S.A.’s Harte Hanks parts ways with Houston-based CEO
Struggling San Antonio-based marketing firm Harte Hanks announced Tuesday that it has parted ways with CEO and President Karen Puckett.
“As part of our ongoing efforts to ensure that we have worldclass leadership, focus on client service and drive profitability, we felt it was the right time to take decisive steps to identify the next generation of leadership for our company,” spokesman Scott Hamilton said in a phone interview.
Hamilton wouldn’t comment when asked if the Houstonbased Puckett was fired.
The company has no replacement lined up but intends to conduct a search to identify the right candidate, Hamilton added. It expects to hire Puckett’s successor within the next few months.
In the meantime, the company said in statement it has established a “temporary office of the
CEO to provide continuity and strategic direction.” Two board members and two officers will be part of the office.
Puckett’s departure comes almost three years after she was appointed CEO and president. She will no longer serve on Harte Hanks’ board, which she joined in 2009.
Harte Hanks and Puckett have entered into a separation agreement that will pay her $485,000 over the next year, in addition to some other benefits. The agreement also has a provision prohibiting Puckett from competing with Harte Hanks for six months, reduced from the two years stated in her employment contract.
Last year, Puckett received almost $2.4 million in total compensation — comprised of a $694,261 salary and more than $1.7 million in stock awards, the company disclosed in a proxy statement filed last month. Her annual salary was reduced by more than 30 percent to $485,000 in February.
Harte Hanks specializes in direct and digital communications, database marketing solutions, direct mail and call center operations. It is a successor to a newspaper business started by Houston Harte and Bernard Hanks in Texas in the early 1920s. In the 1980s, it owned dozens of daily and weekly newspapers, as well as over-the-air and cable television stations and radio stations.
The company has struggled as corporations abandon traditional print advertising for digital. Last year, it announced it was trimming $10 million in annual costs as part of a plan to enhance its “strategic position and financial flexibility.”
In its latest financial results for the three months ended June 30, Hart Hanks lost $6.9 million, or $1.10 a share, on $69.6 million in revenue. It lost $2.7 million, or 43 cents a share, on $94.7 million for the same period a year ago.
Earlier this year, Houstonbased hedge fund Fondren Management demanded that Harte Hanks take immediate action to “enhance” its corporate governance. That followed by seven months a push by New York hedge fund Sidus Investment Partners to get two of its nominees on Harte Hanks’ board.
Sidus co-founder Alfred Tobia was subsequently added to Harte Hanks’ board in July 2017 and became chairman in June. He is one of seven directors who have joined Harte Hanks’s board since last summer.
Tobia, in the statement, thanked Puckett for “working constructively with the reconstituted board to act in the best interests of shareholders and customers.”
Tobia added Harte Hanks officials believe “there are exciting opportunities to help accelerate growth while building upon the strengths of our full client offering.”
CFO Jon Biro will serve as the company’s principal officer during the transition period. He will be joined in the “temporary office of CEO” by directors Jack Griffin and Martin Reidy, and Andrew Harrison, executive vice president of contact centers.
Griffin, managing director of New York advisory firm Oaklins DeSilva+Phillips, and Reidy, most recently the CEO of a digital marketing firm, will each a $25,000 monthly retainer and grants of $100,000 in restricted stock units, according to a Securities and Exchange Commission filing.
Harte Hanks’ shares rose nearly 29 cents to close at $8.41 Tuesday.