Word: kleinfelder
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...before Kleinfeld got a chance to solve the world's troubles, he couldn't adequately solve one massive problem at Siemens. For months now, prosecutors and securities watchdogs in Europe and the U.S. have been investigating current and former Siemens employees, including some senior executives, on various allegations of corruption and foul play. In November, police raided some 30 Siemens offices--Kleinfeld's among them--confiscating documents and detaining several executives in connection with alleged illegal bribes paid to foreign officials to win telecommunications contracts...
...Although Kleinfeld has never been implicated in anything illegal, key directors on the supervisory board that oversees management felt a clean sweep at the top was necessary to restore the company's credibility. Kleinfeld's future took a dismal turn on April 19, when his predecessor and mentor, Heinrich Von Pierer, most recently the chairman of the supervisory board and under whose watch the alleged crimes occurred, resigned under pressure. The board then took off the table discussions to extend Kleinfeld's contract, which is due to expire in September, until it had a better idea of where the investigation...
...loss for Siemens--and bitterly ironic in that Kleinfeld had acted boldly not only in responding to the investigation but also in separating Siemens' culture and strategy from that of Von Pierer's. Kleinfeld appointed the law firm Debevoise & Plimpton LLP to do a complete audit of the company, and another heavyweight, Davis Polk & Wardell, as corporate counsel. He named Daniel Noa, a former German prosecutor, as the company's new chief compliance officer (CCO) and hired Michael Hershman, a former U.S. military intelligence officer and one of the founders of anticorruption watchdog Transparency International, as a compliance consultant...
...Kleinfeld and Hershman met in early December at the Bayerischer Hof Hotel in Munich, where the consultant sized up the Siemens boss. At one point during dinner, Hershman leaned forward and said, "Don't hire me if you've got a problem, because I'm going to find it, and if I feel misled or hindered, I will leave, and that won't be good for your company." Stirring the ice in his Diet Coke, Kleinfeld coolly replied, "I have nothing to hide...
During the first phase of his tenure, Kleinfeld focused on putting out the fires that were burning up the company's earnings. Despite accruing restructuring charges of $1.2 billion, the company managed acquisitions totaling $8.6 billion. In the past year, profits were up 35%, to $3.96 billion, and sales 16%, to about $117 billion. Investors rewarded Kleinfeld's decisiveness. Siemens shares have risen more than 40% since he took the helm in January...