Blackbaud CEO Marc Chardon is stepping down
A week and a day after CEO Marc Chardon announced 150 layoffs at Blackbaud, the Daniel Island-based software company announced that Chardon’s days there also are numbered.
Chardon, who has led Charleston’s biggest technology company and the region’s biggest publicly traded business since 2005, will leave at the end of the year or when his successor is named, whichever comes first, the company said Wednesday.
The move comes in the wake of the company’s worse-than-expected financial performance since acquiring former Texas rival Convio last year and as Blackbaud is transitioning its business — making fundraising software for nonprofits — amid a recovering economy.
Buying Convio had been part of Chardon’s plan to make Blackbaud a billion-dollar company in terms of annual revenue. It has not gone as smoothly as hoped, but company spokeswoman Melanie Mathos said Chardon’s departure “has nothing to do with the Convio acquisition.”
“It’s really just a shift of where the company is and where it’s going,” Mathos said.
Chardon, 57, held a company-wide meeting Wednesday and took questions from employees, Mathos said, but he was not available to comment. In a statement, he said leading the company had been “an honor.”
“Now is the right time to select a new leader for the next phase of the company’s development and growth,” Chardon said.
He said he will work with the board to help identify the best CEO candidate “and to ensure that this transition is seamless for all of our stakeholders.”
“I am confident that, when the time comes, I will leave the company in excellent hands with a strong team that will continue to succeed and build on the important progress we have made,” Chardon said.
Chardon plans to pursue business interests advising and investing in technology start-ups and devoting more time to the philanthropic community, according to Blackbaud’s announcement.
He will receive two years’ base salary among other “separation benefits,” according to a Wednesday filing with the U.S. Securities and Exchange Commission.
Andrew Leitch, chairman of Blackbaud’s board, said Chardon had “successfully led the company through a significant transformation” and “nearly tripled” revenues over his seven-year tenure.
Matthew Kempler, an analyst at Sidoti & Co. who tracks Blackbaud, said he was surprised by the announcement, though in hindsight Chardon’s one-year contract extension in November was a hint. He said Chardon’s departure is less about the company’s recent financial performance and more about its long-term future.
“I’m not going to argue that 2012 wasn’t a tough year for Blackbaud,” Kempler said. “But at the same time I think there’s been an expectation that we were going to have to transition toward a (software services) business and do a bit more (product) integration on the back end.”
Blackbaud will retain an executive search firm to pick its next president and CEO from a pool expected to include internal and external candidates. Mathos said the search could take “quarters.”
It wasn’t clear Wednesday whether Chardon will remain in the Lowcountry, but George Stevens, president and CEO of the Coastal Community Foundation, many of whose grantees use Blackbaud’s software, hopes he will stick around.
“He really got involved in the community, not in a showy way but in a strategic way ... in a change-agent way,” Stevens said of Chardon, whom he has known for six years.
Founded in New York more than three decades ago, Blackbaud moved to Charleston in 1989 and went public in 2004. Chardon joined the company in November 2005 after serving as CFO of Microsoft’s Information Worker business group and as general manager of the computer giant’s operation in France.
Fueled by acquisitions of companies from Indianapolis to Australia under Chardon, Blackbaud has grown into a giant of its own. Even after the most recent job cuts take effect at the end of the month, the company will have about 2,600 employees, with approximately 1,150 on Daniel Island.
The most recent acquisition, the $325 million Convio deal, was its biggest yet — a major strategic play by Chardon.
Announced a year ago, it was seen by some as Blackbaud’s bid to consolidate control of the market. A protracted U.S. Department of Justice antitrust review postponed the deal’s consummation until May, a costly few months of limbo for both companies.
Fitting together the two companies’ people and products was a formidable task.
In late August, the company eliminated 51 positions, announced it would discontinue Convio’s Common Ground product and announced Convio’s former CEO would not stay with the combined company.
During a quarterly earnings call in early August, Blackbaud executives said they were aiming for a 20 percent profit margin, but the company’s third-quarter earnings report in November fell short of expectations.
The shortfall was blamed on costs related to the Convio acquisition, “execution” issues within the Blackbaud’s services business and sales-force disruptions in the July-September period.
Blackbaud trimmed its sales forecast for the year by 2 percent, projecting that the figure will now come in between $451 million and $453 million. Chardon had repeatedly said his goal was to more than double Blackbaud’s annual revenues to $1 billion, but now that won’t happen with him at the helm.
On Jan. 15, the company announced the latest round of position eliminations, this time putting 150 people, including 50 at the local headquarters, out of a job.
While the company’s stock bounced on the news, Chardon called it “a sad day for Blackbaud.”
Among the reasons for the cuts, according to an internal document, were the company’s “recent financial performance (slow growth of revenue and bookings),” including Convio’s disappointing performance last year, and the “continued (and likely continuing) slow economy.”
The cuts were spread across departments and the company’s American offices, though only “a handful” of positions were cut at the former Convio headquarters in Austin, according to Karoline McLaughlin, another company spokeswoman.
Blackbaud is still hiring and forecasts growth in both its international and online fundraising businesses. Blackbaud is also releasing new ticketing software this week, according to Mathos, the subject of the company’s curious “Something big is coming tomorrow!” tweet on Tuesday.
But the problems remain, and the upcoming leadership change provides a fresh challenge.
Blackbaud also announced Wednesday that it will report its fourth-quarter and full-year 2012 financial results on the morning of Feb. 13. The company said it expects to meet or exceed revenue and earnings targets for the fourth quarter, but after Wednesday’s announcement, investors will be listening to Chardon and Chief Financial Officer Anthony Boor’s words as much as to the latest numbers.
Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_brendan.