CEOs on Tighter Leash -Exemplified by Spartech?

Earlier today, the CEO of Spartech SEH (NYSE), Georg Abd, announced his retirement as CEO and member of the board for personal reasons. The company appointed Randy Martin, the current CFO, as interim CEO. Spartech, a compounder and sheet extruder, has been doing reasonably well over the last year but recently announced it would have to revise its earnings guidance lower and also failed to meet its quarterly sales goal for this most recent quarter.

Abd was appointed Spartech's CEO in May of 2005. During his tenure with the firm, he managed to restructure parts of the company which included the closing of a number of plants, the sale of certain operations as well as executed a number of acquisitions. Spartech's business is subject to the run-up in oil prices which directly impacts the company's raw material costs. While considered a leader in its field it has a number of challenges in this difficult marketplace.

It is hard to determine right now the real reasons behind Abd's sudden resignation. Investors should watch the firm closely for any dramatic changes in strategy or whether the company becomes a possible takeover target or private equity acquisition possibility.

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