Walter M. Hoff, the head of First Data Corp.'s card services group, is leaving to become president and chief executive officer of a health-care business unit of National Data Corp.
David P. Bailis, who had reported to Mr. Hoff since February as chief operating officer for the domestic card services group, was named his successor and takes on global responsibilities.
Mr. Hoff, 45, had overseen First Data's Palo Alto, Calif., merchant services unit until last year, when Charles T. Fote, another executive vice president, took over.
First Data missed its third-quarter 1997 earnings estimate and attributed the shortfall to merchant services. Roger Peirce, a former Visa executive who ran the merchant processing unit under Mr. Hoff, also lost out in the shuffle.
Mr. Hoff said, "I have only good feelings for First Data." The new job "is a fairly significant opportunity with tremendous growth potential."
Effective Aug. 1, Mr. Hoff will be president and CEO of Atlanta-based National Data Health Information Services, a $357 million business serving doctors, pharmacists, hospitals, and managed-care organizations. He will report to Robert A. Yellowlees, chairman and chief executive officer.
National Data is also a major transaction processor. Salomon Smith Barney analyst Richard K. Weingarten said it ranks sixth in credit card merchant volume, behind First Data, National Processing Inc., Paymentech Inc., BankAmerica Corp.'s BA Merchant Services, and Nova Corp.
Mr. Hoff, who joined First Data in 1989 when it was a subsidiary of American Express Co. and was most recently based in Atlanta, said he had been considering leaving "for a while."
National Data does not compete against First Data in the health-care sector, and Mr. Hoff said he did not want to go up against a business he "built up."
His departure "is going to make (First Data chairman) Ric Duques' life a little harder," said Ronald N. Zebeck, president and chief executive officer of Metris Cos., which recently signed a five-year card-account processing contract with First Data. Mr. Zebeck said Mr. Hoff was instrumental in winning his business.
"Walter has visionary qualities to see something and turn it into profit," said Mr. Zebeck.
Terri Dial, vice chairman of Wells Fargo & Co.-another First Data customer-said Mr. Hoff's departure would mean having to "reestablish relationships" with someone else at the company.
First Data recently lost a bid to archrival Total System Services Inc., a subsidiary of Synovus Financial Corp., for the card processing business of Sears, Roebuck and Co.
First Data's stock price languished, dropping to $25 last December from $46 a year ago. It has rebounded to about $33.50.
Mr. Hoff's successor, Mr. Bailis, joined First Data in 1989 and has been executive vice president since 1996. He has been asked to pursue electronic commerce opportunities and generally improve the merchant services group's performance, the company said.
"By bringing a consistent focus across the entire card services group, David will be able to create more operational synergy and monitor the significant investments we are making in electronic card payment initiatives, international ventures, and advanced technology," said Mr. Duques.
