Management Turnover as Change Agent

Monday, September 8, 2014

August Experiences Major Drop in Executive Turnover - Coincides with Employment Growth Drop for August

August is the first month in a long time where executive turnover showed significant declines from the same month a year earlier (August 2013) and from the previous month (July 2014).  It is likely, the latest drop in Liberum Research's executive turnover numbers is a momentary blip.  Liberum expects turnover in September to increase significantly and to continue growing throughout most of the Fall.   As has so often been the case, the drop in executive turnover for August coincided with a similar drop in August for job growth as measured by the U.S. Bureau of Labor Statistics and by ADP's August employment Report.
 
Liberum Comparison Breakdown of Key August Executive Turnover 

Below is a breakdown of Liberum's key executive category percentage changes for August 2014 compared with August a year earlier and the previous month of July 2014.   
  • For August 2014 declines in turnover took place in three key categories.  CEO changes declined 24% from  August a year earlier, C-level changes declined 20%, and board of director changes declined 25%.  CFO changes on the other hand, increased a mere 1%.
  • The month to month change in executive turnover (July 2014 to August 2014) also showed significant declines in three of the four key categories.  CEO changes declined 30% for CEOs, C-level changes declined 26%, and board of director changes declined 29%.  CFO changes on the other hand, increased 32%.       
Below are the overall turnover totals for August.  The information is just illustrative of how institutional investors could view executive turnover and its possible relationship with a company's performance.  Using Liberum's database could offer a totally new perspective on investment and is a potential way to come up with unique special situation opportunities.  Executive search firms on the other hand can use the information to generate new leads and new clients.   

Call now (212-988-5497) or email richard@twst.com and get a no obligation one week trial to Liberum's online management change database.
 
KEY CEO CHANGES - AUGUST 2014
63 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING 
According to Liberum's Management Change Database, a total of 157 CEO related changes occurred during August 2014. Here are 63 from the time period that caught my eye.   By significant, I'm looking for situations where I think a particularly strong or weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation. (Anyone using Liberum's database could do the same kind of analysis for other key titles, e.g., CFOs, COOs, CMOs Presidents, etc.)

