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Sun's Zander to step down

The computer maker says that Ed Zander, its president and chief operating officer, will retire this summer. It's the latest executive change in a recent flurry of shifts and departures.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
3 min read
Sun Microsystems said Wednesday that Ed Zander, its president and chief operating officer, would retire this summer, the latest in a string of recent executive changes at the company.

Zander, 55, will step down on July 1. Sun CEO Scott McNealy will take on Zander's duties, and a replacement will not be named. Zander will stay on to assist McNealy with the transition, among other things, for the rest of the calendar year, the company said.

"He's got a lot of work to do before I give him his Swatch," McNealy said in a conference call, alluding to the corporate cliche of presenting a retiree with a gold watch.

The news comes as a surprise since Zander, along with McNealy, was among the most visible executives at Sun. Zander worked at the company for more than 15 years.

"What can I say but thanks to just an awesome effort by Eddie over all of these years," McNealy said in the call with analysts and reporters on Wednesday morning.

Investors weren't as upbeat about the news. Sun's stock took a beating Wednesday, dropping $1.21, or about 15 percent, to $6.97, a new 52-week low. A little less than a year ago, the stock peaked at more than $22, but it has been on a downswing since the end of 2001, when it ranged between about $12 and $14 per share.

With the news of his imminent departure, Zander has been swept up in a flurry of spring cleaning in Sun's executive offices, which are seeing a number of people either leaving the company or moving to new positions. The company has said that the several months leading up to the start of a new fiscal year in July is a time that it traditionally makes a round of organizational changes.

Earlier this week, the company announced an organizational shuffle that included the retirement of Larry Hambly, 55, as executive vice president of enterprise services. At the same time, Sun shuffled other executives as it expanded its software division and added a new marketing and business development organization.

Hambly was the third top-level retirement Sun announced in April. Chief Financial Officer Mike Lehman, 51, will be replaced by Steve McGowan, 53. Also retiring is John Shoemaker, 59-year-old executive vice president of computer systems, who won't have a replacement.

The changes, McNealy said, are part of an overall plan to bring the company back to profitability after the economic slump of 2001. He parried the question of whether more retirements would come between now and July 1.

Meanwhile, Sun is aiming for a smooth transition as the executives depart.

"I asked Mike Lehman, for example, to stay on a little longer than he might have wanted to," McNealy said.

Although the July 1 transition might seem abrupt, Zander said in the conference call, it has been a year in the making.

"I felt I wanted to help Sun get though what I thought was going to be a difficult year," he said. "I'm excited. I think we've got some great people in Sun...the making of a good management team."

Citing the company's new server product offerings, Zander said, "I think Sun is in the best shape it's been in in years."

As president and COO, Zander ran the company's day-to-day business operations, overseeing work on products ranging from servers to software and storage, along with e-commerce efforts. Earlier, he had variously headed Sun's computer systems business, software division and marketing operations. Before joining Sun, he had held management positions at Apollo, Data General and Raytheon.