Striking the wrong chord…

August 23, 2006

speakers.jpegAudio electronics marker Harman International (HAR) blew a speaker yesterday when it announced the resignation of CEO Doug Pertz.  Pertz, who was just hired at the end of April, is leaving immediately, marking an abrupt end to his brief tenure.  As Forbes noted, however, it wasn’t exactly perfect harmony from the beginning, given Pertz’s lack of relevant industry experience.  Pertz, however, is singing a sweet tune. 

How come?  In the 8-K Harman filed late yesterday to announce the CEO change, it noted that Pertz is walking away with a severance payment of $3.8 million.  That works out to about $48,000 a day for Pertz’s four months of work!  The musical chairs certainly didn’t sit well with shareholders, who now have to bear the cost of signing yet another CEO.  After all, compensation consultants aren’t cheap. Ditto for executive search firms. Investors responded to the resignation by pushing the stock down 4% yesterday, erasing all of the week’s gains.

P.S.: This post was brought to you by Abe and Keith, two geniuses at the Apple (APPL) store in the Palisades Mall. I spent a few hours there yesterday afternoon trying to fix a tech problem from hell — the downside of being a sole proprietor is that you can’t simply call tech support — and both of these guys were terrific. Many thanks!

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