DATE  COMPANY TICKER  EXCHANGE  MARKET CAP $ MILLIONS    
08-01 Xiangtian Usa Air  GOAS  OTC  971
08-04 Brady Corporation  BRC  NYSE  1306
08-04 Cafepress Inc.  PRSS  NASDAQ  87
08-04 DST Systems, Inc.  DST  NYSE  3595
08-04 ITT Educational Services, Inc.  ESI  NYSE  186
08-04 Southwest Gas Corporation  SWX  NYSE  2256
08-04 Synacor, Inc.  SYNC  NASDAQ  66
08-04 Vantage Health  VNTH  OTC  17
08-04 Vystar Corp  VYST  OTC  5
08-05 Dara Biosciences  DARA  NASDAQ  11
08-05 Rex Bionics  RXB  SEA
08-06 Sage Grp Plc Unsp  SGPYY  OTC  6876
08-06 Sprint Nextel Corporation  S  NYSE  23275
08-06 Theravance, Inc.  THRX  NASDAQ  2478
08-07 Bcb Bancorp, Inc.  BCBP  NASDAQ  108
08-07 Cleveland-Cliffs Inc  CLF  NYSE  2618
08-07 Cortendo Ab  CRTOF  OTC  57
08-07 Nanometrics Incorporated  NANO  NASDAQ  398
08-08 Axion Intl Hldgs  AXIH  OTC  20
08-08 GNC Corporation  GNC  NYSE  3091
08-11 Bemis Company, Inc.  BMS  NYSE  3982
08-11 Citizens & Northe  CZNC  NASDAQ  241
08-11 ConAgra Foods, Inc.  CAG  NYSE  13279
08-11 Demand Media Inc.  DMD  NYSE  167
08-11 Destination Mater  DEST  NASDAQ  266
08-11 Empire Global Gam  EPGG  OTC  974
08-11 Lmi Aerospace Inc.  LMIA  NASDAQ  187
08-12 Capital Product P  CPLP  NASDAQ  973
08-12 Equal Energy Ltd  EQU  TORONTO  215
08-12 Gncc Capital, Inc  GNCP  OTC  20
08-12 Manitoba Telecom  MOBAF  OTC  2190
08-12 Serco Group  SRP  LONDON  15
08-12 Spark Networks plc  (ADR)  LOV  NYSE  133
08-13 Alternative Energ  ALNE  OTC  36
08-13 CDI Corp.  CDI  NYSE  282
08-13 Ezcorp Inc   EZPW  NASDAQ  525
08-13 Platforms Wireles  PLFM  OTC  306
08-15 Cms Bancorp, Inc.  CMSB  NASDAQ  21
08-15 Decisionpoint Sys  DPSI  OTC   4
08-15 Hallmark Financial Services, Inc.  HALL  NASDAQ  188
08-18 Aeropostale, Inc.  ARO  NYSE  308
08-18 Dollar General Corp.  DG  NYSE  19339
08-18 Eniro  ENRO  STO  
08-18 Kennametal Inc.  KMT  NYSE  3509
08-18 Mechel OAO (ADR)  MTL  NYSE  762
08-19 Gordmans Stores  GMAN  NASDAQ  65
08-19 Imperva, Inc. Com  IMPV  NYSE  770
08-19 Urologix, Inc.  ULGX  OTC  3
08-20 Polonia Bancorp,  PBCP  NASDAQ  46
08-21 Aaron's, Inc. Com  AAN  NYSE  1838
08-21 Ixia  XXIA  NASDAQ  752
08-21 Petlife Pharmaceu  EVGID  OTC  
08-22 Landauer, Inc.  LDR  NYSE  342
08-22 NTN Buzztime Inc.  NTN  NYSE  40
08-22 Rightscorp, Inc  RIHT  OTC  26
08-25 The Bon-Ton Stores, Inc.  BONT  NASDAQ  226
08-26 Single Touch Syst  SITO  OTC  57
08-26 Telecity Group Pl  TLEIY  OTC  2679
08-26 Western Graphite  WSGP  OTC  595
08-27 Pandora Media, In  P  NYSE  5509
08-27 Xzeres Corp  XPWR  OTC  15
08-28 Era Group Inc.  ERA  NYSE  522
08-29 Donegal Group, In  DGICA  NASDAQ  420
08-29 Neutra Corp  NTRR  OTC  4
 
AUGUST 2014 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1157
TOP INDUSTRY SECTORS
> Drugs/Biotech - 131> Energy - 101
> Banking - 73

AUGUST 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 157
TOP INDUSTRY SECTORS
> Drugs/Biotech - 16
> Retail - 12> Banking - 9
> Business Services - 9

AUGUST 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 158
TOP INDUSTRY SECTORS
> Energy - 30
> Drugs/Biotech - 28
> Banking - 12

AUGUST 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 395
TOP INDUSTRY SECTORS
> Drugs/Biotech - 43
> Energy - 35
> Business Services - 27

Thursday, July 17, 2014

2nd Quarter Executive Turnover Remains Positive - Investment Ops Abound

Executive turnover continues in a positive direction despite a slowdown in a few of the key categories.  The trend in executive turnover continues to correlate with the continuing positive news related to job growth in the American economy and the declining overall unemployment rate.  Last Thursday, July 3, the U.S. Department of Labor's Bureau of Labor Statistics (BLS) announced the June Employment Report and, as anticipated, the numbers were quite positive.  According to the BLS Report,

Total nonfarm payroll employment increased by 288,000 in June, and the unemployment rate 
declined to 6.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains were widespread, 
led by employment growth in professional and business services, retail trade, food services and drinking 
places, and health care. 

Earlier in that same week, ADP released it latest Employment Report and the job growth numbers were also very positive. According to the ADP Report released July 2,

Private sector employment increased by 281,000 jobs from May to June.

