Staples Founder Steps Down As Chairman
Friday, March 11th 2005, 10:50 am
News On 6
BOSTON (AP) _ Staples Inc. founder Thomas G. Stemberg resigned as chairman of the world's largest office products retailer and will be replaced as the board's leader by Ron Sargent, who took over from Stemberg as chief executive three years ago.
Sargent's election as chairman of the board was announced Friday, the morning after Stemberg's resignation was disclosed in a one-sentence statement issued after business hours. Friday's announcement of Sargent's additional title said Stemberg will become chairman emeritus.
Staples spokesman Paul Capelli said Stemberg will continue to serve as a consultant to Staples through next January, but will no longer have formal board duties.
Staples shares rose 16 cents to $32.80 in morning trading on the Nasdaq Stock Market, where its shares have ranged between $23.69 and $33.88 over the past year.
The moves came after Stemberg last month joined a Lexington-based venture capital firm, Highland Capital Partners, saying he always liked working with smaller companies.
In a statement issued by Staples, the 56-year-old Stemberg said Friday, ``As I look to new ventures, the time is right for me to move on and for Ron to assume the role of chairman.''
After 19 years at Staples, Stemberg said he is leaving at a time when the company is ``a market leader that is positioned for continued growth.''
Sargent, 49, who also holds the title of president, said he ``will continue to embrace his (Stemberg's) vision and his legacy.''
Separately, Framingham-based Staples disclosed in a regulatory filing Thursday that its board's compensation committee authorized a $1.73 million cash bonus to Sargent for the 2004 fiscal year. Staples also said the committee awarded a total of $2 million cash bonuses to four other executives for the year ended Jan. 29.
Thursday's news release said only that Stemberg ``resigned,'' while a Securities and Exchange Commission filing added that the resignation was ``voluntary.''
Stemberg had been chairman since 1988, two years after he founded what is now the world's largest seller of office products with $14.4 billion in 2004 sales, 1,680 stores and 65,000 employees.
Staples, with competitors including Office Depot Inc. and OfficeMax Inc., opened its first store in May 1986 in Boston's Brighton neighborhood. Stemberg served as chief executive from the company's inception until February 2002, when Sargent, then president and chief operating officer, was promoted to the top job. At the time, Stemberg said he planned to remain active in the company's management.
Stemberg founded Staples after leaving positions at Jewel's Star Market Stores and at First National Supermarkets.
He started Staples with help from venture capital, including an investment by Bain Capital, the firm that current Massachusetts Gov. Mitt Romney headed from 1990 to 1999.
Stemberg took his company public in 1989. But after years of explosive growth, Staples' profits shrank early this decade amid an economic slowdown.
The company has enjoyed a resurgence under Sargent, and until last quarter had recorded 12 straight quarters with earnings growth of at least 20 percent or more.
Stemberg remains a board member with CarMax Inc., PetSmart Inc., Polycom Inc. and The Nasdaq Stock Market, Inc.