Management Turnover as Change Agent

Friday, November 30, 2007

Sub-Prime Casualty Toll Claims Another

Zoe Cruz, commonly referred to as one of the most powerful women on Wall Street, appears to have been the latest casualty of the ongoing sub-prime credit crisis. After the market closed on Thursday, Morgan Stanley announced that Zoe Cruz, the co-President of Morgan Stanley, had resigned her position. According to a story by David Wighton in the Financial Times,
The ousting came three weeks after Morgan Stanley revealed it had lost more than $3.7bn on a subprime mortgage bet that went disastrously wrong.

... John Mack, Morgan Stanley’s chairman and chief executive, initially decided to take no action against Ms Cruz after discussing the matter with his board.

But after a longer “post-mortem”, he concluded that changes were needed, according to someone familiar with his thinking.

Sub-prime casualties keep climbing.

For more on the change:

Financial News Update (Dec 10)
Financial News
DealBook Update

CEO Watch - Edward Zander, Motorola, Update 1

Motorola early today announced that CEO Edward J. Zander would resign January 1 and be replaced by chief operating officer Greg Brown. Brown joined Motorola in 2003 and was promoted to COO and President in March. Zander has been under intense pressure for some time now. He was included on my CEO Watch back in October. Motorola has been struggling for a while and has successfully faced down activist shareholders (e.g., Carl Icahn) who have been demanding change at the firm. For a period of time, Zander surprised most experts who thought he would be forced out or lose control to Icahn. As the company has continued to see profits decline and lose market share to rivals, however, Zander's position became more and more tenuous. Zander will remain chairman until his term expires later next year.

Before working at Motorola, Brown worked at Ameritech and AT&T.

For more:

Deal Journal (Dec 6)
Bloomberg Update 5
PR Newswire (Carl Icahn)
CNN Money

Thursday, November 29, 2007

CEO Watch - Hector Ruiz, AMD, Update 1

Nothing seems to have happened since I first put Hector Ruiz of AMD on my CEO Watch list. In a study just released by the market research firm iSuppli, AMD dropped out of the list of top 10 Chip-maker manufacturers list. The huge drop in standing is just another sad state of affairs for a company that not long ago appeared primed to give Intel a real run for its money. The drop in standing is just another negative notch in Ruiz's declining reputation.

According to the iSuppli study,
... numbers show AMD’s market share in the semiconductor industry will climb to 14.2% by the end of Q4, which is still below where AMD was last year. AMD rival Intel is currently sitting on a massive 78.8% of the semiconductor market according to iSupply. Analysts for iSupply are also predicting that Intel will generate $7.24 billion USD in revenue this quarter while AMD generates a comparatively paltry $1.3 billion USD in revenue.
Could this projection mean increased pressure for Ruiz's head?

Stay tuned.

For the study details click here

Advance Auto Parts' Six Month Search For CEO Ends

Advance Auto Parts AAP (NYSE), a retailer of automotive aftermarket parts, announced today that Darren R. Jackson would become president and chief executive, effective Jan. 7. Jackson, 43, replaces John C. Brouillard, who has held the roles since Michael N. Coppola resigned in May. I wrote a piece on Coppola's exit back in late May.

Jackson is a somewhat unusual choice, he was most recently an executive vice president at Best Buy Co. Inc., and has been on Advance Auto Parts' board since 2004. Jackson has both an operations and finance background along with an understanding of retail but he has never worked in the auto parts industry. We will just have to wait and see what he brings to the table as a chief executive.

For more on the appointment:


Another CEO Bites The Credit Crisis Dust

E-Trade ETFC (NASDAQ) the embattled online brokerage firm appears to have found a savior. Citadel Investment Group will head a consortium that will give the firm a $2.5 billion cash infusion. At the same time, the company's well known CEO, Mitch Caplan has stepped down. President R. Jarrett Lilien was named acting CEO, while the firm searches for a permanent successor. The company also named Donald H. Layton, former vice chairman at J.P. Morgan Chase, to the post of chairman. Layton succeeds George A. Hayter, who will remain on E-Trade's board.

