NEW YORK -- Rarely has so successful a chairman been so summarily sacked by his board of directors. But why? Was it a mutiny of disgruntled managers that prodded the directors of Sunbeam-Oster Co. to tell Paul B. Kazarian late Saturday that he was being "terminated," as the company's statement says?
The company isn't forthcoming, and Mr. Kazarian says he doesn't know. But speculation about the ouster set Wall Street buzzing yesterday as investors rushed to decipher the move by Sunbeam-Oster, which is seen by many as a sparkling example of how swift and savvy management can profit handsomely by turning around a company in bankruptcy proceedings.
The most popular theory advanced yesterday by company analysts, and corroborated by executives close to the company who spoke on condition of anonymity, was that while Mr. Kazarian's driven and focused management style provided a sure and steady hand in crisis, top managers began to resent his demand for control over detail once the turnaround had taken hold.
His insistence that they carry beepers and work seven days
TC week also aggravated the managers, who apparently threatened the board that they would all leave unless Mr. Kazarian, 37, was shown the door.
"We regard the dismissal of Kazarian as a clash over style rather than substance," said Andrew Silver, an analyst at Dillon, Read & Co., who issued a report saying that he believed Mr. Kazarian's dismissal was orchestrated by the company's managers.
"I never heard that," Mr. Kazarian said yesterday from his home near the company's headquarters in Providence, R.I., adding that he remained baffled as to why he was fired.
In a sense, the case of Sunbeam-Oster fuels an emerging trend of recent boardroom ousters from the likes of American Express and General Motors. But it also stands in contrast to those companies because the pressure on the chairman apparently has come from employees rather than from investors or directors.
Just as curious, Mr. Kazarian's firing followed the swift turnaround of Sunbeam-Oster, which was brought out of bankruptcy protection in 1990 by an investment group led by Mr. Kazarian.
The company went public in August at $12.50 a share, creating more than $1 billion in wealth for its original buyers, who include Michael Steinhardt's Steinhardt Partners and Michael Price's Mutual Series Funds.
In the third quarter of 1992, its first reporting period since going public, sales rose 11 percent, to $200.1 million, and its earnings jumped 40 percent, to $11.9 million.
Sunbeam-Oster's stock fell 82.5 cents a share yesterday, to $15.825, in trading on the New York Stock Exchange. It had traded as low as $15 early in the day.
Mr. Steinhardt, Mr. Price, other company directors and Sunbeam-Oster executives did not return phone calls yesterday. A spokesman for the company, which makes a range of consumer goods like barbecue grills and food processors, said the board's deliberations were "not a matter of public dialogue."
Mr. Kazarian disagreed, as is his style. Happy to tweak the establishment, he has long favored wearing baseball caps rather than ties.
He spoke freely yesterday about the management style that had come into question. Part of his role was to continually raise expectations, he said.
"There are two perceptions," he said. "One, that you've already accomplished everything. The other is that we're 50 percent of the way there. You should never be content."