Mark Zandi, chief economist of Moody’s Analytics, said, "The job market is steadily improving. 
Job gains are broad based across all industries and company sizes. Judging from the job 
market, the economic recovery remains fully intact and is gaining momentum.” 

The American economy appears to moving on all cylinders.  Job opportunities are growing at numerous levels of the economy but still remain inconsistent for numerous people with different skills and experience.  Top executives in both small and large firms are beginning to find new job opportunities for their talents.  Liberum Research expects to see increased turnover in the executive ranks as we move through the the Summer and into the early Fall, despite the fact this is typically a slower time for executive turnover.  
 
Liberum has put together below a six plus year quarterly breakdown of executive turnover totals for CEOs, CFOs and C-level executives covering North America. Most of the below quarterly numbers showed continuing declines until the second quarter of 2011.  At this point, the numbers began to reverse themselves.  Turnover at the executive levels of corporate America began to grow but not consistently.  You can see that despite the slowing overall numbers in June of this year, the numbers were quite positive for the second quarter.
 
Below is a simple table outlining the quarterly turnover totals as registered through Liberum Research's Management Change Database for 2008 through the first quarter of 2014 for CEO, CFO and overall C-level turnover.  

 Total CEO Turnover Comparisons   
                              
 Year 2008    2009 2010 2011 2012 2013 2014   
1st Quarter 745491 388346 680 583 500 
 2nd Quarter596 380321 581665 619 537 
 3rd Quarter533409298713 636 627 
 4th Quarter461430328697 673 636 
 Annual Total2,3351,7101,3352,337 2,6542,465 1037
 
 
 Total CFO Turnover Comparisons 
                        
 Year 2008    2009 2010 2011 2012 2013 2014   
1st Quarter 593 332 296 280 640 495  468
 2nd Quarter551 326 273 404612 557   595 
 3rd Quarter438 279 256629 598582  
 4th Quarter364 313  258   476569562  
 Annual Total1,9461,250 1,0831,789 2,4192196 1063
 
 
 Total C-level Turnover Comparisons
        
 Year 2008    2009 2010 2011 2012 2013  2014   
1st Quarter 6735 4061 34532863 5442 3971 4083 
 2nd Quarter7430 5051 3199 404150364102 4117 
 3rd Quarter4865 3690 25225349 42354123 
 4th Quarter4277 3439  2381   4596 41974196 
 Annual Total23,307 16,241 11,55516,849 18,91016,392 8,200
 

As you can see from the quarterly and annual executive turnover totals in the above chart, North American public companies are operating at a more consistent level with regard to turnover.   The same is true when viewed from a brief monthly perspective. June's 2014's executive turnover totals remained reasonably high in the key categories.  Liberum expects this trend to continue as we move through the Summer and early Fall months.  

The latest monthly comparison figures with regard to executive turnover for June 2014 with those of June 2013 and May 2014 and June 2014 are as follows:  
  • CEO turnover for June 2014 declined 14% from that of June 2013, whereas CFO turnover increased 10%, C-level and Board of Director turnover declined 15% for both categories.  
  • The the month to month change from May 2014 to June 2014 showed a decline of 23% for CEOs, a decrease of 27% for CFOs and a decline of 20% with regard to C-level changes and a decline of 12% for Board of Director changes.  
In the below report, Liberum has focused on fifty six CEO changes of special significance for the month of June out of a total of only 164. We have also put together the overall turnover figures for the month of June 2014.  The below information is just illustrative of how investors could view executive turnover and its possible relationship with a company's performance. The same could be done for COOs, Presidents, Chairmans, etc. just through the Liberum database.

