It came down to timing.
Aliso Viejo-based QLogic Corp.’s former president and chief operating officer Jeff Benck stepped down abruptly on March 14 over a big sticking point,when he’d become chief executive.
Talks between Benck, Chief Executive H.K. Desai and QLogic’s board broke down and Benck resigned, according to a source familiar with the company.
“He came in as the heir apparent, but it wasn’t clear when he’d take over,” the source said. “Jeff wants to be a CEO.”
There may have been some disagreement about the timeline of the succession plan that was put in place by Desai at the board’s request.
“Either he is sensing that he is not going to be the CEO any time soon or he could be sensing that the company’s direction isn’t strategically going anywhere,” said one analyst who asked not to be named.
QLogic didn’t give a reason for Benck’s resignation, which came as a surprise.
A company official did say it “had nothing to do with the performance of the company.”
Benck declined to talk about his departure. He did say he plans to stay in Orange County.
QLogic, which sells data storage networking chips, circuit boards and switches to big server makers, has seen its stock slump some 10% in the past year. It had a recent market value of about $2 billion.
Benck was hand-picked last year by Desai after a search that lasted more than a year.
The two had known each other for nearly a decade during Benck’s tenure at IBM Corp.
Big Blue is a major QLogic customer.
Benck was hired last April and had a one-year contract that started in May.
He took on the everyday tasks of running the business and managed manufacturing, product development, sales and marketing.
Desai remained chief executive and chairman and focused on overall strategy and managing customer relationships.
Benck also helped to revamp QLogic’s brand by refining its mission statement and making its Web site easier for customers to navigate.
Good Relationship
Desai and Benck appeared to have a good rapport and a mentoring type of relationship, according to company watchers.
The two worked closely together. Desai said last year that Benck “clicked” right away with the board. Wall Street seemed mystified by the sudden departure.
“Jeff was sharp, pretty engaged and was the face to Wall Street. I don’t get the sense that Jeff was incompetent. There must have been serious disagreements between him and Desai,” one analyst said.
Others suspected a fundamental parting of ways.
“We suspect there was likely a disagreement about the timing of Mr. Benck’s succession to the CEO role,” Jayson Noland, an analyst with Robert W. Baird, said in a research note.
Benck came to QLogic after a nearly 20-year career at IBM in Research Triangle, N.C.
He most recently headed the group that develops IBM’s server and storage products with about 1,400 workers under him.
Benck relocated to OC with his family, including two young daughters.
Desai is set to take over Benck’s duties in the interim.
The company has started looking for a replacement.
Word is that a QLogic vice president could get a nod for the post.
A likely candidate is Roger Klein, general manager of QLogic’s host solutions group. Klein heads one of the biggest parts of the company’s business, selling host bus adapter cards, a profitable bit of electronics that help speed the flow of data on a network.
Klein joined the company in 2001.
Some doubt that Desai, 62, will give up the top post right away.
He led the spinoff of QLogic from Costa Mesa’s Emulex Corp. in 1994 and has been running the company solo for 14 years.
“He likes to have strong control, so it’s unlikely he’s going to give up total control to someone else any time soon,” one analyst said.
Desai has been evasive about saying when he’s set to retire.
Right now QLogic is focusing on filling another big post,chief financial officer.
Former Chief Financial Officer Tony Massetti stepped down a few months ago and his spot has yet to be filled.
