On the heels of Zenith's emergence from Chapter 11 as a wholly owned subsidiary of Korea's LG Electronics, president/CEO Jeffrey Gannon has resigned and been replaced by Australian-born LGE senior VP Ian Woods, a management guru who has been working with Zenith for the past year.
Gannon departs having spent less than two years at Zenith's helm, having left a 24-year career at GE in mid-January 1998. But that falls short of shortest-tenure records for either of his posts at a major U.S. electronics company -- both of those are held by former RCA executive Maurice Valente. The emotionally troubled ITT executive Valente assumed RCA's presidency in 1979 and lasted just six months. Another ex-GE'er, Robert Fredrickson, who became RCA president in 1982, moved up to the CEO slot in March, and was gone just more than a year later when GE completed the acquisition of RCA.
In a departure statement, Gannon said that with Zenith's restructuring completed, "I am ready for new challenges [and] I think this is the right time for a change in leadership."
Based on available contract information, Gannon bails out without a golden parachute, considering his position. He appears to be entitled to about $600,000 in guaranteed bonuses for the remainder of this year and, as he is not leaving for cause or retirement, a lump-sum payout of his $600,000 annual salary. He also gets about $218,000 from a retirement plan fund established to compensate him for what he lost when he left GE.
The news of Gannon's resignation came on the heels of Zenith's announcement of a third quarter net loss of $13 million, down from the year-earlier loss of $119 million. Excluding restructuring charges, Zenith's loss dropped to $5.8 million from $18.6 million. For the first nine months the net loss dropped to $59 million from $187.8 million, and the net loss from operations fell to $44.4 million from $80 million.
Sales for the quarter dipped less than 1% to $228 million, as increased sales of consumer electronics fell just short of offsetting the discontinuation of Zenith's analog CATV set-top tuner business. Nine-month sales of $596 million were off 11.7%.