ARM’s East Retires After 12 Years
Stock Chart for ARM Holdings PLC (ARM)
Warren East, the ARM Holdings Plc (ARM) (ARM) chief executive officer who built the company into a chip-design powerhouse supplying Apple Inc. (AAPL) (AAPL)’s iPhone and iPad, will retire after almost 12 years in the role.
East, 51, will step down July 1 and said on a conference call today he plans to continue working in the technology industry. Succeeding East is President Simon Segars, 45, who has been with ARM since 1991, the Cambridge, England-based company said in a statement.
East helped build ARM into a chip designer benefiting from a surge in demand for mobile phones and tablets, sprinting ahead of rivals such as Intel Corp. The company’s shares have advanced for four straight years, rising 10-fold over that span.
“We’ve built a truly world-leading technology company, and it’s turned into a global phenomenon,” East said on the call. “Now is the right time to bring in new leadership to push thinking even further forward.”
While staying in the industry, East said he’ll probably avoid executive roles in the short term.
ARM shares declined as much as 2.4 percent to 898 pence and fell 2.2 percent at 9:24 a.m. in London. The stock had advanced 20 percent this year through yesterday, giving the company a market value of 12.9 billion pounds ($19 billion).
Timing for a new CEO “is seen as right to carry the company forwards on a 10-15 year horizon,” UBS AG analysts said in a note today. Segars is well-regarded by investors and his appointment wasn’t surprising even as the timing is “slightly earlier that we would have thought,” the analysts said.
Segars, who was chosen for the CEO role from a worldwide search of candidates, will celebrate his 22 years with ARM next week, having held roles in engineering, sales and top management. Segars said on the conference call he’ll “continue with what Warren built and continue to work closely with partners and customers.”
During East’s tenure, ARM’s annual sales expanded to 577 million pounds last year from 146 million pounds in 2001 and operating profit rose to 263 million pounds from 46 million pounds, ARM said. The company is valued at 48 times estimated 2013 earnings, far higher than customers and competitors such as Intel and Apple, according to data compiled by Bloomberg.
So-called embedded processing is ARM’s fastest-growing market, surging 25 percent in 2012. ARM got more than half of its sales from products other than mobile phones for the first time in the third quarter, and East said in January the percentage will continue to rise.
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