Caplan joins the inauspicious ranks of other top CEOs (Stanley O'Neal, Charles Prince, ) who have been ensnared in the sub-prime crisis. E-Trade was very heavily invested in sub-prime mortgages and its ultimate survival was jeopardized by the problem.

We can expect more high level turnovers as a direct result of the crisis.

For more on the resignation and Citadel's cash infusion:

Fortune Daily Briefing
Wall Street Journal (more)
NY Times
Financial Times
Wall Street Journal
Deal Journal
SeekingAlpha 2

Wednesday, November 28, 2007

What Happened To Stuart Scott ,The Fired CIO of Microsoft?

Earlier today I planned to write a short piece on the whereabouts of Stuart Scott, the former CIO of Microsoft, who was publicly terminated by Microsoft in early November. Rather than write a piece, I recommend you read the stories written by Meridith Levinson, the senior online editor of CIO magazine and a blogger herself. Here is the original press release from Microsoft announcing Scott's termination.

Meridith has continued to stay on top of the story.

Check Out Meridith's stories:

Some Recruiters Skeptical of Stuart Scott's New Job
Ousted Microsoft CIO Stuart Scott Scores COO Job at Mortgage Company
Microsoft Should Seek Internal Candidate to Replace Ousted CIO

CEO Watch - Citigroup's Search for New CEO, Update 5

Rumors continue to abound that current Secretary of Treasury, Hank Paulson and former head of Goldman Sachs, will be leaving the treasury post to head up Citigroup. Paulson who was a star at Goldman has failed to light any stars at Treasury might be an interesting choice. I am skeptical about the rumor but thought it was worth mention.

For more:


Tuesday, November 27, 2007

Cosmetics President Resigns - Stock Drops

Monday, Bare Escentuals BARE (NASDAQ), a cosmetics company, announced the surprise resignation of Diane Miles, who served as president of the firm for nearly a year and a half. Miles was considered instrumental in the company's success over the year. The company listed Ms. Miles on their website:
Diane M. Miles has served as President of Bare Escentuals since May 2006. Prior to joining Bare Escentuals, Ms. Miles served in a variety of positions at LVMH Moët Hennessy Louis Vuitton, a manufacturer of luxury goods, from October 1990 until May 2006, most recently as the Chief Executive Officer of Benefit Cosmetics, a cosmetics division of LVMH, from October 2003 to May 2006. Under LVMH's Christian Dior apparel brand, she served as Senior Vice President of Marketing from 2000 to 2003 and Marketing Director from 1990 to 2000. Before LVMH, Ms. Miles started her beauty career with L'Oréal, and held several management positions for Lanc™me, Biotherm and Vichy, cosmetics/dermatology divisions of L'Oréal. Ms. Miles received an M.P.S. from the University of London.
The company's Monday announcement stated:

Diane Miles resigned "to pursue other opportunities effective immediately."

According to San Francisco's Business Times :

Jim Taschetta, the company's chief marketing officer, will supervise sales and marketing workers until a replacement for Miles is hired. The new person's job title will be senior vice president of wholesale sales.

Bare Escentuals' stock price was down at one point today nearly 14%. Miles was an instrumental component of the company's success and the market demonstrated its worries over whether the company could effectively replace her talents.

Keep a close eye on how Bare Escentuals handles this major management loss.

For more:


Monday, November 26, 2007

Recommended Reading - More on the Need for Succession Planning - WSJ

Carol Hymowitz wrote a story in today's Wall Street Journal entitled, Too Many Companies Lack Succession Plans, Wasting Time Talent. The story is a worthwhile read particularly if you are interested in CEO turnover and its impact on a company.

