The rumor mills of Silicon Valley are working overtime speculating about why Juniper Networks CEO Shaygan Kheradpir suddenly resigned last week from a corner-office job that could have paid him tens of millions of dollars.
Juniper said in an official statement on November 11 that the Kheradpir resignation followed a review by the board of directors of his leadership and “his conduct in connection with a particular negotiation with a customer.”
Kheradpir had started the job on January 1. Several sources close to Juniper say the industry remains somewhat surprised and bewildered about the resignation, pointing out that high-profile CEOs don’t typically walk out the door in under 12 months. At least two industry sources also told me that the customer in question was Verizon, where in the past Kheradpir worked as Executive Vice President and Chief Information & Technical Officer.
The story from a Wall Street source close to Juniper goes like this: Kheradpir was in the middle of negotiating a big deal at Verizon, which is one of Juniper’s largest customers. These negotiations have been tense, with tight capital-spending budgets and pricing pressure permeating the business atmostphere. Kheradpir apparently said or did something wrong.
What exactly did he do? Not clear. But the industry source said the particular way in which he handled the customer got the attention of Juniper founder and Chairman Scott Kriens, who, after investigating, did not like what he saw.
Juniper is not commenting on the history of the resignation other than what it has said in the press release.
Kheradpir, a former COO and CTO at Barclays, had a rough start in the job right out of the gate. He had to deal with a shareholder activist campaign mounted by Elliott Management, which took a large position in Juniper and demanded change. Juniper, under Kheradpir’s new watch, agreed to a major restructuring, including $160 million in cost cutting.
More recently, some analysts questioned Kheradpir’s vision at the recent Juniper analyst day, where he emphasized Juniper’s hardware offerings and downplayed trends emerging in Software Defined Networking (SDN).
It’s not yet clear how much Kheradpir will be paid to walk out the door, but he will probably be handed a generous severance package, even though he walked away from potentially much more. According to SEC filings, he was being paid a $1 million salary, plus the potential to earn an annual cash bonus of $1.75M, $6.75M in stock, a $10M buyout of his Barclays contract, and as much as $15M more, depending on the performance of Juniper’s stock.