By Denny Jacob

Sonos Chief Executive Patrick Spence is stepping down, ending an eight-year stint as its leader as the company recovers from a botched app launch that hurt its brand.

The maker of premium wireless speakers and other audio products Monday said the board and Spence agreed to the change, which is effective immediately. Spence also is giving up his spot on the board, though he will remain with the company through June to help with the transition, according to a securities filing. Sonos said the change is unrelated to fiscal first-quarter results, which it will release Feb. 6.

Tom Conrad, an independent member of the board since 2017, will fill in as interim CEO. Conrad, who is stepping down as CEO of health platform Zero Longevity Science for the new role at Sonos, has served past stints at streaming platform Quibi, social media company Snap and internet-radio company Pandora Media.

"As interim CEO, Tom's mandate is to improve the Sonos core experience for our customers, while optimizing our business to drive innovation and financial performance," board Chair Julius Genachowski said in a letter to employees.

Trouble at Sonos began brewing after the company in early May issued an overhaul to its app that left many customers unable to connect or use their speakers. The Santa Barbara, Calif., company in August slashed its financial forecast for the fiscal year and put a hold on new product launches as it addressed issues with the app update. Later that month Sonos said it would lay off 6% of its workforce and reduce its real-estate footprint.

The challenges continued as fourth-quarter results in November revealed double-digit percentage declines in revenue and unit sales. Sonos' guidance for the first quarter indicated revenue would be down year-over-year.

Sonos' stock, which closed Friday at $14.52, has fallen 11% over the past year, and is down 67% from its all-time closing high of $43.89 in April of 2021.

Conrad in a letter to employees said it wasn't enough for Sonos to get back on track. "I think we'll all agree that this year we've let far too many people down," he added.

Conrad will receive a base salary at a monthly rate of $175,000 and an award of restricted stock units valued around $2.65 million that will vest over time as he serves as interim CEO. He will not be compensated for his service on the board while he serves as interim CEO.

Conrad has also stepped down as chair and member of the compensation, people and diversity & inclusion committee of the board in connection with his appointment.

Spence will receive a cash severance payment of around $1.9 million, the securities filing says, and the board has initiated a search for a permanent CEO.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

January 13, 2025 08:00 ET (13:00 GMT)

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