Execs Stream Out of Symantec - TheStreet

Execs Stream Out of Symantec

Jeremy Burton is the latest to leave the IT security software company.
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Symantec's

(SYMC) - Get Report

revolving door at the top continues to spin.

Yet another senior executive will leave the IT security company next month, bringing to five the total number of senior managers that have quit in the last two years.

Jeremy Burton, group president of the security and data management group at Symantec is the latest to depart. He submitted his resignation, effective Mar. 2, and will be heading out to pursue a role as CEO at another technology company, Serena Software.

For Burton, who nursed CEO ambitions, this may have seemed like the right time to seize his opportunity. But taken in context with other exits, the desertions could be troubling for Symantec's shareholders.

Symantec needs to make the Veritas merger work, and Burton as a former Veritas executive was a key link to the past.

In the bigger picture, when a stream of senior executives leaves for better opportunities, it could mean the company is either unable to retain talent -- or worse -- that top management doesn't want to stick around.

Last year alone the Cupertino, Calif.-based Symantec replaced its chief technology officer, chief information officer and chief financial officer.

"There have certainly been more than a couple of people at senior levels who have left the company recently," says Frederick Ziegel, an analyst with Soleil-Mackinac Research, which does not own shares or have an investment banking relationship with Symantec.

Shares of Symantec closed Wednesday's regular session up 36 cents, or 2.2%, to $17.10. The company's stock has been down 19% in the three months since Nov. 27 and down 2.4% in a year.

Symantec saw the first of the many high-profile executive departures not long after Symantec bought Veritas for $10.25 billion in 2005. In September 2005, former President and COO John Schwarz left to become CEO of

Business Objects

(BOBJ)

.

Two months later, in November, longtime Symantec CFO Greg Myers decided to move on. He was followed by former CEO Gary Bloom, who had joined Symantec after the acquisition. Bloom announced his departure in January last year and stepped down in March 2006, about the same time that Symantec decided to get a new chief information officer to replace Mark Egan.

With Bloom's leaving, the door at the top seemed to have opened wider. Chief Technology Officer Ajei Gopal left for

CA

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in August, and now Burton is bidding the company adieu.

Burton's security and data management group contributed 39% of total revenue in the third quarter ended Dec. 29 and grew 7% over the previous quarter and 3% year on year.

More importantly, Burton was an important connection to Symantec's Veritas acquisition. Burton came to Symantec through Veritas, where he was executive vice president of the data management group and served as the chief marketing officer.

That acquisition hasn't gone down well with shareholders, many of whom have questioned the

value the Veritas merger has brought to the company. Shares of Symantec traded at $32 on Dec. 7, 2004, a week before the Veritas deal was announced. A week after the merger was disclosed, the stock was down to $25, and it has never recovered since.

Burton must have felt some of the pressure to make the Veritas merger work and integrate the different parts quickly, says Ziegel.

Burton may not be the last to leave the company. The poor performance of Symantec's data center management business has turned up the heat on division president Kris Hagerman.

Growth in data center management products that contributed 26% of overall revenue in the third quarter remained flat quarter on year and declined 8% year on year.

Data center management has been under pressure partly because of the consolidation in the business, says Ziegel. Still, Hagerman will have to turnaround that business soon.

"Sometimes it is difficult to separate the overall market environment from the individual," says Ziegel. "But what is clear is that Symantec can't continue to support the kind of numbers it has been reporting."

Burton's departure also overshadows some of the good news to come out of the company recently. On Monday, Symantec finally

released Norton 360, a security product targeted at consumers and in direct competition with

Microsoft's

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Windows OneCare.

And last month, Symantec released a comprehensive

data-leak prevention product that could put it ahead of competitors.

What could be heartening to shareholders, though, is that many of the exited executives have done so for the opportunity to head a company elsewhere.

Current Symantec CEO John Thompson "isn't going anywhere," says Mike Rothman, an analyst with independent industry research and consulting firm Security Incite, "and for guys like Jeremy or John Schwarz, it is difficult to turn down a chance to play CEO elsewhere."