Kevin Rollins

"For 3 qtrs now, Intel money has made the qtr." Kevin Rollins wrote that in a 2004 internal email to Michael Dell about the money Intel was paying the company not to use chips from AMD, and he called it "a bad way to run the railroad." The Securities and Exchange Commission quoted the email six years later when it charged him. By the SEC's account those payments went from 10 percent of Dell's operating income in fiscal 2003 to 38 percent in fiscal 2006 and 76 percent in the first quarter of fiscal 2007, and investors were never told. Rollins became chief executive in July 2004, a few months after the email, so the document is a fair summary of the job he inherited: a company whose results were being made by a supplier, run by a founder who kept the chairmanship and, as Wikipedia puts it, acted as a de facto co-chief executive.

He had come to Dell in April 1996 from Bain & Company, where he was a vice president and partner advising technology and consumer clients, and where he had helped design the strategy that put Dell in front in direct sales of computers in the United States. Before that he was in Provo: born there on November 15, 1952, two bachelor's degrees from Brigham Young University in 1983, an MBA the year after.

The compensation figures are on the record. Forbes listed him in 2006 as the 18th highest-paid chief executive in the world at $39.31 million. His severance, signed on February 13, 2007, was $5 million in cash over two years, with a formal departure date of May 4, 2007; Wikipedia separately records a $48.5 million cash payment tied to expiring stock options, a figure the newspapers of the time did not report.

The tenure reads as a list of firsts, most of them unwelcome. Dell's sales growth slowed in fiscal 2005 and the stock lost a quarter of its value that year. Rollins put more money into staff training and customer service, added AMD processors in 2006 after years of Intel exclusivity, and bought the gaming PC maker Alienware the same year; sales rose by $14.2 billion, up 6 percent, with net income of $762 million, and the company employed about 50,000 people worldwide on revenue of $45.4 billion in his last four quarters. None of that was enough. In late 2006 Hewlett-Packard passed Dell as the world's largest PC maker, ending a run Dell had held for years. A recall of 4.1 million laptop batteries after reports of fires came in 2006. The SEC opened an investigation into Dell's accounting that year, and the company later restated results for fiscal 2003 through 2006 after finding that employees had adjusted account balances to hit quarterly targets. Rollins oversaw the largest layoffs in Dell's history to that point, about 8,000 people worldwide across 2006 and 2007. Four of his last five quarterly reports missed expectations. Over the whole tenure the stock fell 9 percent and performed at 81 percent of the S&P 500. On January 31, 2007 Dell announced that Michael Dell was resuming the chief executive's job with immediate effect and that Rollins had resigned from that post and from the board; Samuel Nunn, the presiding director, said the board believed "Michael's vision and leadership are critical" to the company's future, and Michael Dell said Rollins had been "a great business partner and friend." Wikipedia adds that there was resentment inside the company at his decisions and execution and that this contributed to his removal, a claim that gets repeated but that the cited sources do not pin down.

On July 22, 2010 the SEC charged Dell, Michael Dell, Rollins and former chief financial officer James Schneider over the company's disclosures. The core allegation against Rollins was that Dell had not told investors how much of its profit came from Intel's exclusivity payments, and that in the second quarter of fiscal 2007, after Intel cut the money when Dell added AMD, Rollins told investors the decline came from aggressive pricing and unexpected component costs instead. He settled without admitting or denying the allegations. The terms:

• Dell Inc.: $100 million penalty
• Michael Dell: $4 million penalty
• Kevin Rollins: $4 million penalty, plus a permanent injunction against future violations of Sections 17(a)(2) and (3) of the Securities Act
• James Schneider: $3 million penalty, plus disgorgement of $83,096 and interest

Robert Khuzami, the SEC's enforcement director, put the principle in one line: "Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws." The fiscal years at issue ran from 2002 to 2007.

Rollins became a senior adviser to the private equity firm TPG Capital and, on January 1, 2009, chairman of the board of trustees of the American Enterprise Institute in Washington. He has sat on the U.S. Advisory Committee for Trade Policy and Negotiation, the Computer Systems Policy Project and the boards of the Austin Symphony Orchestra and KLRU public television. Wikipedia notes his financial support for Mitt Romney's Republican presidential campaign. The record on his own Church service is thin; the sources this profile could reach say nothing beyond his BYU degrees and his BYU giving, so nothing is claimed here.

Give back always; don't wait until you're rich enough to start giving back.

He said that at BYU's Marriott School on November 20, 2008, twenty-two months after leaving Dell, in a talk about happiness that also included the line "It is impossible to do all things at all times and remain happy." The giving had started earlier. In 2000, while he was president of Dell Americas, he and his wife Debra provided the initial funding for the Marriott School's eBusiness Center; on February 23, 2009 it was merged with the BYU Center for Entrepreneurship to form the Kevin and Debra Rollins Center for Entrepreneurship and Technology, which he continues to fund. He co-chairs BYU's President's Leadership Council and sits on the Marriott School's National Advisory Council. Utah's Information Technology Hall of Fame inducted him in 2004, while he was still chief executive and the stock was still falling.