And another one bites the dust

While SunGard technically bought the U.S., German and Belgian subsidiaries of XRT, it actually acquired the TWS and Globe$ brands—XRT’s high-end treasury workstation products, their customer base and the rights to market those products anywhere in the world, explains Ken Dummitt, president of SunGard/AvantGard. According to Dummitt, SunGard secured three valuable assets in the deal: a prestigious portfolio of customers, a staff of talented people and good products that “complement our present offerings.” While he suggests that SunGard is likely to stretch its AvantGard infrastructure umbrella to cover the new XRT products, he admits, “We know and respect those products from competing against them. You don’t learn everything about a new product until you get under the covers with it. But at this point, we see the XRT products as filling in gaps among our other AvantGard products.” With these latest additions, “those gaps in our treasury applications are filled,” he adds.

Now, SunGard is focused on expanding its AvantGard footprint into the payment space beyond treasury operations and is considering a range of buy-versus-build decisions about how to expand that offering, Dummitt explains.

The loss of French-owned XRT came as little surprise. Many of the foreign-owned treasury software companies, XRT among them, have struggled to make sales in the less saturated U.S. market or have been absorbed by powerful domestic rivals in deals like Wall Street Systems’ (WSS) purchase of French-owned Trema, Thomson’s buy of the Canadian-owned Selkirk and SunGard’s acquisition of British-owned Integrity. The rewards for SunGard are apparent: XRT still has many of the blue-chip clients that SunGard covets, observes treasury technology veteran Glen Solimine, CEO of financial technology provider Speranza Systems Inc. in Scarborough, Maine, and a former employee of both SunGard and XRT. “Culturally, it should be a good fit, and it will be great for XRT clients to have a vendor with a clear path forward,” Solimine says. “SunGard has a great client-support structure that XRT users will appreciate.”

XRT was once a dominant player and still has good clients in the U.S., notes Mike Gallanis, a principal at Treasury Strategies Inc. Since XRT was acquired by Cerg, its greatest success has come in French-speaking countries, and by spinning off U.S. operations, Cerg may be choosing to focus on that core business, he speculates.

Snapping up XRT is a much-practiced move for SunGard. It has been the treasury technology giant’s enduring strategy to acquire treasury software providers and attach them to its “formidable infrastructure,” notes Maggie Scarborough, research manager for corporate banking at Financial Insights. “When they can pick up a company for a relatively cheap price, they usually do.” Indeed, SunGard has prospered by acquiring and merging two or three competitors, using that scale advantage to weaken its rivals in market competition and then buying those faltering rivals at attractive prices and adding further to its scale advantage.

For SunGard, the XRT portfolio also represents a ticket to better global credentials, an important factor when it faces WSS in competitive bidding, TreaSolutions President Dan Carmody says. “Once SunGard learns what XRT customers require, they should be able to migrate them over time to the most appropriate SunGard upgrades,” he explains. If SunGard, as expected, incorporates the best features of XRT systems into its cross-platform AvantGard functionality, it will have another set of tools to attract potential new customers, Carmody points out.

With the XRT acquisition, Scarborough observes, the vendor ranks have thinned to just four major players: SunGard, Wall Street Systems, Simcorp and Thomson. “After that, there are just a few smaller players—Kyriba, Chesapeake Systems, Misys and the remnants of Gateway,” she points out. Thomson is selling the system it acquired from Selkirk “like gangbusters” to the middle market and the low end of the large corporate market, while WSS and Simcorp focus on large, sophisticated treasuries and SunGard has “something for everyone,” she reports.

At almost the same time SunGard was acquiring XRT, State Street Bank was acquiring Currenex, a foreign exchange portal. State Street already owns FX Connect, so consolidation drivers continue to work across the treasury technology spectrum.

Want to avoid a fight? Don’t talk about politics, religion or executive compensation

CII supported what the SEC had originally adopted in November, which required companies to report the aggregate value of equity awards at the grant date in the Summary Compensation Table. The new version permits companies to report compensation costs over the period of service. “We believe it is questionable whether the new requirements will make the Summary Compensation easier for companies to prepare and investors to understand,” CII’s General Counsel Jeff Mahoney wrote in the letter to the SEC.

And CII is not alone: The Teachers Insurance and Annuity Association of America and College Retirement Equity Fund (TIAA-CREF) and California State Teachers’ Retirement System (CalSTRS) also prefer the earlier version because they feel that reporting the aggregate fair value offers a more accurate picture of the compensation committee’s actions and intentions during the given reporting period. In its defense, the SEC claims that its new approach gives investors a better idea of the compensation earned by the executive during a particular reporting period as opposed to the awarded compensation.

The move caught compensation experts unaware. “It was a complete surprise,” says Mark Borges, a principal in the Washington Resource Group of Mercer Human Resource Consulting. “The presentation of the information and the [explanation] of it is a lot less simple—more complicated.” He adds that companies that thought they were getting a jump on things in the fall, suddenly came back from the holidays to find that much of what they’d been doing would have to be redone because the rules had changed. “That meant that not only had the numbers in the tables changed,” says Borges, “but in some instances the [top five] individuals in the tables had changed.”

The California Public Employees Retirement System (CalPERS) also expressed dismay at this surprise move. “It’s our preference that compensation be presented all at once, rather than staggered,” says CalPERS spokesperson Clark McKinley.

Also upset by the SEC flip-flop is House Financial Services Committee Chairman Barney Frank. Frank called on Congress to move to restrain executive compensation and is moving ahead to schedule hearings on it. While the legislative details have not been worked out as yet, the communications director for the Financial Services Committee, Steve Adamske, says: “The principles of what [Frank] introduced in 2005, which means shareholder votes and some kind of shareholder say-so in executive pay packages, is what he is planning.” All of which suggests that in addition to executive comp being a hot-button issue at annual meetings this spring, it may also turn into an issue at the polls this fall.

