Amazon.com (Nasdaq: AMZN) president and chief operating officer Joseph Galli, Jr., appointed just 13 months ago, has resigned.
Galli, whom Amazon said is leaving for “personal reasons,” will become president and chief executive officer of business-to-business (B2B) trading network VerticalNet (Nasdaq: VERT).
In a brief press release, Amazon.com founder and CEO Jeff Bezos said, “We’d like to thank Joe for his hard work and accomplishments over the last year. I believe he is making the right decision for him and his family circumstances. We all wish him the very best.”
Known for Hiring Power
Amazon had high praise for Galli, telling the E-Commerce Times that the e-tail giant will miss his “energy and his bias for action.” The company also noted that Galli “fit into the culture at Amazon because he was dedicated to customer service and had a high bar for hiring new people.”
Bezos will continue as CEO of the company he founded, and will now resume the duties of president and COO, a post he created for Galli when the former Black & Decker executive signed on in June of 1999. Galli took the number two spot at Amazon after a 19-year stint with the power tools maker. He was named president of Black & Decker Worldwide in 1995.
Amazon said it is not looking for a replacement, but noted that it has “an extremely strong executive team in place, in part thanks to Joe.”
Sweet Deal Gone Sour?
Galli stunned Silicon Valley and Wall Street alike last summer when he accepted the Amazon job, instead of taking what was widely perceived to be a better deal with soda and snack manufacturer PepsiCo, Inc. A series of high profile brick-and-mortar executives followed in his footsteps and took the leap from blue chip to dot-com.
Although Galli’s yearly base pay of $200,000 (US$) was less than half of what he earned at Black & Decker, Amazon sweetened the pot by agreeing to pay Galli a $3 million bonus on his first year anniversary. Galli has apparently collected that bonus, but passed on the $2 million dollar bonus he was to receive if he gave the company two years of service.
In addition to his salary and other perks, Amazon had agreed to give Galli two 20-year stock options, vesting at 10 percent per year at different stages of his employment with the company. With Amazon’s shares hovering at roughly a quarter of its high-water mark of $113, the options package became a non-factor.
Amazon’s shares dropped as much as 12 percent Tuesday as rumors of Galli’s imminent departure circled. The stock settled down in late afternoon trading however, and ended the day down 1 1/8 at 37 5/8. VerticalNet shares rose 5/8 to 57 3/8.
Vertical on the Horizon
Commenting on his new position, Galli said, “VerticalNet is an extraordinary company and I am extremely excited about the opportunities ahead. Our goal is to dramatically expand VerticalNet’s impact on e-commerce and build the company into a driving B2B force. I am particularly impressed with the exceptional management team.”
Galli will succeed Mark Walsh at VerticalNet, who will remain as chairman of the Horsham, Pennsylvania-based company.
VerticalNet owns and operates 57 industry-specific online B2B communities, known as vertical trade communities. The company also provides auctions, catalogs, bookstores, career centers and other e-commerce capabilities horizontally across its communities with such sites as Industry Deals.com, LabX.com and Professional Store.com.