3/23/2015Redflex US Chief Calls It Quits
Head of US operations for Redflex Traffic Systems announces his resignation in the wake of major legal and financial woes.
The man brought in to rescue the US division of Redflex Traffic Systems from a corruption scandal and looming bankruptcy announced his resignation on Monday. James Saunders, who held the title of president and CEO of the American subsidiary of the Australian firm, will leave no later than June 30.
When Saunders joined Redflex in October 2010 as the vice president for account management, the company was sailing high with a stock price of $2.50 per share. He was elevated to the top US job in July 2013 after the company cleaned out the top management ranks in the wake of a federal bribery and corruption investigation that has the former head of US operations, Karen Finley, facing a long prison sentence in a case. One of Finley's co-defendants has already pleaded guilty, and her former deputy has turned state's evidence.
By the time Saunders took the reins, the stock had plunged to $1.13 a share and his job was to slow the decline as best he could. Saunders met with customers, reinforced the importance of ethics training and urged every reporter he could talk to believe that the company was different now.
Despite Saunders' effort, cities continued to drop red light camera and speed camera programs, many seeking to avoid being drawn into scandal. Earlier this month, Redflex announced that profit plunged 414 percent in the first half of the fiscal year. Australian investors are scurrying from the stock, which tumbled to 60 cents on Friday, a 47 percent drop under Saunders.
Saunders is walking away from a generous compensation package of $442,794 per year, just slightly under the near half-million annual payouts that Finley, his predecessor, received. Just four months ago, Redflex Chairman Adam Gray said he had hoped he had seen the last of the turmoil in the executive ranks.
"Over just the past three years, this company has seen seven directors leave the organization, has had three chairmen and is on its third group CEO," Gray said. "Seven directors. Three chairmen. Three CEOs. Over three years."
For his part, Saunders was not worried about the impact of his departure on investor confidence.
"Redflex has been an important part of my life for the last five years," Saunders said in his statement to Australian investors. "I leave Redflex in good hands."