Sage CEO Stephen Kelly is stepping down from the position in a sudden announcement that sent shares down on Friday (Aug. 31).
Reports in Reuters said Kelly is departing from the position heading the small business accounting and payroll software provider. Chief Financial Officer Steve Hare will become interim chief operating officer and begin the process of finding a new CEO, reports said.
The move comes as Sage attempts to reverse slowing growth after missing revenue expectations for the first half of the year. The company has also trimmed full-year targets.
Following the announcement, shares for Sage dropped up to 10 percent. Reports said more than $894 million in market value was slashed from the company as a result, marking it the largest drop for any firm on the FTSE 100 index and pan-European FTSEurofirst 300 index.
Analysts for Jefferies said, despite the share slump, Sage’s decision to replace its CEO could ultimately be a good one.
“While the shares might react negatively to the announcement of CEO Stephen Kelly stepping down, we believe the board’s decision to appoint CFO Steve Hare as the interim COO is positive,” the analysts said.
Earlier this year, according to Reuters, Sage pointed to “inconsistent operational execution” as the reason for sluggish growth. The company faces rising competition in the enterprise software space as more players are migrating to cloud based offerings from packaged software.
Sage chairman Donald Brydon said Kelly led the company “to become a leading SaaS business,” and that “the board remains fully supportive of the overall strategy.”
Earlier this year, Sage business development director of worldwide payments and banking, Lucy Underwood, spoke with PYMNTS about the company’s recent integration with PayPal as a reflection of changing corporate payment habits.
“Checks are on the decline, as they’re costly and labor intensive to process,” Underwood said. “Younger generations are changing consumer payment habits, with paperless options like PayPal becoming the preferred choice for providing a frictionless customer journey. This combination will be the driving force for getting businesses to adapt.”