Fiserv Inc. resolved one question about its future by naming an outsider to succeed its longtime chief executive, but that change and others in the executive suite raised fresh speculation about the Brookfield, Wis., technology vendor’s strategy.
On Monday evening Fiserv said Jeffery W. Yabuki, an executive vice president and the chief operating officer of H&R Block Inc., would become the president and CEO by December 1.
The appointment will accelerate the departure of its current president and CEO, Leslie M. Muma, who announced in October 2004 that he would retire in June 2006. Mr. Muma now plans to hand over the reins this month but will remain with Fiserv as a consultant until June 30 and as a director until next year’s annual meeting (whose date has not been set).
Mr. Muma cofounded Fiserv in 1984 and became the CEO in 1999.
Also Monday, Fiserv asaid that Kenneth R. Jensen, a senior executive vice president and the chief financial officer and treasurer, plans to retire in about nine months. The schedule will give Mr. Yabuki time to recruit his own finance chief.
Mr. Yabuki, 45, joined H&R Block in 1999 as the president of H&R Block International.
In a press release from the Kansas City, Mo., tax preparer, he said the decision to move was difficult. “However, my long-term career aspiration has been to lead and grow a company, and Fiserv presents me with that opportunity.”
In recent years H&R Block has increasingly pushed into electronic payments by promoting the electronic submission of tax returns and the electronic deposit of refund checks into customers’ accounts. It also offers a range of financial products and services, including tax refund anticipation loans, mortgages and mortgage servicing, annuities, and online brokerage.
Before joining H&R Block, Mr. Yabuki worked at American Express Co. for 12 years. His last position there was president and chief executive officer of American Express Tax and Business Services in New York. Before that he had led a group that completed more than 75 acquisitions for Amex.
The fact that Mr. Yabuki does not have a banking or technology background should not be considered a drawback, Mr. Muma said. “At this stage of our development, what we need is someone to run the company.”
He also said he foresees no change in Fiserv’s direction, though Mr. Yabuki would bring his own personal style to the job.
“Growth, by acquisition and organically, is what we do. Jeff knows that,” Mr. Muma said. “You’re not going to see any material change.”
Fiserv is a powerhouse within the banking technology world; it has ranked No. 1 on American Banker’s FinTech 100 list for two consecutive years. However, its revenue growth has slowed this year, and some analysts said that by hiring an outsider, it may have shown it is willing to embrace some significant strategic shifts.
Some speculated that Mr. Yabuki might take a fresh look at Fiserv’s famously laissez-faire approach to managing acquisitions, reexamine which markets it wants to serve, or even consider taking it out of the public equity market altogether.
Patrick Burton, an analyst at Citigroup Global Markets Inc., speculated last month in a research note that Fiserv could be a candidate for a leveraged buyout, in the same way that private equity investors acquired SunGard Data Systems Inc. for $11.4 billion in August. (In the past Mr. Muma has dismissed such ideas.)
In a note released Tuesday, Mr. Burton wrote that the changing of the guard gave him no reason to change his view.
“While it may take some time for Mr. Yabuki to become acclimated to Fiserv’s businesses, we do not believe this would preclude new management from considering radical strategic alternatives,” he wrote.
Christopher F. Penny, an analyst at Friedman, Billings, Ramsey & Co. Inc., said that low interest rates and the general trend of the market could spark some asset sales by Fiserv, if not a leveraged buyout.
“There seems to be a very strong appetite for private equity funds,” he said. “Why not sell into some of that appetite?”
Fiserv’s acquisition-heavy growth strategy has worked for two decades, Mr. Penny said. “The status quo is not a bad alternative,” but “some of the other alternatives could be even better.”
Carla N. Cooper, an analyst at the brokerage firm Robert W. Baird & Co., said it was telling that Fiserv turned to an outsider. “Fiserv has a number of very talented managers,” and it could have chosen an internal candidate. However, “by definition, none of those division managers at Fiserv has run a $4.5 billion company.”
Fiserv should consider changing its strategy of letting acquired companies operate independently, Ms. Cooper said. It has long said that independent companies thrive, and that its strategy can give it multiple product lines to offer customers.
In contrast, some of its rivals in core processing — such as Fidelity National Information Services Inc., which is majority owned by Fidelity National Financial Inc.; and Jack Henry & Associates Inc. — offer tightly integrated systems with ancillary products and services.
“What the customer wants is a great suite of integrated products,” she said. “I think an outsider might be in a better position to execute on those strategies.”
Robert Hunt, a senior analyst at TowerGroup, a Needham, Mass., market research unit of MasterCard International, said he was skeptical of the notion that Mr. Yabuki would drastically restructure Fiserv.
“The key is strategic — bringing somebody in from outside banking to look at their overall product offerings,” Mr. Hunt said. Mr. Yabuki could expand the company into areas such as tax and accounting services, and in any case, “he gives Fiserv a broader viewpoint.”
