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Gateway Completes Search for New CEO

September 08, 2006|From Bloomberg News

Computer maker Gateway Inc. on Thursday named J. Edward Coleman as chief executive, ending a nine-month search to replace Wayne Inouye.

Coleman, 54, will join Irvine-based Gateway on Sept. 18, the company said. Gateway Chairman Rick Snyder has served as interim CEO since Inouye resigned in February after failing to boost profit.

Coleman joins the company from electronics and computer distributor Arrow Electronics Inc., in Melville, N.Y., where he was a senior vice president and president of the company's Enterprise Computing Solutions group.

Gateway has tallied almost $41 million in losses in the last nine months, including $7.68 million in the second quarter, and is struggling to boost sales over the telephone and Internet to counter a rise in less-profitable retail orders. On Sept. 1, the board rejected a $450-million offer for its retail unit by Lap Shun Hui, who sold his EMachines Inc. to Gateway in 2004.

Before Arrow, Coleman served as CEO and chairman of CompuCom Systems Inc., where he oversaw the Dallas-based company's transition to a provider of computer management services from a seller of personal computers.

"I bring the experience of leading a public company that had to go through difficult times, identify strengths and transform itself to come out ahead," Coleman said. "I find that kind of transformative work exciting."

Shares of Gateway, which ranks behind market leaders Dell Inc. and Hewlett-Packard Co., were unchanged at $1.86 during the regular session and rose 5 cents, or 3%, to $1.91 in after-hours trading. They have fallen 26% this year.

Coleman will be paid as much as $1.3 million in cash annually, half as a base salary, Gateway said. He will receive stock options valued at $1.95 million as well as a sign-on bonus of $217,000 in cash and restricted stock valued at $153,000, according to a regulatory filing.

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