Hyperion CEO eyes ethics, governance

25.04.2006

After having been at Sun for a number of years, it appears Mike [Lehman] is back [as chief financial officer] with the specific role to help restore Sun's profitability. I'm sure he'll have a major impact. The word on the street is that Scott has resisted layoffs. He takes that stuff personally, and he has a tremendous amount of pride in the Sun culture. I can see where a cost restructuring would be very difficult. When you've started a company, you feel an awful lot of personal responsibility for those people.

Now that former President and COO Jonathan Schwartz has taken over as Sun's CEO, would you say that parallels the shift Hyperion made in 2004? I suspect that's sort of how Scott and Jonathan work today in terms of a partnering role. So with Scott as chairman, that gives Jonathan the chance to really run the company day to day, but he'll have Scott there to help him out on strategy matters and the like. It's worked well for us; I suspect it will work well for them.

You noted in your opening keynote this morning that Symantec is a major Hyperion customer. Did the recent news about the IRS hitting Symantec with a US$1 billion tax bill, saying it underpriced intellectual property licensed to its Irish subsidiaries, affect Hyperion in any way? The No. 1 thing that a vendor like us can do to help a company in terms of their financial practices is really identifying variances. If you have a variance, and it looks too good to be true, it probably is. A lot of companies that have moved IP offshore and established shared services centers in Europe and all that have done so on a well-defined path over the last 10 years. So we'll be watching this tax bill with Symantec very carefully from the standpoint that many technology companies have taken similar actions to move IP offshore and therefore benefit from lower tax rates.

Have you done that? No, we haven't. We've kind of got the old-fashioned IP treatment -- it's all domestic, and we pay 37 percent taxes on our revenue. But we watch cases like this because we're a global company, and global tax law is something that affects all of us.

Is this something you would consider doing in the future? Sure we would. As you reach some size, having shared service centers around the world is a very common concept. That is, instead of doing an administrative practice country by country, you tend to centralize those things. Those two go hand-in-hand. To move IP without real operations is not an accepted tax practice.