Though it was a typically gray, wet, and dreary day in his hometown of Seattle, Nov. 3 was anything but usual for Greg Maffei, who is stepping down as chief financial officer and co-president of software giant Oracle (ORCL).
Rumors swirled throughout the day about Maffei's status after he skipped recent analyst meetings. Goldman Sachs analyst Rick Sherlund had stirred the pot by issuing a research note that cast doubt on Maffei's future with the company.
After the close of stock market trading, Oracle made it official: Maffei would be stepping down on Nov. 15 after less than five months on the job, and Oracle Co-President Safra Catz would replace him as CFO -- the fourth to hold that position in two years. "Greg has told us he's looking at a terrific professional opportunity," said Oracle CEO Larry Ellison. "We wish him well."
BEING CEO IS "MORE FUN". When the ambitious software executive left Microsoft (MFST) in 1999, he became CEO of 360networks. He assumed the role of Oracle's finance chief in June. According to people who know Maffei, he joined with hopes that it would provide another shot at being CEO on a much bigger stage. "He came thinking he might throw his hat in the ring for Larry's successor," says an Oracle exec who asked to remain anonymous.
It became increasingly clear that there was stiff competition for that job, and that Maffei wasn't the front-runner. "It wasn't going to happen at Oracle," the exec says. The point was pushed home in September when Ellison said in an interview with Bloomberg that if he were to drop dead tomorrow, Catz would be his natural successor.
In an interview with BusinessWeek Online, Maffei downplays the role the slight played in his departure, saying, "Human nature being what it is, would you rather be mentioned? You bet. But it's not the be all and end all." When pressed, he conceded that while he enjoyed being co-president, "it's even more fun to be CEO."
STRONG PERSONALITIES. It didn't help Maffei's chances of an extended tenure at Oracle that he clashed with Catz, say people familiar with the matter. Maffei declined to comment on his relationship with Catz. Meantime, her place in line appears all the more secure. When previous CFO Harry You left earlier in the year, Catz served as interim CFO. This time, her role is permanent, according to the company.
Someone close to the matter said Ellison made the call because he is very close to Catz and didn't want to go through another search and CFO transition. Catz, a former investment banker who played an integral role in Oracle's recent acquisition spree, also has a little more room on her plate, now that the company isn't planning more large deals. When Maffei was brought on board, Oracle played up his experience as a dealmaker. As it turned out, those talents were never used.
Once the uncertainty cleared, Wall Street seemed to shrug at the news. The stock closed at $12.20, falling 2.2%. But it rose in extended trading. Some analysts were concerned that the strong personalities of Ellison and Catz apparently drove out another talented executive.
CHEAP BICYCLE. Yet a structure that included three co-presidents -- Maffei, Catz, and Charles Phillips -- seemed untenable. "It was another person competing with Chuck and Safra for Larry's attention," says Bruce Richardson, head analyst at market research firm AMR Research. "A team can only afford to have so many 20-game winners on its staff."
What's more, Oracle's chairman is former longtime CFO Jeff Henley, and Phillips is a former analyst. With Catz's banking background, there may not have been room for still more in-house financial expertise at the executive level.
The smaller, more cohesive executive team lessens the likelihood of boardroom dustups at a crucial juncture when Oracle needs to knit together the spoils of a $19 billion shopping spree. "I really don't think [it's a problem]," says Pat Walravens of JMP Securities. "These guys close their books and get their numbers faster than any other company I cover."
But undoubtedly, Oracle has lost something with Maffei's departure. The Silicon Valley outsider was seen as a potential change agent. Right outside Oracle's gleaming emerald-colored headquarters in Redwood City, Calif., the row of executive parking often sports Ellison's Bentley and Phillips' Jaguar. In between: a cheap bicycle used by Maffei, who rides from his nearby hotel to the office since he doesn't own a car in California (he commutes from Seattle during the week). Come mid-November, that bike will be gone, and, not long afterward, Maffei will once again have the corner office -- somewhere else.