Former Xerox CEO Burns, Who Nearly Destroyed Company, Still Chair
Xerox Corp. (NYSE: XRX) CEO and Chair Ursula Burns did more to destroy the company than anyone in its decades long history. She was removed as chief executive, pending a split of Xerox into two companies and an executive search for a new CEO, but she will stay on as board chair of one of the two companies that Xerox will create as it cleaves itself in half.
The publicly traded corporation’s board decided:
In January, Xerox announced it would separate into two stand alone, market-leading companies – a Document Technology company comprised of its Document Technology and Document Outsourcing businesses and a Business Process Outsourcing (BPO) company. The separation is on track to be completed by the end of 2016. The Document Technology company will be a global leader in document management and document outsourcing with $11 billion in 2015 revenue.
Corporate raider Carl Icahn took a position in Xerox before the split.
Burns will have the board chair at the new document technology operation. Perhaps a new CEO can salvage what little Burns has left.
At the annual meeting, Burns stated:
In 2015, we continued to optimize and position our portfolio for the future. By selling our Information Technology Outsourcing business and restructuring our government healthcare business, we achieved greater focus on higher margin growth segments in our Business Process Outsourcing and Document Outsourcing businesses. Additionally, in Document Technology we introduced nine new products that reinforced our reputation for market-leading innovation.
A look at 2015 results, and the long-term price of Xerox shares, shows how little these decisions meant.
Xerox stock has dropped 27% in past two years, while the S&P 500 has gained 8%.
In the first quarter of 2016, revenue dropped 4% to $4.281 billion. Net income dropped 85% to $34 million. Xerox broke even by a tiny margin. The results were a continuation of poor numbers that were not better in 2015.
Burns’s 2015 compensation was $10.6 million. It is impossible to understand how the board awarded her so much, and gave her any position in one of the two new companies.