David Swanson, who transformed the Cary company now called Dex One into a powerhouse in the yellow pages industry - but who also was responsible for the missteps that led it into bankruptcy - is retiring.
Swanson's retirement from the company, effective Friday, follows its restructuring and emergence from bankruptcy in January. The retirement announcement came as a surprise, raising questions about whether the 55-year-old Swanson, CEO for the past eight years, was pushed out by the company's newly formed board of directors.
But board member W. Kirk Liddell said the decision was Swanson's.
"His assessment was the timing was right," Liddell said. "... I'm sure, from your position, it seems like this is a sudden, secret decision. [But] we've been working with Dave behind the scenes to make sure this was a really comfortable situation for everybody.
"We have a lot of respect for Dave and what he has brought to this business," Liddell added. "He deserves a lot of credit for where Dex One is today."
Swanson wasn't available for comment. As part of the restructuring, the business also dropped the name R.H. Donnelley and became Dex.
With the departure of Swanson, Dex will be run on an interim basis by a triumvirate of board members named to an executive oversight committee, including Liddell. All are new directors who joined the board in January.
No timetable has been set for naming Swanson's successor.
"We're looking for a CEO who is going to take this organization, which we think is extremely well-positioned for success in many dimensions, and take it to the next level," Liddell said.
Dex has 3,400 employees, including about 450 in the Triangle, and publishes yellow pages directories in 28 states. Revenue totaled $2.20 billion last year, down from $2.62 billion in 2008.
Shares of Dex have slid 33 percent since its first day of trading Feb. 1, after it emerged from bankruptcy. Shares on Friday closed at $22.37, down 76 cents.
Swanson orchestrated the 2003 decision to shift the company's headquarters to the Triangle from Purchase, N.Y., a move influenced by a promise of up to $4.3 million in state incentives.
After taking over as CEO in May 2002, Swanson transformed a business that earned commissions by selling ads in yellow pages published by others into a multimedia publisher. It expanded through acquisitions, notably the $4.2 billion purchase of Colorado-based Dex Media, to make it the No. 3 yellow pages publisher.
That strategy was built on a foundation of debt, which crumbled when the recession prompted companies to rein in their advertising budgets - especially the small businesses that yellow pages publishers rely on. Dex's debt exceeded $9 billion when it filed for bankruptcy 12 months ago.
Although Swanson's strategy backfired, "at the time they were pretty rational decisions," said Charles Laughlin, an analyst with market research firm BIA/Kelsey. "It's easy to criticize in hindsight."
Still, the company's largest shareholder complained last year that Swanson shouldn't remain in charge. "I don't think management should be rewarded for bankrupting the company," Thomas Ryan, CEO of Doddsville Investments of South Miami, said at the time.
No college degree
Swanson joined the company as an account executive who sold advertising in 1985 and rose to the top even though he never finished college.
The lack of a degree embarrassed the company a few years ago, when Dex admitted it had erroneously overstated Swanson's academic accomplishments by crediting him with a bachelor's degree from St. Cloud State University in Minnesota. Swanson attended St. Cloud from 1973 to 1976, but he didn't graduate.
Swanson's original employment application to the company accurately portrayed his academic record, according to the company, which was at a loss to explain how the wrong information appeared in two news releases.
Swanson has been handsomely rewarded at Dex. In 2008 his total compensation was valued at $8.7 million.
Although the company is in better shape post-bankruptcy after trimming more than $6 billion in debt, the next CEO will have to navigate a landscape in which print yellow pages is declining at the same time that the competition in the digital arena is formidable, Laughlin said.
Dex has been diversifying beyond print and today sells ads in other media, such as online and mobile, as well as helping companies enhance their Internet presence by, for example, boosting their rankings on Web searches. But the bulk of its revenue still comes from its printed yellow pages.
Board member Alan F. Schultz, CEO of Michigan-based Valassis Communications, which produces newspaper inserts and distributes coupons, has been named chairman of the board.
