Avici Cans Kaufman, Leans on Leighton
It shouldn't come as much surprise that Kaufman was shown the door, after several quarters of missed targets. In September, Avici announced it wouldn't hit its target of 20 to 30 percent annual revenue growth in 2004 (see Avici Target out of Reach ).
When asked if there was a financial catalyst for Kaufman's ouster, Avici chairman Surya Panditi says there was no specific event that led to the board's decision, but he praised Leighton's hands-on service provider experience as part of the change.
"Bill has significant experience building data networks, IP networks specifically," Panditi told Light Reading this afternoon. "Bill's group was responsible for the decision to bring Avici into AT&T… So he's known us from the outside looking in...
"Bill certainly can relate to what our prospects need and want," Panditi says.
Leighton has never been the CEO of a publicly traded company before, but he's had some broad responsibilities in his roles at AT&T. He did, in fact, run a 2,000-person group within AT&T, for which he had profit-and-loss responsibility, Panditi says.
Leighton's career at Avici began when he joined the company's board in May after retiring from AT&T, where his last position was that of VP of research (see Avici Adds to Its Board).
Kaufman joined Avici in 2000 as chief operating officer and director. He became CEO in early 2001, the same time Panditi was elected as Avici's chairman. Kaufman had been president of Lucent Technologies Inc.'s multiservice core networks division, responsible for the ATM and frame relay core switching, IP core routing, ATM access, and the TDM crossconnect product lines before joining Avici.
Panditi adds that Leighton's role won't be that of a babysitter while the company searches for a permanent CEO. " 'Interim' does not mean he's going to be a caretaker," he says.
Avici has AT&T as a customer, and its strategic partners include Huawei Technologies Co. Ltd. and Nortel Networks Ltd. (NYSE/Toronto: NT). None of the relationships have minimum purchase commitments tied to them, but the three were the only sources of revenue mentioned in Avici's third-quarter results, announced last month (see Avici Banks on Partners and Avici Expands AT&T's IP Backbone).
There's no current info on Kaufman's separation agreement. Per his last agreement, dated July 2000, Kaufman was in line to get 12 of salary and benefits, and accelerated options vesting, if he's "terminated without cause" or given a "significant reduction in responsibility," according to the offer letter listed in Avici's SEC filings.
Avici's shares rallied on the news of the new appointment. The company's shares climbed $0.61 (10.08%) to $6.66 in trading on Monday.
— Phil Harvey, News Editor, Light Reading