The Home Depot Inc. announced that current executive vice president and CFO Carol Tomé will assume responsibility for mergers and acquisitions at the $81.5 billion home improvement retailer, which is based in Atlanta. The announcement came in the wake of the resignation of Robert Nardelli as Home Depot’s chairman and CEO.

United Parcel Service Inc. elected CFO Scott Davis to the additional post of vice chairman of the $42.6 billion package delivery company, which is based in Atlanta. Davis, 55, joined UPS in 1986, when UPS acquired I.I. Morrow, a technology company, where he served as CFO and CEO. Beginning in 1991, Davis held positions of increasing responsibility at UPS, including accounting manager and treasury manager. Scott was named vice president of finance in 2000, and in 2001 he was named CFO.

BancWest Corp. appointed Thibault Fulconis executive vice president and CFO of the San Francisco-based holding company with $66.7 billion in assets. Fulconis replaces Douglas Grigsby, who is retiring. Fulconis joins BancWest from BNP Paribas, where he served most recently as head of finance and development for the international retail and financial services division. He has been with Paribas since 1989. BancWest is a subsidiary of BNP Paribas.

Staples Inc. appointed Nicholas P. Hotchkin senior vice president and treasurer of the $16.1 billion office supply company, which is based in Framingham, Mass. He reports to Staples’ Vice-chairman and CFO John Mahoney. Previously, the 41-year-old Hotchkin served as finance director at Delphi Packard Electric Systems, a division on Delphi Corp., which he joined in 1999. Before working at Delphi, he was director of worldwide pension funding and analysis for General Motors treasurer’s office.

The New York Times Co. appointed R. Anthony Benten vice president and controller of the $3.3 billion media company, which is based in New York. Benten, 43, had been vice president and treasurer. Benten joined the New York Times in 1989 as a financial analyst in the treasury department. The New York Times also named George A. Barrios, 41, vice president and treasurer; Barrios had been CFO and senior vice president of New England Media Group, a unit of the New York Times, which includes The Boston Globe. Additionally, the New York Times promoted James C. Lessersohn, 51, who is currently vice president of finance and corporate development, to senior vice president of corporate development and named Stuart P. Stoller, 51, who is currently vice president of process engineering and controller, to senior vice president of process engineering.

Conseco Inc. named W. Mark Johnson chief compliance officer of the $4.3 billion insurance company, which is based in Carmel, Ind. Johnson joins the company from GE Employers Reassurance Corp., where he served as chief compliance officer for three years and as chief counsel during the last year with the company. Prior to that he was with Swiss Re in various compliance roles and at Anthem Blue Cross Blue Shield as a director of operations.

Affymetrix Inc. named James Gibson principal accounting officer of the $367.6 million biotech research company, which is based in Santa Clara, Calif. Gibson joined the company in 2002 and was promoted to vice president of accounting and controller in January 2006. Before joining Affymetrix, he was controller and director of finance for Netflix from 1999 to 2002. In separate news, Affymetrix’ executive vice president and CFO Gregory T. Schiffman resigned from the company to become senior vice president and CFO of Dendreon Corp., a biotech company.

Equity One Inc. named Deborah Cheek as director of finance of the $253 million REIT, which is based in North Miami Beach, Fla. Prior to joining Equity, Cheek served as CFO of Landex Corp. and as regional finance director of Kimco Realty Corp., a REIT.

Cato Corp. appointed Thomas W. Stolz as executive vice president and CFO of the $836.4 million women’s fashion retailer, which is based in Charlotte, N.C. Prior to his appointment, Stolz, 45, served as CFO of Citi Trends Inc., from 2000 to 2006. Earlier, Stolz served in executive finance positions at Factory Card Outlet and Dollar General Corp. Stolz replaces Reynolds C. Faulkner, who left to pursue other opportunities.

U.S. Cellular Corp. named Steven T. Campbell executive vice president and CFO of the $3 billion wireless service provider, which is based in Chicago. Campbell, 55, joined U.S. Cellular in 2005 as vice president and controller. Prior to that he served in financial positions at 3Com Corp. from 1997 to 2005, U.S. Robotics Corp. from 1995 to 1997 and Amoco Corp. from 1980 to 1995. Campbell replaces Kenneth R. Meyers, 52, who resigned to accept the position of executive vice president of Telephone and Data Systems Inc., a $4 billion telecommunications provider. TDS is the parent company to U.S. Cellular. 

Saks Inc. named Dennis Ling senior vice president and treasurer of the Saks Fifth Avenue Enterprises, the company’s main operating division. Ling will assume the post of senior vice president and treasurer of the $6.0 billion New York retailer by May 2007. Ling joined Avon Products Inc. in 1986, where he held finance positions of increasing responsibility; most recently he was Avon’s vice president of finance. Saks is in the process of consolidating its finance and executive functions from Birmingham, Ala., to New York, where the company will be headquartered. Ling will take over from the current senior vice president and treasurer, Wes Burton, who is based in Birmingham and will remain in that post until Ling assumes the responsibilities in spring 2007.  Burton will then be leaving the company to pursue other opportunities.

AutoNation Inc. appointed Michael J. Short executive vice president and CFO of the $19.3 billion automobile retailer, which is headquartered in Ft. Lauderdale, Fla. Short, 45, joins AutoNation from Universal Orlando, the theme park operator, where he’s served as CFO since 2000. Prior to that, Short served in finance positions at Joseph E. Seagram & Sons Inc. and IBM Corp. Short succeeds Alex McAllister, who served as interim CFO. McAllister will return to this position as corporate controller until March 31, 2007, whereupon he will retire.

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