DATE       COMPANY   TICKER    EXCHANGE   MARKET CAP $ MILLIONS
06-12 Absolute Software ABT  TORONTO  301
06-24 Advanced Cell Tec ACTC  OTC  193
06-02 Advanced Energy Industries, Inc.  AEIS  NASDAQ  756
06-17 Air Products & Chemicals, Inc.  APD  NYSE  27679
06-18 American Apparel, Inc.  APP  NYSE  115  
06-10 American Int'l Group, Inc.   AIG  NYSE  79580
06-24 Antares Pharma Inc.  ATRS  NASDAQ  358
06-02 Arctic Cat, Inc.  ACAT  NASDAQ  452
06-05 Avra   AVRN   47
06-12 bebe stores, Inc.  BEBE  NASDAQ  263
06-16 Biolase, Inc.  BIOL  NASDAQ  80
06-09 Brainstorm Cell T  BCLI  OTC  55
06-05 Caprock Oil Inc  ROKO  OTC 48
06-24 Chemring Group Pl  CMGMF  OTC  737
06-02 Cision  CSN   ST
06-26 Citrix Systems, Inc.  CTXS  NASDAQ  10426
06-02 Curis, Inc.   CRIS  NASDAQ  145
06-17 Dara Biosciences  DARA  NASDAQ  10
06-10 Dendreon Corporation  DNDN  NASDAQ  327
06-25 Diadexus, Inc.  DDXS  OTC  41
06-03 Digipath DIGP   OTC  22
06-11 Dna Brands, Inc.  DNAX  OTC  696
06-27 Dollar General Corp.  DG  NYSE  17346
06-13 Doral Financial Corp.  DRL  NYSE  30
06-18 Ecrypt Techno Inc  ECRY  OTC  16
06-02 Equity One, Inc.  EQY  NYSE  2796
06-09 Everyware Global,  EVRY  NASDAQ  28
06-30 Finnvedenbulten  FBAB  STO
06-12 First Natl Corp S  FXNC  OTC  37
06-05 Fresh Promise Foo  FPFI   OTC  306
06-28 Furmanite Corp  FRM   NYSE  417
06-25 Heatwurx  HUWX  OTC  20
06-02 Hipcricket Inc  HIPP  OTC  32
06-23 I.D. Systems, Inc.  IDSY  NASDAQ  62
06-12 Infosys Technologies Ltd (ADR)  INFY  NYSE  30421
06-03 Innocent, Inc.  INCT  OTC  392
06-24 Kid Brands, Inc   KIDB  OTC  233
06-16 Lihua Internation  LIWA  OTC  62
06-05 Maxwell Resources, Inc.  MAXE  OTC  1
06-11 Medient Studios,  MDNT  OTC  1
06-02 Navidea Biopharma  NAVB  NYSE  239
06-13 Novatel Wireless, Inc.  NVTL  NASDAQ  60
06-10 Ocean Power Tech  OPTT  NASDAQ  20
06-18 Pdc Energy, Inc.  PDCE  NASDAQ  2410
06-13 Protalix BioTherapeutics Inc.  PLX  NYSE  356
06-30 Rayonier Inc.  RYN  NYSE
06-13 Research Frontier  REFR  NASDAQ  139
06-25 Senesco Tech  SNTI  OTC  19
06-17 Solvista Gold Cor  SVV  CA VANCOUVER  10
06-27 Tecumseh Products  TECU  NASDAQ  94
06-06 Thinspace Tech  THNS  OTC 23
06-04 Universal Truckload Srvcs, Inc.  UACL  NASDAQ  715
06-03 Unwired Planet, I  UPIP  NASDAQ  239
06-23 Vican Resources,  VCAN  OTC  19
06-06 Xerium Technologies, Inc.  XRM  NYSE  242
06-23 Zynex Inc  ZYXI  OTC  8

JUNE 2014 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1206
TOP INDUSTRY SECTORS
> Drugs/Biotech 
- 160
> Banking  - 101
> Energy - 70
JUNE 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 163
TOP INDUSTRY SECTORS

> Drugs - 24
> Auto  - 7
> Energy - 6
JUNE 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 181
TOP INDUSTRY SECTORS

> Drugs/Biotech - 26
> Metals/Mining - 14
> Health - 10
JUNE 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 376
TOP INDUSTRY SECTORS

