updated 5/3/2004 7:26:24 PM ET 2004-05-03T23:26:24

With a traumatic sales slump and a nasty shareholder fight behind him, Tom Siebel is stepping down as CEO of the business software maker that bears his name and turning the reins over to IBM Corp.’s former head of sales.

Under the changes announced Monday, Siebel will continue as Siebel System Inc.’s chairman and remain a full-time employee after he hands off the chief executive duties to Michael Lawrie, who stepped down as IBM’s senior vice president of sales and distribution to take the job.

“Mike Lawrie is the single best choice to lead and take Siebel Systems to the next level,” Siebel said in a statement Monday.

Lawrie, 50, will join Siebel on Tuesday. He told analysts in a conference call Monday that he isn’t planning any major changes. “The intention is to stay with the same team, strategy and game plan.”

San Mateo-based Siebel joins a growing list of companies that have split the chairman and CEO jobs — a division designed to create greater autonomy between corporate boards and management.

Siebel said he began thinking about separating the duties a year ago. “After giving it an awful lot of thought, I was absolutely certain that this is the right decision for the company,” Siebel told analysts.

Once Wall Street darlings, Siebel and his company faced fierce criticism from shareholders incensed about a downfall that at one point had erased nearly $50 billion in shareholder wealth.

The company’s market value has recently rebounded, along with its sales, but Siebel’s stock remains far below its 2000 peak of $119.88. The company’s shares gained 33 cents Monday to close at $10.62 on the Nasdaq Stock Market before the changes were announced, then fell 10 cents in extended trading.

Siebel, 51, has held the CEO title since he founded the company nearly 11 years ago and proceeded to build one of the world’s largest software makers.

Known for a no-nonsense, sometimes combative style, Siebel prided himself on creating a corporate culture devoted to satisfying customers and investors alike.

The formula was a winning one through most of the 1990s. Siebel’s shares climbed from an initial public offering price of a split-adjusted $1.06 amid rising demand for the company’s software products, which are designed to help businesses get a better handle on their customers.

But the complexity and relatively high costs of Siebel’s software began to hurt the company in recent years as corporate America became more prudent about its technology spending. After peaking at $2.1 billion in 2000, Siebel’s annual sales had shriveled to $1.35 billion last year.

Besides suffering from the overall tech slowdown, Siebel Systems also has faced tougher competition from large software makers like Oracle Corp. and SAP, as well as industry upstarts such as Salesforce.com Inc.

To offset its revenue losses, Siebel eliminated thousands of jobs, paring its payroll to about 5,000 employees. Despite the cutbacks, Siebel still lost a combined $128 million in the past two years.

The troubles seemed to take a toll on Siebel, said industry analyst Patrick Mason of Pacific Growth Equities. “He just got worn down,” he said.

Siebel’s decision to relinquish some control is likely to renew some of the takeover talk that has swirled around the company in the past year. Many analysts believe Siebel would be a logical fit for Oracle, which has said it expects to buy other software makers even it if succeeds in its 11-month quest to buy PeopleSoft Inc. for $9.4 billion.

But Siebel has repeatedly told investors and analysts that his company is more likely to be a buyer than a seller. With an 11 percent stake in the business, Siebel will continue to have a major say about the company’s destiny.

Selling to Oracle might be particularly loathsome for Siebel. A former Oracle executive, Siebel has feuded with his former boss, Larry Ellison, for years.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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