Many longtime customers and staffers were surprised by Monday’s news that Avid — the publicly traded maker of film editing and sound postproduction tools that are a staple in Hollywood — had terminated its CEO, Louis Hernandez, Jr., citing “violations of company policies related to workplace conduct.” Avid president Jeff Rosica was upped to CEO as his replacement.
Staffers were notified of the news by company email. Also on Monday, the Massachusetts-headquartered company issued a statement, explaining: “With the assistance of independent external legal counsel, a special committee comprising independent members of the board of directors conducted a thorough investigation into allegations of improper non-financially related workplace conduct by Mr. Hernandez. After reviewing the findings of the special committee’s investigation, the board of directors unanimously concluded that the findings warranted immediate termination of Mr. Hernandez’s employment.”
Additionally, Hernandez resigned from the board of directors, for which he was chairman, and Nancy Hawthorne has been elected board chairman.
Rosica told The Hollywood Reporter that he would be holding an employee town hall call on Thursday, “one of several steps Avid will be taking to keep the conversation going and ensure that we create the best possible workplace for everyone. … Open and immediate communication with all of our colleagues globally is the first order of business.”
He also said in the following statement to THR: “Avid’s leadership is committed to ensuring that we’re providing a workplace that’s welcoming, inclusive and respectful for our company’s entire team. I’m personally very excited about our global organization’s energy, passion and the opportunity we’re pursuing together as a team. After several years of working with the Avid team, I personally believe that we’re in the best possible position to help our clients and the industry thrive amid digital disruption and secure new opportunities.”
On Monday, Hawthorne stated: “The board is committed to the company’s core values and to upholding an environment of the utmost respect and integrity. We remain confident in the strategy and the long-term business plan of the company.”
While the specific type of misconduct claim leveled at the former CEO is not yet known, one source pointed out, “We all had seen Louis at the Avid party the night of Eddie Awards [the annual American Cinema Editors event was held on Jan. 26]. No hint of any trouble.”
Avid is the maker of the Media Composer, the most widely used editing system in Hollywood. And Avid ProTools is a leading professional audio postproduction system, prominently used in Hollywood sound facilities. The company has a loyal army of supporters in the entertainment industry, but not all have been happy with the company’s direction and Hernandez, who joined the company as a tech entrepreneur but a Hollywood outsider.
“Louis wasn’t particularly well thought of in our community,” said the source from the editing community. “After he took over, the execs at Avid took very hefty salaries, which seemed bad for a company that still isn’t turning much of a profit, while not being very competitive in their product development.” Hernandez had earned $3.65 million in 2016 and $3 million was in stock.
“I felt strongly that under his direction, the company was completely out of touch with the user base,” added a longtime professional ProTools user. “ProTools is still the de facto standard in high-end professional audio and video recording facilities. But across the board, every ProTools user I know feels similarly [about the company being out of touch with the user base]. The users are still very loyal to the platform and hope that management takes the company in the right direction.”
Hernandez joined Avid as CEO in February 2013 (and additionally served as its president until December 2016) and was named chairman in October 2013. He had actually served on Avid’s board since 2008.
Rosica, 56, joined Avid as senior vp worldwide field operations in 2013. In 2016, he was appointed senior vp, chief sales and marketing officer and in December 2016, he was appointed president. From early 2002 until he joined Avid, Rosica served in various capacities with Grass Valley, which was a broadcast and postproduction equipment manufacturer, most recently as executive vp, chief sales and marketing officer.