Sage Group has taken radical action to kick-start growth in its key US division after ousting its two long-serving executives in the region.
The Newcastle-based accounting software developer has grown frustrated that growth at its largest division has not accelerated over the past six months despite a reorganisation of the business into four distinct operating units last May. Over the past year, Sage's organic revenue growth in North America was 4 per cent, a disappointing result compared with the 7 per cent achieved across the entire group and a 10 per cent rise in continental Europe.
As a result, Ron Verni, chief executive of the North American business and a Sage board member, and Jim Eckstaedt, chief financial officer of the US unit, have left the company with immediate effect. The remaining management structure will be maintained with senior executives reporting directly to Paul Walker, Sage chief executive, until a new regional CEO is appointed.
The management shakeout is the latest in a series of departures at Sage this year, most notably the shock exit of Sir Julian Horn-Smith, the long-serving Vodafone executive, who had only just taken up the role as chairman, due to differences in "culture and style". Both the US executives have been with Sage since the late 1990s and will receive pay-offs. Mr Verni's salary was $700,000 (£343,000) last year.
Despite a 3.4 per cent fall in Sage shares, analysts were positive. George O'Connor of Panmure Gordon said: "We are delighted with the move... There has been too much concentration on the trees and not enough on the wood – the emerging shape of Sage."
Kevin Ashton, an analyst with Landsbanki, said: "It is pretty unusual to see management shake-ups of this magnitude at Sage and it can only be welcomed."
Sage's overall revenue rose to £1.2bn in the year to the end of September while earnings grew 18 per cent to £283m.Reuse content