When Mike Fister joined Cadence from Intel, there was an air of expectation. One reason was that Fister was an outsider; he might have been an eda tool user, but he hadn’t climbed the greasy executive pole within eda companies. Fister, the thinking went, would bring a new approach.
Four years later, the Fister era is over. Following a ‘mutual agreement’, the company’s president and chief executive has gone. Also gone is Kevin Bushby, who was executive vp for worldwide field operations and regarded as one of Fister’s closest aides.
In place of Fister, the Cadence board has set up an interim office of the chief executive. This comprises Cadence chairman John Shoven, Cadence director Lip-Bu Tan and CFO Kevin Palatnik. Also joining the office as chief of staff is Charlie Huang, senior vp of business development.
The fall out also included the resignation of James Millar, executive vp of the products and technologies organisation, William Porter, chief administrative officer, Smith McKeithen, executive vp of corporate affairs. Cadence says none of these roles will be filled.
Fister had been under pressure from the financial sector recently, with concerns being levelled against the company’s performance. With Q3 results due shortly, Cadence is predicting a loss of around 25cents per share and turnover some $100million less than in Q2.
But what is believed to be a major reason behind Fister’s departure is the failed acquisition of Mentor Graphics. The hostile approach was resisted strongly by Mentor and Fister called things off in August. Was this the ‘final straw’? That’s debatable, but in a recent conference call, an analyst asked Fister directly why he was still in his job.
Where now for Cadence? Top of the list is a new ceo, but how quickly it can recruit a suitably qualified candidate isn’t certain. Gary Smith (www.garysmitheda.com), the renowned eda analyst, noted: “I don’t see a qualified eda insider taking the job … it’s just too risky a career move. That means it will probably be another semiconductor guy.”
Once the ceo is in place, he or she will need to turn things around. Already, rumours circulate that staffing levels may be cut by 25%, along with big cuts in R&D investment.
Smith believes it’s too late to save Cadence as it is today. “Its best bet is to rebuild. That means it will need to shrink and refocus on where its customers are going, rather than try to hang on to its old markets. That will require the combination of a strong leader and someone with good vision – almost always two people – and the vision guy could be the most important. That’s what Fister lost when he got rid of Jim Hogan. Joe Costello [a former Cadence ceo] made the same mistake when he let Joe Solomon go.
“If they just downsize the company without knowing where they are going, or have a fire sale, Cadence will basically just fade away as it falls further and further behind the technology.”