Wednesday, November 21, 2007

CEO Watch - Rick Wagoner, GM Update 1

John Stoll of the Wall Street Journal had a story today indicating Rick Wagoner's honeymoon with Wall Street may be over.
The meltdown in the mortgage market and slumping car sales have combined to sour General Motors Corp. Chief Executive Rick Wagoner's brief honeymoon with Wall Street.
Stoll went on to say,
Mr. Wagoner, 54 years old, had earned high marks from many analysts and investors for reaching the new labor deal, which will allow GM to hand off billions of dollars in retiree health-care obligations to a union-run trust and reduce employees in its ailing North American operations. But GM's current problems, if they linger, could test that goodwill.
Stay tuned as the mortgage lending crisis continues wreak further problems. Will it result in Wagoner's head, only time will tell.

For more:


Tuesday, November 20, 2007

The Count Continues - H and R Block CEO Out

The sub-prime crisis has taken another casualty. Mark Ernst the embattled CEO, Chairman and President of H and R Block HRB (NYSE), the nation's largest tax preparation firm, resigned today effective immediately. Ernst's resignation comes shortly after William Trubeck, the company's CFO resigned. The company appointed Richard Breeden chairman and Alan Bennett, who retired earlier this year as CFO of Aetna, as interim CEO. Bennett will serve until a permanent replacement can be found. He has said he does not wish to serve as a permanent CEO.

Despite H&R Block's primary business - tax preparation - over the years the company became involved in a number of other financial-related businesses, banking and sub-prime mortgage lending. As the sub-prime market began to sour, the company was put under increased pressure to rid itself of that business, handled under the auspices of Option One.

Pressure continued to grow over the last year for changes at the company when activist hedge fund investor and former head of the SEC, Richard Breeden, whose investment fund held a sizable stake in the company, pushed a proxy fight to change the board of directors and the company's strategic overall direction.

Ernst remained totally opposed to Breeden and pushed hard to fight his proposals. A Reuters piece back in July stated,
In the proxy filing, H and R Block also urged shareholders to disregard any proxy card from Breeden. His firm Breeden Capital Management LLC said it owns 1.86 percent of H and R Block shares.

Breeden ... nominated himself and two associates, Robert Gerard and L. Edward Shaw, to fill the three seats up for election on H&R Block's 11-person board.

He has cited disappointment with H and R Block's financial performance and management decisions to stray into areas outside tax preparation, including subprime mortgage lending.
In September, Breeden managed to get the upper hand. He and two allies, Robert Gerard and L. Edward Shaw were elected by shareholders to be H and R block directors. Breeden from the start had pushed the firm to do something about Option One.

Back in April H and R Block managed to work a deal with private equity firm Cerberus Capital Management to sell Option One for an estimated $800 million far less than the $1.3 billion Ernst originally claimed it was worth. The deal, however, fell apart as the US housing market went into a slump. The breakdown in the deal paved the way for Breeden and his allies to succeed and get on the board with the goal to change the direction of the firm. Even after the breakdown of the deal H and R Block has continued to work to salvage a part of the deal but so far there have not been any tangible results.

According to a piece by Jeffrey Cane in Breeden stated the following today after Ernst resigned and he became Chairman,
"For more than 50 years H and R Block has successfully served the tax-related needs of millions of Americans and thousands of businesses, as well as helped clients meet their financial objectives. Our actions today reflect a determination to focus on those activities where H and R Block can generate significant shareholder value," Breeden said.
The real question remains can Breeden and Bennett find the right formula to solve H and R Block's problems. Stay tuned the firm is still in for a rough ride. One positive, Breeden's reputation is on the line and you can expect him to pull out all the stops.

For more:

Deal Journal (Update Dec 11)
Seeking Alpha (Update Dec 10)
Kansas City Star
Wall Street Journal
CNN Money
RTT Trading

Recommended Reading - Don't Cry for Financial CEOs

David Weidner of MarketWatch wrote an inciteful column today entitled Hired or fired, Street CEOs give thanks. In the piece he wrote:
Guys like O'Neal and Prince, ousted amid the biggest credit write-downs to ever grace the industry, are leaving with exit packages averaging more than $100 million. They've also been retired, not fired, which means more perks and a little dignity, even if we know better.
The changes at the top are all happening while jobs are bleeding on Wall Street.
Conditions are so bad on Wall Street that, when it comes to cutting jobs, the financial industry is even beating the automakers.

