Sykes hands chief executive post to protege

David Grimes takes the helm at a key point in the Tampa company's history. John Sykes will remain as chairman.

By SCOTT BARANCIK

© St. Petersburg Times, published July 28, 2000

TAMPA -- John H. Sykes, founder and chairman of Sykes Enterprises Inc., is finally shedding a title.

Sykes, 64, has handed the role of chief executive to president and protege David L. Grimes, the company said Thursday. Sykes will stay on as chairman.

The winding down of Sykes' involvement has been a matter of speculation almost since he moved his call center operation to Tampa from Charlotte, N.C., in 1993. As recently as late April, Sykes told Wall Street analysts he had no succession plans.

But the company's 1999 annual report to the Securities and Exchange Commission telegraphed Thursday's announcement. Included in the filing is a five-year employment agreement that promises Grimes a sizable salary increase if he is promoted to CEO or chairman.

It's been a quick ascent for Grimes, 52. The Oklahoma City native and Harvard business school alum joined Sykes Enterprises as president in December 1998. Two months later, he tacked on the title of chief operating officer.

Before joining Sykes, Grimes spent 28 years in the telecommunications industry, starting in 1970 as a pay phone coin collector for Southwestern Bell and working his way up to a regional vice president for AT&T in Dallas.

Grimes and Sykes met in the 1980s, when AT&T was providing switching systems for Sykes Enterprises' customer service call centers.

Grimes' promotion comes at a critical juncture for the 23-year-old company, which went public in 1996. Investors have driven its stock price south in the past year or so, largely because of management's miscues on quarterly earnings. The company has missed four of its past five earnings estimates.

Sykes' shares closed down 25 cents Thursday at $13.06, nearly $40 off the 52-week high.

"As a public company CEO, you have to underpromise and overdeliver," said Carla N. Cooper, an analyst with Robert W. Baird & Co. "People will absolutely be looking to David Grimes to deliver on-target, good, clean financial results. If he does that, the market will love it."

How much of a role Sykes will continue to have in operating his company is not entirely clear. He and Grimes declined to take phone calls Thursday.

But what's notable is that Sykes did not relinquish his chairman's cap. And with nearly 42 percent of the company's stock in his name, he probably can wield as much power as he likes.

"He's still going to be very involved here," Sykes Enterprises community affairs director Conway Jensen said. "I don't think that's going to change."

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