EBay hires dot-com veteran as CFO
Bob Swan replaces Rajiv Dutta, who is moving to Europe to become president of Skype.india Updated: Feb 22, 2006 13:00 IST
EBay Inc on Tuesday named Electronic Data Systems Corp Chief Financial Officer Bob Swan, a dot-com refugee who was once a top executive at bankrupt online grocer Webvan, as CFO.
Swan replaces Rajiv Dutta, who is moving to Europe to become president of Skype, eBay's recently acquired Web phone-calling business.
Swan takes over as CFO at the San Jose, California-based company on March 16.
Near the peak of the dot-com frenzy in October 1999, Swan joined Webvan, where he was chief financial officer, chief operating officer and chief executive for about 18 months. Webvan filed for bankruptcy protection in mid-2001.
Goldman Sachs analyst Anthony Noto said in a note to clients that Swan was an "excellent choice," crediting him as the chief architect of a recent turnaround at Electronic Data Systems Corp and for solid leadership at Webvan.
"During the failure of Webvan, Mr Swan, in our view, displayed the utmost professionalism and financial acumen, while also portraying strong leadership ability upon the departure of the CEO," Noto said.
EBay's top executives stand out from other major Internet companies in the breadth of their corporate experience as opposed to their technology or entrepreneurial credentials.
Separately, EDS said it named two interim co-chief financial officers, effective March 15 Tom Haubenstricker has worked for the company for 21 years, while Ron Vargo was hired in 2004 after working for what became TRW Automotive Holdings Corp and for General Electric Co.
Swan joined EDS three years ago, part of a new executive team that was charged with turning around the troubled computer services company, which has revenue of more than $20 billion and 117,000 employees.
"I thought it was going to be the hardest job in the world," Swan said during an EDS meeting with Wall Street analysts on Tuesday in New York. "On that point ... it really hasn't disappointed," he said.
Following the detour at Silicon Valley-based Webvan Group Inc. and before joining EDS, Swan was CFO and executive vice president at TRW. Swan began his career with GE in 1985 and spent 15 years in a variety of positions.
After bursting on the scene in the middle of 1999, Webvan burned through more than $1 billion in cash it raised with the backing of Goldman Sachs and Sequoia Capital, among others. It attracted corporate heavyweights such as former Andersen Consulting chief George Shaheen as its first CEO.
The heavy spending to create these online supermarkets depended on a rapid shift in purchasing habits by customers for food and other household goods that failed to materialize.
"We made the assumption that capital was endless and demand was endless," Swan told Business Week in June 2001, a month before the company declared bankruptcy.
In a regulatory filing, eBay said it had made an offer to Swan on February 10, which was executed on February 18. Swan will be paid an annual base salary of $600,000, and be eligible for an annual bonus of 85 per cent of his base salary, it said.
He will also be eligible for a special retention bonus of up to $1 million of which $200,000 will be payable within two payroll periods of his commencement of employment, and the remaining $800,000 to be paid in installments on the anniversary of his hiring over the next four years.
EBay also agreed to help defray Swan's relocation expenses from Plano, Texas to the San Francisco Bay Area.
Shares of eBay closed down 51 cents, or 1.2 per cent at $40.80 on Tuesday on Nasdaq amid a broad decline in US shares.