Detroit cut 51,934 jobs through the end of October, compared to 140,442 job cuts in the financial industry during the same period. More than half of those -- 73,436 -- were announced in the past three months.
For those interested it's a quick read.

Thursday, November 15, 2007

Value Vision Update to CEO Change

On October 30 I wrote a piece on the CEO change at Value Vision VVTV (NASDAQ). Three weeks have past and a major shareholder in the firm in a 13D filing and a letter to management praised the recent management change but called for the sale of the company. In a story yesterday in MultiChannel News Mike Parrell wrote:
According to the filing, Soundpost Partners managing member Jamie Lester sent a letter to ValueVision chairman and interim CEO John Buck on Nov. 12 praising the company for its efforts to improve operations and reshuffle leadership. But Lester added more needed to be done. Soundpost owns about 2.8 million ValueVision shares, or about 7.5% of its outstanding stock.
As suggested on October 30th, keep a close eye on the company.

CEO Watch - Hector Ruiz, AMD

Hector Ruiz the CEO of AMD, the also ran chip manufacturer, was highlighted today in piece by Alexsei Oreskovic of As the company continues to languish in comparison to its main competitor Intel, Ruiz's position is beginning to look at risk. Here is some of what Oreskovic wrote:
With AMD's financial performance and share price slumping, talk of a management change is in the air.

Speculation has been heightened by recent events, including the exit of investor relations head Mike Hasse, and the September departure of sales chief Henri Richard.

Last week, President Dirk Meyer was appointed to the company's board.
All potential steps to a management shakeup at the very top. We will just have to stay tuned.

For more:

Daily Tech
24/7 wall Street

Wednesday, November 14, 2007

Recommended Reading - Why Merrill Chose Thain

Peter Cohan wrote a piece for Blogging Stocks this afternoon entitled Why Merrill went with Thain instead of Fink. If true, the story is very troubling, particularly for Merrill.

Recommended Reading - Boards on the Hotseat

Jeff Nash of Financial Week wrote a story November 12th entitled, Boards on the Hotseat. If you are interested in CEO changes or more specifically, succession planning it is a worthwhile read.

Merger Failure Forces CEO of Friends Provident Out

Philip Moore CEO of UK based life assurer Friends Provident FP (LSE) was forced to resign after the company's failed attempt to merge with Resolution PLC. Moore, who initially opposed the merger, ultimately became a supporter of the idea. Resolution broke off its 3.4 billion pound agreement to merge with Friends about a month ago after it received takeover bids from Pearl Group Ltd. and Standard Life Plc.

The failure to merge left Friends in a difficult position especially at atime when credit markets have been reeling. Shareholders, board members and many outside specialists all appeared to favor the proposed merger. In response to the failed merger and the pressure to force Moore to resign the company, pressure was apparent from shareholders as to exactly what Friends planned going forward.

The company announced that Sir Adrian Montague, chairman since 2005, would become the executive chairman until a successor for Moore is found and that he would work with Jim Smart, the current finance director on a strategic review of the company. The strategic review is more than likely another way of saying how the company would find someone else to merge with. Sir Adrian said,
“... this has been a challenging year for the group.” He said while the board remained confident about prospects, “it is right that we should take a hard look at the group’s strategy to ensure that we are delivering the highest value available to our shareholders. The board has concluded that this requires a change in the management team.”
"The board intends to update shareholders on the strategic review by the time of the fourth quarter new business results at the end of January."
According to a story by Simon Challis of Reuters analysts have indicated,
In a final twist to the story of the failed merger between Resolution and Friends, Mike Biggs or Clive Cowdery, respectively the chief executive and chairman of Resolution, could be candidates for the top job at Friends ...
The pair are likely to leave Resolution if a 4.9 billion-pound ($10.2 billion) all-cash takeover from arch-rival Pearl succeeds. "They might be interested in Friends, given that they've already seen the book," said Hariharan, (an analyst for Fox-Pitt Kelton).
There is a great deal happening here. The stock immediately responded in the positive to the news that Moore was leaving. Keep a close eye on industry moves and what specifically Friends does over the next few months.

