Updated from 12:54 p.m. EDT
Another probe into past stock-option awards led to the departure of more executives Tuesday, this time at technology-consulting outfit
The biggest casualty was Co-Chairman and Chief Executive Jerry Greenberg, who resigned from the company he co-founded and its board. Interim Chief Financial Officer Susan Cooke has also stepped down.
Executive Vice President Alan Herrick was named president and CEO, and has been appointed to the board. Jeffrey Cunningham, an independent director since 2004, was named chairman.
J. Stuart Moore, a co-founder of Sapient, remains a board member but has elected to give up his position as co-chairman.
Additionally, Joseph Tibbetts Jr., who was most recently CFO of
, will join Sapient as CFO.
Shares of Sapient plummeted 12.5%, or 73 cents, to $5.09 in recent trading.
According to Friedman, Billings, Ramsey analyst Matthew McCormack, "
is another one out of Boston that's having some
management issues, so I don't know if there's something in the water there, or it's the big dig or what."
"Although our previously announced internal investigation into Sapient's stock-based compensation practices is not yet completed, Jerry and the board came to the conclusion that, based on the information gathered to date, it would be in the best interests of the company and our shareholders to accelerate our CEO succession plan," Cunningham said in a statement. "In light of these developments, Sue Cooke, interim CFO, has resigned from the company."
He added that, with the changes, "we continue to have a strong leadership team in place that can focus fully on the business and work with our people around the globe to serve the needs of our clients."
McCormack says the latest news could be the first step in selling the company, with the ex-CEO, who owns 16% of the company, "out of the way."
He said in an interview that offshore IT services powerhouse
or its rival
are potential shoppers. Sapient would "give them a good footprint in the U.S."
McCormack, who has a market perform rating on the stock, said the options investigation will weigh down shares until the probe is complete.
"I think the stock's probably going to trade sideways to down until we get some better clarity," he says.
He called the replacement of the top executives a positive for the consulting firm, "given the company's spotty performance during the past two years. We do believe there could be some additional near-term volatility as the new management sets expectations with investors."
FBR makes a market in Sapient.
Although the options investigation is continuing, Sapient has determined it will need to restate its historical financial results to record noncash charges for compensation expenses.
The amount hasn't been determined.
Sapient expects revenue for the third quarter ended Sept. 30 to be at or above the upper end of its prior guidance of $100 million to $104 million. The company did not provide an EPS estimate.
Because the stock-based compensation review isn't finished, the company doesn't expect to release its quarterly results on Nov. 7, as had been planned.
Thomson First Call had pegged the company to make 4 cents a share on sales of $101.6 million for the quarter.