Dell CFO Steps Down After 18 Months of Financial Triage

Brian T. Gladden, chief executive of SABIC Innovative Plastics Holding, formerly called "GE Plastics," will join Dell on Tuesday and succeed Carty as CFO on June 13.

Dell, which has fallen behind Hewlett-Packard (NYSE: HPQ) in shipments of personal computers, is expanding beyond its phone and Internet sales to include selling machines through retailers, and is pushing to expand in emerging markets such as China. The company has also been cutting jobs and closing some call centers.

Carty Not Pushed, Says Dell

Gladden, 43, said he was "excited to be joining Dell at a time of transformation." He held a series of financial and management jobs at GE and has served as president and CEO of SABIC, which makes polymers used by electronics, office equipment, computer and auto manufacturers, since that company was spun off from GE last August.

Dell will pay Gladden a US$700,000 annual base salary and a minimum target bonus of the same amount next March, plus a $2 million signing bonus, 223,000 restricted shares of stock and options on 922,000 shares, according to a company filing with the Securities and Exchange Commission.

Dell spokesperson David Frink said Carty, 61, was not pushed out. He said Carty indicated several months ago that he wanted to retire as CFO, and the company hired the executive search firm of Heidrick & Struggles, which brought Gladden to Dell's attention.

Carty will remain on Dell's board.

Cleaning Up a Mess

Carty was CEO and chairman of American Airlines and its parent, AMR, until being ousted in early 2003 during a fight with labor unions over secret pension perks paid to senior executives. He has been a Dell director since 1992, and joined the company as CFO on Jan. 1, 2007.

In a statement, Chairman and CEO Michael Dell said Carty played a key role in re-establishing the transparency and integrity of Dell's finances.

Carty replaced James M. Schneider as CFO shortly after the company acknowledged that the Securities and Exchange Commission and a U.S. Attorney in New York launched investigations into accounting issues.

It fell to Carty last year to announce that Dell would restate results from more than four years of results with lower earnings and spent tens of millions on an internal probe which found that employees had misled auditors and manipulated results to meet performance targets.

'Always Seen as Temporary'

"He did the job that he was brought in to do -- things haven't gotten worse, and maybe they've gotten a bit better -- but he was always seen as temporary," said Roger L. Kay, a technology analyst and president of Endpoint Technologies Associates.

There has been no indication whether the SEC has finished its investigation -- an agency spokesperson declined to comment -- but Kay said he believes Carty and Dell effectively put the issue behind them when the company resumed reporting financial results.

Besides Carty, Dell hired top executives from General Motors (NYSE: GM) , HP and other companies, and founder Michael Dell moved back into the CEO's role after the departure of Kevin Rollins in January 2007, as it launched a turnaround effort it called "Dell 2.0."

Shares of Round Rock, Texas-based Dell fell 13 cents to $21.18 in afternoon trading Monday.