For more:

Times Online
Financial Times
Wall Street Journal
Finance Markets

Tuesday, November 13, 2007

Unexpected Change at Cable Wireless

Cable and Wireless CW (LSE), the telecommunications firm that has changed so many times over the years one might think of the company as the seasons, announced the surprise departure of Harris Jones, chief executive of its international division. Jones' exit is expected by the end of the year. Cable and Wireless organized itself into two divisions last year, each with its own chief executive. One division was international businesses which Jones headed and the other was Europe/Asia and US operations, headed by John Pluthero.

Pluthero will assume management control of the international and the Europe/Asia and US divisions until a replacement is found for Jones. Jones departure comes after the company announced its latest earnings. The company's group chairman, Richard Lapthone
... denied the departure was acrimonious, saying the division just needed "a fresh pair of eyes".
While overall results were not bad, Jones' division performed far worse than that of Pluthero's. C&W cannot expect to really turn things around if it continues with the same management structure. It really needs to find a management formula that can get the company to perform. It is possible, as has often been rumored, parts of the company might be sold or de-merged but the powers that be continue to insist that is not their plan. According to a story in Exec UK,
It has been widely expected that the company will demerge the UK and international operations, but the group said this morning that it had no immediate plans to split the divisions into different companies.
I suggest you keep a close eye on what specifically Pluthero does over the next few months, who Cable Wireless ultimately hires or is considering to replace Jones and whether the company works to come up with a new management arrangement.

Stay tuned.

For more:

Financial Times
Times Online UK
Cable & Wireless Release
The Guardian
Financial Times

Monday, November 12, 2007

CEO Watch - Angelo Mozilo, Countrywide Financial Corp. Update 1

Angelo Mozilo, the CEO of embattled Countrywide Financial Corporation, continues to exude confidence about his company's prospects as well as his own to survive the turmoil in the mortgage business. His confidence seems to run in the face of reality. Since my initial CEO Watch on Mozilo, CTW an adviser to pension funds has added itself to the company's list of critics. CTW has begun to put pressure on Countrywide's board of directors particularly its chairman. In a recent Los Angeles Times article by Kathy M. Kristoff and E. Scott Reckard it was stated,
CtW Investment Group, which represents the pension funds for the Teamsters, United Farmworkers and other unions that hold Countrywide shares, also criticized the board for excessive compensation for its directors.
"Current and historic director pay is both unjustified and a likely source of the board's passivity in the face of the company's current crisis," CtW Executive Director William Patterson wrote in a letter to Harley Snyder, Countrywide's lead director.

The letter says Snyder bears "central responsibility for Countrywide's egregious compensation."

"Your excessive compensation, together with your aggressive divestment of your own Countrywide stock at the peak of the housing bubble, militates powerfully against any inclination you might have to lead your fellow independent directors or hold Mr. Mozilo accountable," Patterson wrote.
The likelihood of the credit crisis continuing will only result in increased pressure on both Mozilo and the board. Stay tuned and keep a close eye on moves surrounding the firm and its top executives.

For more:

New York Times

Friday, November 9, 2007

Recommended Reading - Corporate America Now Seeking Team Builder CEOs

According to an article by Nelson D. Schwartz in the November 9th International Herald Tribune, corporate America is now seeking CEOs focused on team building.
... management experts and longtime observers of corporate America say, the current environment demands, and is attracting, yet another kind of chief executive: the team-builder.

"It's someone who can assemble a team that functions as smoothly as a jazz sextet," said Warren Bennis, a professor of management at the University of Southern California.

