Fall in Shares Following Polycom's CEO Expense Report Scandal

28 Jul 2013

Last week there was a 15 percent fall in Polycom shares as prices dropped to $9.49, eliminating $273 million in market capitalization; this comes as a result of the unexpected resignation of President and CEO Andrew Miller.

"Irregularities" had been discovered in Miller's expense reports, and the company stated that Miller took responsibility for this. Bridge Growth Partners has been a Polycom board member since 2005, and the managing principal at that company, Kevin Parker, is acting as its interim chief executive officer.

Parker said: "Andy Miller's resignation under these circumstances is disappointing and should not be viewed as a reflection of the financial integrity of the company, the strength of our team or our plans for the future. I look forward to working with the Polycom team, partners and customers to drive our strategy forward, and we thank Andy for his four years of service."

On July 24, Polycom's market capitalization decreased to $1.65 billion, demonstrating a fall from the previous day's $1.92 billion.

Polycom commented that Miller's departure "does not signal a change in our partner program or our commitment to channel partners. Kevin [Parker] understands the important role our partners play in our success and is 100 percent in line with our approach and vision. Kevin, our executive team, and the Board are confident in Polycom's current business, strategy, leadership, products and solutions -- and are fully committed to our partners and customers."

The departure of Polycom's Miller follows a week after the Executive Vice President of Global Sales at the company, Tracey Newell, left for another company. Polycom has noted that the resignation of Newell has no correlation with Miller's departure.

A 15 percent fall in net income to $5.29 million was posted by San Jose, California-based Polycom in its Q2; in the same quarter last year, the figure stood at $358.5 million.

According to Polycom, there is no "material impact" as a result of the company's current or former financial statements.

Parker stated: "While this situation is disappointing, it should not be viewed as a reflection of the financial integrity of the company, the strength of our team, our plans for the future, or the integrity of its nearly 4,000 employees worldwide. The Board and I remain fully committed to Polycom's strategy, customers, partners, shareholders and employees."

Ron Myers, the senior vice president of global channels, will lead Polycom's channel sales organization. (CY) Link



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