US boss takes over as head of Pace

Neil Gaydon
Neil Gaydon
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TV technology company Pace has replaced chief executive Neil Gaydon with its US boss following three profit warnings and a slump in the group’s share price.

Mr Gaydon, who has been at Saltaire-based Pace for the past 16 years, has been replaced by Mike Pulli, president of Pace Ameri-cas.

Pace said Mr Pulli will join the board with immediate effect.

It added that Mr Gaydon had decided to step down “to take some time off and look for a fresh challenge”.

Chairman Allan Leighton, who instigated a strategic review when he arrived six months ago, said: “Neil has been a great servant to the company and I and the group wish him well.

“This is a very amicable decision.”

Mr Gaydon has been credited with transforming Pace from a loss-making company to the world’s biggest set-top box maker, but the company has had a difficult 2011.

The group said it is too early to make any comment about Mr Gaydon’s pay settlement.

He is on a basic annual salary of £500,000, plus pension and benefits.

Mr Leighton said that Mr Pulli has developed a “hugely successful” business for Pace in the Americas.

“His background and gravitas in the industry make him the right leader to succeed Neil and deliver our strategic plan,” he said.

“Mike has been running 75 per cent of the business,” he added.

“The international opportunities outside America are also very big.”

Shares in the group, which have nosedived this year, closed up 4.5 per cent last night, a rise of 3p to 69.75p.

Analyst Jonathan Imlah at Collins Stewart said: “With a new five-year plan in place, it was probably time for the injection of some new blood.

“Mr Pulli has been very successful in the key US market and has plenty of industry experience.

“It will be interesting to see if further changes at the top are forthcoming. It would be a surprise if they weren’t,” he added.

Analysts at Exane said the change in chief executive should be welcomed by investors.

“Mike Pulli developed the Pace business in the US and managed to crack the Cisco-Motorola monopoly,” they said in a note.

“We believe Mr Pulli is well fitted for the job and his appointment will be well taken by investors.”

“Interestingly, finance director Stuart Hall remains in place,” they added.

Mr Pulli will continue to live in Florida with his family, but Pace said he will spend a large amount of time in Saltaire.

Pace added that its headquarters will remain in Yorkshire.

Mike Pulli has spent the past seven years as president of Pace Americas.

As president of Pace Americas, he has overseen the company’s business in the US, Canada and Latin America, leading a team of 1,500.

He is credited with growing the Americas business from £20m to £1.1bn in revenues during his seven years at the top of the business.

The group said Mr Pulli had expanded the Pace Americas customer base from two in 2004, to over 150 in 2011, including Comcast, AT&T and DirecTV.

Pace said that Mr Pulli will be responsible for leading the group’s global strategy, as set out in the group’s strategic review in November. A key part of the review is a reorganisation of the European business.

Pace has not disclosed details about the reorganisation, but the group has been in talks with the French workers’ council.

The strategic review concluded that Pace operates in markets that are growing and profitable, but a sharpened focus is needed.

The group will also develop its software and services offering.

Pace has issued three profits warnings this year due to a range of problems including the severe flooding in Thailand, the Japanese tsunami and a delayed order from a large US customer.

Last month the group warned that the devastating floods in Thailand could cost it up to £32m next year.

Two key suppliers of hard disk drives, Western Digital and Seagate, have been hit hard by the worst floods in Thailand in over 50 years.

Pace said the solution is not as simple as switching supply to another country as Western Digital and Seagate account for 60 to 70 per cent of the global supply of hard disk drives.

Pace is in talks with smaller players in the market, Hitachi and Samsung, to see if they can mop up some of the demand.

Mike Pulli’s CV

Before joining Pace in 2004, Mike Pulli was chief executive of Digital Latin America (DLA), which he founded in March 2000.

DLA is a broadcasting company that serves the Latin American market with over 50 channels of digital programming.

Mr Pulli spent eight years at Motorola in various international senior management positions, including vice president of international operations, vice president and managing director – Latin America, director of wireless products management and director of business planning.

Earlier in his career, he worked in a variety of financial positions at Allied-Signal.