Pomeroy fires CEO Stephen E. Pomeroy

HEBRON, Ky. --International technology services provider Pomeroy IT Solutions Inc. said Thursday it fired President and Chief Executive Stephen E. Pomeroy, following a review by independent counsel.

The company said Pomeroy was fired "due to certain conduct and actions," which did not include any financial impropriety or illegal activity.

The board appointed Chief Financial Officer Kevin G. Gregory, 44, to serve as president and CEO on an interim basis. His term began Tuesday. Gregory also will continue to serve as CFO.

The leadership change follows the recommendation of two proxy advisory firms, Institutional Shareholder Services and Glass Lewis, that stockholders elect new, independent directors at its annual shareholders meeting on July 12.

In its report, which was released on June 29, ISS said it did not find "a reasonable explanation" as to why Chairman David Pomeroy was succeeded by his son as CEO. It also said Stephen Pomeroy's first year compensation seemed "excessive" and questioned why David Pomeroy was also retained as a consultant.

Glass Lewis said the "litany of corporate governance issues facing the company require truly independent shareholder advocates."

In April, a major shareholder, Flagg Street Capital LLC, asked for three seats on the board and Pomeroy's removal as CEO. Flagg Street said it had lost faith in Pomeroy's ability to lead the company.

In May, the company initiated a review of its corporate governance practices.

The board is beginning an executive search to choose a permanent president and CEO.

Pomeroy shares fell 22 cents, or 2.2 percent, to $9.78 in morning trading.

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Questions or comments about this story should be directed to reporter Kristen A. Lee at 212-621-7190.