Unisys CEO resigns
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Ailing systems integrator, under pressure from activist shareholders, begins search for a new leader
Joseph McGrath, CEO of veteran IT services provider and systems integrator Unisys, is to resign at the end of this year, the company announced yesterday.
The company is currently under attack from an activist shareholder firm MMI Investments, which wants Unisys to spin out its government outsourcing division as a new company.
In January 2008, the firm – which is the third largest shareholder in Unisys – wrote a letter to the company’s board of directors saying it was “mystified by management and the board's inaction in the face of Unisys' ruinous stock price performance over the past year.”
In May, two candidates put forward by MMI Investments were appointed to the board of directors, including the fund’s president Clay B Lifflander.
The company has seen a gradual decline in revenues in recent years. In its most recent financial report, quarterly revenues were down 3% to $1.34 billion. Reduced spending in the financial services sector and delayed government projects were among the reasons given.
McGrath, who has been CEO since 2005, will continue to run the company until a successor is found. His departure would "best enable Unisys to move forward on accelerating execution of the company's strategy," a company statement said.
The company’s stock price rose by 2% following the announcement.
Unisys was created in 1986 following the merger of two mainframe-manufacturing companies Sperry Corporation and Burroughs Corporation. The latter company was founded by William S Burroughs, grandfather of the author of the same name.
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