Takeover Target PeopleSoft Announces Exec Reshuffle

October 1, 2004 (PLANSPONSOR.com) - The Board of Directors of PeopleSoft Inc., makers of widely used HR software, have sacked president and chief executive Craig Conway because of a "loss of confidence in Mr. Conway's ability to continue to lead the company."

The abrupt move, announced in a  statement on the Pleasanton, California company’s Web site, comes as PeopleSoft is fighting off a hostile takeover bid from Oracle Corp., and has maintained that Oracle’s bid is inadequate.

According to the PeopleSoft statement, the board tapped founder and chairman Dave Duffield as the new CEO. Directors also appointed Kevin Parker and Phil Wilmington as co-presidents, and Aneel Bhusri as vice chairman of the board with all moves effective immediately.The company said Parker will be responsible for internal operations and remain chief financial officer, and Wilmington will assume responsibility for worldwide field operations.

“I am excited to be returning to PeopleSoft on a full time basis and look forward to working with our strong, talented senior management team,” said Duffield in a statement. Duffield served as CEO from August 1987 through September 1999 and president from August 1987 through May 1999.

Oracle’s bid for PeopleSoft, unveiled more than a year ago (See  Pac Man Rules Software Makers: Oracle Bids for PeopleSoft ), received a boost last month when a federal judge dismissed antitrust objections raised by the US Justice Department. The Justice Department announced Friday it will stop trying to block the Oracle bid. R. Hewitt Pate, assistant attorney general for the Justice Department’s antitrust division, said the government will not appeal the judge’s decision.

The $7.7-billion Oracle bid has put PeopleSoft under increasing pressure. Recently, the company forged a five-year technology and marketing alliance with International Business Machines Corp., in an indication of how Oracle’s bid for PeopleSoft is reshaping software industry strategies, news reports said. Both PeopleSoft and IBM are eager to thwart Oracle, which competes with both companies.

A PeopleSoft buyout could also impact how some companies treat their HR function with firms now handling their own HR duties on a PeopleSoft platform possibly more willing to outsource if the software maker is taken over.