Diebold CFO departs as company faces fiscal challenges
Diebold Nixdorf has announced the departure of its CFO, Chris Chapman, and has hired an interim replacement while working with executive search firm Heidrick & Struggles to find a permanent successor.
While switching up a company’s senior executives is a common occurrence in everyday business, such moves take on special meaning when it occurs at a company with new chief executive at the helm, facing significant pressure from investors. Diebold's stock price on January 2, 2018 was $17.50 and closed last Friday at $4.50.
Diebold says Chapman's departure was voluntary. “Chris left the company to pursue other opportunities. He is staying on through January 15 in an advisory capacity to assist with the transition. So if Chris chooses to remain in the area, he has options available to him," said Mike Jacobsen, senior director of corporate communications at Diebold Nixdorf.
Jeffrey Rutherford was named interim CFO while the company searches for a long-term replacement, according to the press release. Rutherford has a 35-year career in corporate finance and accounting. He is currently chairman at Edgewater Technology and will continue in that role as Edgewater is currently going through a merger.
Diebold recently secured a $650 million loan to shore up its shaky finances as it embarks on a cost-cutting effort called “DN Now” to streamline the business. There has also been an unconfirmed report from CNBC that the company has hired advisers to seek a sale.
Diebold hired outsider Gerrard Schmid as its new CEO and president in February 2018. Schmid led D&H to be acquired by Vista Equity Partners, which already owned Misys. The two companies were merged to form Finastra. The CEO of Misys was given the job to lead Finastra while Schmid was brought in to turnaround Diebold.
Diebold faces headwinds in a several areas. First, there is a prevailing trend to move away from cash and toward use of plastic or digital funds, which challenges the company's ATM business.
Also, Diebold recently acquired ATM manufacturer Wincor Nixdorf. Although Diebold has spent years broadening its offerings beyond ATMs, this acquisition concentrates Diebold’s position in the ATM market instead of diversifying it. Further, the acquisition has been both complex and difficult since Diebold is still buying shares from investors who did not tender during the 2016 acquisition.
Meanwhile, fintech companies such as Square and Stripe have rapidly building POS terminal and merchant acquisition franchises.
His departure also comes at a steep personal cost; Chapman has almost $4 million in long-term stock and option awards granted in the last three years, according to Diebold proxy statements filed in March 2018.