assumes duties left behind by the departing EVP of E-Commerce, Carl Rosendorf. Treasurer Kevin Frain is now VP, finance, and assumes the CFO tasks.
Retailer Nordstrom Inc. has outfitted its corporate office with new CFO Mike Koppel. Koppel, 44, has been acting CFO since Michael Stein's September departure. Stein left during a management shake- up in which several Nordstrom family members assumed key roles. Koppel was VP and corporate controller at the Seattle-based firm.
THE BIG CHEESE
James Dollive is pretty crafty. Dollive, 49, previously SVP, finance and information systems, for Kraft Foods NA was named CFO of Kraft's worldwide food business--a new position. Ralph Nicoletti succeeds Dollive in his former finance post.
Timothy Page, 48, will add an element of style to Miami-based Perry Ellis International Inc. The new CFO joins the apparel maker from Farah Inc., where he was EVP and COO. He replaces Neal Nackman, now controller at Martha Stewart Omnimedia Inc.
Slipping on the corporate ladder is becoming increasingly common. CEOs and CFOs who left large old-coms seeking glory at dot-coms are beginning to return to Old Economy companies that are smaller than the ones they left. The latest example is Richard Nanula, 41, former CEO of now-defunct Broadband Sports Inc. (and onetime Walt Disney Co. CFO). Nanula joined biotech giant Amgen Inc. in June as EVP for finance, strategy, and communications, and, as of August 1, CFO.
Nanula joins several other execs who have come in from the dot-com cold, albeit at smaller firms, including Heidi Miller. Once CFO at $111 billion Citigroup Inc., she became CFO of a subsidiary of $10.1 billion Marsh & McLennan Cos. after her short stint as CFO of Priceline.com Inc. ended in November.
After leaving $25 billion Disney in 1998, Nanula was president of $4.3 billion Starwood Hotels & Resorts Worldwide Inc., then CEO of Broadband Sports, a venture-capital-backed group of Web sites for sports fans. Upward mobility for Nanula may be limited at $3.4 billion Amgen. Its new CEO, Kevin Sharer, has no immediate plans to hire a president.
Russell Reynolds recruiter Stephen Scroggins, who knows Nanula, says the job is no step down. "When you get to Richard's level, there are limited opportunities for where you can go to grow. There are only so many Disneys. But Amgen is a market leader, just like Disney."