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ARM Holdings (LSE:ARM) announced this morning that CEO Warren East will be retiring effective 1 July 2013 and will be succeeded by current company president Simon Segars. ARM’s share price stumbled at the opening bell, but was up 4.5 pence (0.5%) to 901.0 by midday.
East blazed the trail for ARM, leading it to the premier position among semiconductor designers worldwide. His 19-year career began in 1994, four years before the company’s admission to the LSE. His first seven years was a fast track to Vice-President of Business Operations, Chief Operating Officer, and ultimately CEO in 2001.
In the announcement, Chairman John Buchanan described how “Warren has transformed ARM during his time as CEO. In 2001 ARM had one processor product line found mainly in mobile phones. Now ARM provides the broadest portfolio of technologies in the industry, used by more than 300 semiconductor customers in nearly 9 billion chips last year. During Warren’s tenure the company has received royalties for over 40 billion ARM-based chips. As CEO he has created a strong platform for growth and consistently created value for shareholders even in a challenging external environment. On behalf of the Board, and the wider ARM team, deep thanks are due to Warren for his passion, service and leadership.
Under East’s leadership the company share price has increased remarkably from 86.0 pence in 2008 to this morning’s 901.0. ARM’s market cap is £12.5 billion, ranking it as the 35th largest company on the FTSE 100 as of yesterday’s close. East admitted that “The timing has caught some by surprise.” It’s actually a breath of fresh air to see a top executive leave at the top of his game and without being haunted by scandal. Take a good look, ladies and gentlemen. This is what success looks like. It’s a shame that East didn’t choose banking as a career. He might have saved at least one UK bank from dishonor and shame.
Segars should be able to settle in to the CEO’s office with one of recent history’s most stable outlooks. Given that many of ARM’s proprietary design projects are long-term and that its pipeline is in excellent shape, Mr. Segars should have rather smooth sailing for more than several years. He will inherit a business that is strong and stable. Warren East has taken the company from a trot to a gallop. All that Segars needs to do is take the reins and hold on. It’s safe to say that, having worked at ARM since he was 23 years old, the 45 year old CEO-elect knows exactly where ARM is headed and how to get it there.
It’s almost ironic that the world’s leading supplier of low power usage chip designs is such a powerful entity itself. As Warren East said, “We’ve built a truly world-leading technology company, and it’s turned into a global phenomenon. Now is the right time to bring in new leadership to push thinking even further forward.”
