Security expertise ‘not paramount’ for next Diebold CEO

Thomas Swidarski steps down amid poor earnings forecast
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Thursday, January 24, 2013

CANTON, Ohio—Diebold CEO Thomas Swidarski resigned Thursday and a search for a replacement is under way. In that search, security industry expertise may be a plus, but it is "not paramount," a Diebold spokesman told Security Systems News.

The Jan. 24 announcement about Swidarski, a 17-year veteran of Diebold who served as CEO since December 2005, came after the company issued an adjusted earnings forecast earlier in the day.

Asked if security expertise would be an important qualification for the future CEO of Diebold, spokesman Mike Jacobsen said “a track record of success and profitability [in an organization] and the execution of a growth strategy” would be the major qualifications.

“Security expertise may not be paramount, because we have a strong leader in Tony [Byerly, who took over as head of the security division last June],” Jacobsen said. However, security expertise “as it relates to software-led services in the security space would be of benefit.”

Diebold Inc. will issue its final fourth-quarter earnings report and hold its year-end investor call on Feb. 12.

On the morning of Jan. 24, it issued a preliminary report that showed $840 million in 2012 fourth-quarter revenue, “a loss from continuing operations of 12 cents per share, or income from continuing operations of 45 cents per share on a non-GAAP basis.” It adjusted its expectation for full-year 2012 EPS from continuing operations to “$1.28, or $2.07 on a non-GAAP basis, on revenue growth of approximately 6 percent.” Its preliminary full-year free cash flow is now $85 million.

George S. Mayes Jr., EVP, global operations, has been promoted to the newly created position of chief operating officer. Mayes will report to Henry D.G. Wallace, Diebold executive chairman of the board.

Wallace will assume regular oversight of the company until a new CEO is hired. Mayes will be responsible for daily operations.  

Jacobsen said that Diebold had made progress under Swidarski’s leadership, but not enough progress and not fast enough.

The board of directors considers Diebold’s strategies “to be sound … but execution of those strategies needs to improve,” Jacobsen said.

In a prepared statement, Wallace said, "we have underperformed against the opportunities in the marketplace."

He said Mayes’ immediate focus “will be to look at all aspects of the organization and identify areas that will help us accelerate the speed with which we reduce our cost structure and capitalize on changes in the marketplace.”