* 5 more executives leave after Markets chief Devin Wenig
* Analysts concerned about desktop product Eikon roll-out
* Thomson Reuters shares close down 3.11 pct on NYSE
(Adds more quotes, background)
By Jennifer Saba and Robert MacMillan
NEW YORK, July 22 Five more senior executives
are leaving Thomson Reuters Corp (TRI.N) (TRI.TO) in a shake-up
of its Markets division, which has posted disappointing revenue
growth amid slow sales of a key new product.
The departures follow that of Markets chief Devin Wenig,
announced on Thursday and reflect the concerns of the board and
the controlling shareholder, Canada's Thomson family, about the
performance of the division. The unit, which serves banks,
brokerages and other firms, contributes almost 60 percent of
the company's revenue.
In particular, the slow and difficult roll-out of Eikon, a
flagship new product for financial professionals, has been a
Analysts are concerned that Thomson Reuters might not meet
its revenue goals over the next few years if it cannot convince
existing clients to migrate to the new platform, and win new
customers away from Bloomberg LP and others.
"The real issue with Eikon was whether it could move market
share or not," said Claudio Aspesi, an analyst with Sanford
Bernstein. Wenig's exit highlighted these worries, he said.
"There's a concern about how the Markets division will
perform for the year and increased uncertainty of management
turmoil," Aspesi said.
Thomson Reuters' stock fell 3.11 percent in New York on
One big project under Wenig was the launch last September
of Eikon, aimed at knitting together dozens of disparate
products after Thomson Corp's acquisition of Reuters in 2008.
The new product incorporates social media-like functions
such as Twitter, and was designed to be more cost-effective and
easier to install and provide upgrades.
But nine months into the roll-out, the company has migrated
to Eikon only about 24,500 of the roughly 500,000 users of its
legacy products, and Eikon brought in only about 3,500 new
users, according to an internal company memo this week.
Thomson Reuters CEO Tom Glocer announced a restructuring of
the Markets division and said he would assume personal
responsibility for the business instead of hiring a replacement
for Wenig. The moves put the onus of a turnaround squarely on
"As he becomes more directly involved ... it's going to be
very difficult to blame any poor performance on anyone else,"
said Larry Tabb, founder and CEO of Tabb Group, a financial
markets research firm.
At a time when many banks are cutting staff, he noted, it
was a tough task to persuade them to buy new products.
"During a time of transition, people vote for status quo
rather than change," he said. "Thomson Reuters is dealing with
very powerful competitor. Bloomberg, fortunately for Bloomberg
and unfortunately for Thomson Reuters, has not made mistakes."
Wenig was one of Glocer's closest associates, the first
person he hired into Thomson Reuters 17 years ago. Both are
former mergers and acquisitions lawyers, and Wenig was
considered to be a contender for the top job at Reuters before
the company was taken over by Thomson in 2008.
"The board ... has wanted to make more substantial changes
than I wanted or would have accepted," Wenig wrote in an email
to his direct reports.
The other senior executives leaving Markets are Reuters
Media President Chris Ahearn, Global Sales and Customer Service
Managing Director Joerg Floeck, Investment & Advisory President
Eric Frank, Chief Marketing Officer Lee Ann Daly and Global
Head of Human Resources John Reid-Dodick.
"This transformation is about driving growth, unleashing
cross-company capabilities and making it easier to get things
done," Glocer said in a memo to employees.
"Importantly, it's also about accountability and
transparency. As we work to create a performance-driven
culture, let's make it a culture where results speak the
loudest and collaboration is the norm."
Glocer said he was not planning other other major
Thomson Reuters' Markets division is recovering slowly from
the financial crisis, which battered the profits of many of its
customers. The company's Professional division, which serves
legal, tax and accounting professionals, has performed more
Revenue in the Markets division rose 2 percent in the first
quarter of this year. Revenue at the Professional division rose
8 percent. Both divisions derive most of their revenue from
long-term subscriptions, which means there is a lag before the
company gets revenue from a product sale.
Thomson Reuters, which is scheduled to report
second-quarter earnings on July 28, reaffirmed its 2011 outlook
on Thursday. [ID:nN1E76K26G]
Thomson Reuters stock closed at $35.51 in New York on
Friday, virtually the same as when the merger closed in April
2008. Shares of competitor FactSet Research (FDS.N) have soared
71 percent over the same period.
Aspesi said he was pleased that Glocer would run the
Markets division directly because he knows it well.
"At the same time, clearly not all is well," he said.
(Reporting by Jennifer Saba, editing by Ted Kerr and