> Drugs/Biotech - 60
> Banking - 26
> Energy- 25
Investors need to diligently monitor key management changes. Certain management changes should be viewed as a "special situation" that can have a direct and major impact on a company's performance and share price.
  • New CEOs know more than the market about the company.  Their decision to take the position contains information. Likewise the departing CEO. Likewise departing CFOs.
  • New CEOs will bring new skills and often-times a new direction.  This is normally significant, and worth analyzing.
Liberum Research, the independent research firm focused on corporate management change, has developed an online relational database designed to assist institutional investors develop special situation investment ideas related to executive management change. While special situation investing traditionally revolves around corporate restructuring, spin-offs and acquisitions, executive management changes, depending on the circumstances, can represent a short or long-term investment opportunity. 
Liberum's ten year old database offers institutional investors the ability to examine an individual company, sector/s, group of companies, and/or geographic region/s/ locations via a metric of one's own choosing.  You can use the information individually or in combination with a number of other financial tools to develop unique investment ideas.  Subscribers often take the service as an electronic feed rather than as an online service. Through the use of Liberum's electronic feed, investment firms have the ability to integrate Liberum's management change data with a variety of other feeds and data applications which when combined could be used as a sophisticated method for developing potential short and long-term investment ideas. 

Wednesday, June 18, 2014

May Executive Turnover Points Positive For Economy - Watch for Bumps Ahead

Liberum Research's executive turnover data for May 2014 continued to show positive signs for the North American economies.  CEO and CFO changes monitored by Liberum saw very high percentage increases from the previous month of April and C-level turnover showed a healthy increase over the same period.  The numbers were not quite as positive when viewed from the same month of May a year earlier, but Liberum does not view the year to year by the one month as a real issue.  The recovery continues to move in spurts, both up and down, but the overall trend remains positive.  Wednesday, June 4, ADP released its Employment Report for May and while the totals were below most analysts expectations, the U.S. Labor Department's Bureau of Labor Statistics (BLS) Employment Report, the far more important of the two, released Friday, June 6, was better than the ADP report and bodes well for the continued up and down recovery.  This BLS report was far closer to results Liberum saw in May as it related to executive turnover.  

Last Wednesday's ADP's Employment Report for May 2014, as stated above, was below analysts expectations but was not terrible.  According to the ADP Employment Report:

"After a strong post-winter rebound in April, job growth in May slowed somewhat,” said Carlos Rodriguez, president and chief executive officer of ADP. “The 179,000 jobs added figure is higher than May of last year and in line with the average over the past twelve months.” 
Mark Zandi, chief economist of Moody’s Analytics, said, "Job growth moderated in May. The slowing in growth was concentrated in Professional/Business Services and companies with 50-999 employees. The job market has yet to break out from the pace of growth that has prevailed over the last three years.” 
Last Friday's U.S. Labor Department's BLS Report, while not terrific, was reaosnably good:
Total nonfarm payroll employment rose by 217,000 in May, and the unemployment rate was unchanged at 6.3 percent. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.
Liberum Comparison Breakdown of Key May Executive Turnover 

Below is a breakdown of Liberum's key executive category percentage changes for May 2014 compared with May a year earlier and the previous month of April 2014.   
  • For May 2014 decreases took place in two key categories.  CEO changes declined 5% from a year earlier, board of director changes declined 21%,  whereas overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) remained virtually the same and CFO changes increased 17%.
  • The month to month change in executive turnover (April 2014 to May 2014) showed a different picture with increases in three of the four key categories of 38% for CEOs, CFO changes increased a whopping 48%, C-level changes increased 8% while board of director changes declined 14%.       
Below are the overall turnover totals for May.  The information is just illustrative of how institutional investors could view executive turnover and its possible relationship with a company's performance.  Using Liberum's database could offer a totally new perspective on investment and is a potential way to come up with unique special situation opportunities.  

Call now (212-988-5497) or email richard@twst.com and get a no obligation one week trial to Liberum's online management change database.
KEY CEO CHANGES - MAY 2014
58 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING 
According to Liberum's Management Change Database, a total of 211 CEO related changes occurred during May 2014. Here are 58 from the time period that caught my eye.   By significant, I'm looking for situations where I think a particularly strong or weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation. 

