In a surprise move Monday, Rackspace CEO Lanham Napier resigned and also stepped down from the company’s board.
Graham Weston will take his place for now. He’s one of Rackspace’s founders and executive chairman of the board. Weston was CEO from 1999 to 2006.
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Wall Street doesn’t like this kind of surprise. At press time, Rackspace shares were down $4.36 (11%) at $36 per share in after-hours trading.
Napier didn’t just vanish into the night. In fact, he appeared on Rackspace’s earnings call Monday afternoon. “It’s been a difficult climb,” he said on the call. “Being CEO of this company is a 24-hour gig. Whether it’s dealing with a customer on Easter Sunday or something else, it’s a 24/7 gig, and it wears on me.”
In a press release and on the call, he cited Rackspace’s current stability as a factor in his decision; it’s a reasonable time to step away.
Napier will stick around in a consultant’s role but seems done with running a public company. Rackspace’s announcement says he “plans to invest in and advise other entrepreneurial companies,” and Napier, on the call, mentioned doing some work with “first-generation Americans.”
“I’m not sure I’ll find another CEO gig that’s as cool as the one I was just on,” he said, noting that he joined Rackspace in its $1.5 million-a-year days and saw it grow into $1.5 billion a year.
Speaking of earnings: Rackspace reported fourth-quarter revenues of $408 million and net income of $20.8 million, or 14 cents per diluted share. Total 2013 revenues were $1.53 billion.
For its fourth quarter a year ago, Rackspace reported revenues of $353 million and net income of $30 million, or 21 cents per share.
