Gateway CEO Inouye resigns; Chairman Snyder named interim CEO
SAN DIEGO ” Wayne Inouye, the chief executive who refocused Gateway Inc. on personal computer sales, is resigning and will be temporarily replaced by Chairman Rick Snyder, the company said Thursday.
Inouye, who became CEO after Gateway’s acquisition of eMachines Inc. in 2004, left “to pursue other interests,” in the company’s words. Gateway declined to elaborate, and Inouye did not return a call to his office.
Snyder, 47, was Gateway’s president and chief operating officer in 1996 and 1997, before the company became an also-ran against Dell Inc. and Hewlett-Packard Co.
Inouye, a former Best Buy Co. executive who revived eMachines, slashed jobs at Gateway and retreated from an ill-fated push into consumer electronics. He immediately closed Gateway’s stores and began selling the company’s gear at Best Buy and other electronics stores.
The Irvine, Calif.-based company swung to a profit after three straight years of losses.
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Snyder praised Inouye for his work on the retail side but said Gateway struggled to sell PCs to businesses and through direct channels such as the phone and the Internet.
“It’s clear that there are a lot of positives that have gone on with the company and there are challenges,” Snyder said in a conference call with financial analysts and reporters.
Last week, Gateway reported fourth-quarter profit dropped 76 percent to $22.4 million, down from $93.9 million during the same period last year. Revenue grew 9 percent to $1.12 billion from $1.03 billion.
Inouye’s resignation, which took effect Wednesday, followed several days of “constructive dialogue” with the board of directors, Snyder said. “Basically, (Inouye) made the call,” he said.
Inouye’s severance package includes a cash payment of $720,000, or one year base salary, and health insurance for three years, according to a filing with the Securities and Exchange Commission. Gateway said Inouye will serve in an advisory role to ensure a smooth transition.
Snyder deflected questions about whether he would consider taking the CEO job permanently, a decision that would likely require him to move from Ann Arbor, Mich.
Snyder said there were no other senior-level resignations and denied there would be a bigger role for Ted Waitt, who founded Gateway in 1985 and guided it to its glory days as one of the largest PC makers in the United States.
Snyder denied that Gateway was for sale, even after one caller urged him to consider the idea.
“I appreciate your thoughts,” Snyder said. “Everybody has an obligation to look through the options … As a practical matter, we’ll continue to operate in a normal fashion.”
Gateway shares fell 8 cents to $2.43 in afternoon trading on the New York Stock Exchange, where they have traded between $2.35 and $4.78 over the last year.