COMPANY TICKER  EXCHANGE  MARKET CAP $ MILLIONS    
Adcare Health Sys  ADK  NYSE
Aggreko  AGK   LONDON  45
Ambassadors Group  EPAX  NASDAQ  60
Ambit Biosciences  AMBI  NASDAQB  110
American Caresour  ANCI  NASDAQ  11
Assurant, Inc.  AIZ  NYSE  4793
California Gold M  CGM  CVE
Canadian Pacific Railway LTD (USA)  CP  NYSE   27698
Canamex Resources  CSQ  CVE
Corecomm Solution  COCMF  OBB  649
Covance Inc.  CVD  NYSE  4826
Crocs, Inc.  CROX  NASDAQ  1308  
ENSCO International Inc  ESV  NYSE  11837
Enzymebiosystems  ENZB  OBB  19
Excel Corp   EXCC  OTN  9
Famous Dave's of America, Inc. DAVE  NASDAQ  227
Ford Motor Company F  NYSE  61662
FTI Consulting, Inc. FCN  NYSE  1236
Furmanite Corp FRM  NYSE  412
Green Tech Soluti  GTSO  OBB  986
Greenplex Svcs In  GRPX    OTN  43
Hansen Medical, I  HNSN  NASDAQ  147
Hawaiian Electric Industries, Inc. HE  NYSE   2436
Hyduke Energy Ser  HYD  TORONTO  13
Infoblox Inc. Com  BLOX  NYSE  690
International Flavors & Fragrances Inc.  IFF   NYSE  7982
Ja Energy JAEN  OBB  9
Krispy Kreme Doughnuts  KKD  NYSE  1210
LGL Group Inc. LGL  NYSE  11
Lihua Internation  LIWA  NASDAQ  62
Magnachip Semicon  MX  NYSE  439
Marin Software In  MRIN  NYSE  324
Maxwell Technologies Inc.  MXWL  NASDAQ  483
National Bank Hol  NBHC  NYSE  844
Navidea Biopharma  NAVB  NYSE  204
Nokian Tyres  NRE  FINLAND
Omnicare, Inc.  OCR  NYSE  6271
Orofino Gold Corp  ORFG  OTN  2
OXiGENE, Inc. OXGN  NASDAQ  27
Parker Drilling Company  PKD  NYSE  803
PGT, Inc. PGTI  NASDAQ  395
PolyOne Corporation POL  NYSE  3533
Pope Resources POPE  NASDAQ  304
Prospect Global R  PGRX  OTN  4
Radient Pharm Cp  RXPC  OTN
Sally Beauty Holdings, Inc.  SBH  NYSE  4135
Sierra Monitor Co  SRMC  OTN  16
SupportSoft, Inc.  SPRT  NASDAQ  124
Target Corporation  TGT  NYSE  36939
The Mosaic Company  MOS  NYSE  19133
Tier Technologies, Inc.  TIER  OTN  711
Vhgi Holdings Inc  VHGI  OTN  891
Viewtran Group, I  VIEW  NASDAQ  58
Virtus Oil and Ga  VOIL  OBB
Vulcan Materials Co  VMC  NYSE  7815
WesBanco, Inc. WSBC  NASDAQ  847
Wpx Energy, Inc.  WPX  NYSE  4345
Yaterra Ventures YTRV  OTN  635
MAY 2014 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1513
TOP INDUSTRY SECTORS
> Drugs/Biotech - 137> Business Services - 102
> Banking - 98

MAY 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 211
TOP INDUSTRY SECTORS
> Energy - 19> Drugs - 17
> Health Services - 11

MAY 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 247
TOP INDUSTRY SECTORS
> Business Services - 23
> Drugs/Biotech - 20
> Energy - 18

MAY 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 428
TOP INDUSTRY SECTORS
> Drugs/Biotech - 39
> Energy - 30
> Business Services - 29