The article goes on to indicate specific types of candidates from outside the financial industry who might be a good fit to fill CitiGroup and/or Merrill Lynch's recent vacancies at the top.

To find out more read the article.

Thursday, November 8, 2007

CEO Watch - Rick Wagoner, General Motors

Rick Wagoner CEO of General Motors GM (NYSE) has previously been slated by analysts and top investors a number of times as a sacrificial lamb for General Motors declining fortunes. He has to the surprise of many managed to survive despite these challenges. To his credit, lately many of his most vocal naysayers thought he might actually succeed in turning the company around. That was somewhat true until the latest report that GM reported the largest three month loss in the company's history. GM has been caught in the credit crisis as have many others particularly in the financial industries.

In an article by Chris Isidore of he stated,
(GM) reported an operating loss more than 11 times larger than expected and a $39 billion charge that was among the biggest profit hits ever reported.

The nation's No. 1 automaker, which was hit with a soft U.S. auto market and a two-day strike by the United Auto Workers union during the quarter, lost $1.6 billion, or $2.80 a share, excluding special items.

That compares to the forecast of a 25-cent-a-share loss from analysts surveyed by earnings tracker Thomson First Call and earnings per share of $497 million, or 88 cents, on that basis in the year-earlier period.

Among the problems hurting GM results was a $2.3 billion loss in the home loan business at GMAC due to problems from the meltdown in subprime mortgages. GM sold a majority of GMAC but still owns 49 percent of the lender.
It is difficult to imagine, even with the high-level of support Wagoner has managed to receive from his board that he will be able to ride these results out and remain in charge of GM.

Stay tuned this will be a continuing story.

For more:

LA Times
Financial Times

Wednesday, November 7, 2007

Troubled Circuit City Loses Head Merchandiser

As Circuit City continues to follow an opposite path (declining) of its arch rival, Best Buy, it has found itself hit with another executive defection. Yesterday it was announced that David L. Mathews, executive vice president of merchandising, services and marketing was leaving his position to become president of Orchard Brands, a specialty retailer owned by private-equity firm Golden Gate Capital. The company has been reeling for some time now. In 2006 Philip Schoonover became the company's new CEO. Schoonover had previously served as Circuit City's chief merchandiser.

Schoonover has been attempting to right the ship, but so far has had little success. Over the last year the firm lost three top executive which now includes Mathews. Mathews' exit could not come at a worse time. The electronics retailer is gearing up for the Christmas selling season. Merchandising is key to success during the holiday season.

For more on the turnover see:

Wall Street Journal (sub. req.)

Recommended Reading - Even good CEOs can pick the wrong direction

Del Jones authored an article in USA Today yesterday on CEOs and how they manage. The article focuses on the obvious importance of judgment when evaluating CEOs.
Fresh research by top leadership gurus suggest that if great leaders have something in common, it could be this: a knack for escaping lapses of bad judgment. Or, at least the luck to do so. It may not even require an all-star's batting average in judgment. From Abraham Lincoln, our greatest leaders often have inconsistent judgment but, over long careers, find a way to be on the right side a few times when judgment is critical.
If you are interested in leadership and corporate management the article is worth a quick read.

Tuesday, November 6, 2007

CEO Watch - Ian McCarthy, Beazer Homes

Beazer Homes BZH (NYSE) CEO, Ian McCarthy has more problems than just an SEC investigation, declining profits and job cuts. CTW Investment Group, a shareholder advisory group, in a letter to the board has called for McCarthy's head.
With Beazer’s stock down nearly 80% this year and cancellations reaching a staggering 68% last quarter, decisive action by Beazer’s independent directors is required to restore investor, creditor, customer and regulatory confidence. Specifically, we call on you to immediately:

1. Replace CEO Ian J. McCarthy;
2. Name an independent board chairman; and
3. Establish a Legal and Regulatory Compliance Committee.

Rather than create sustainable, long-term value for shareholders, Mr. McCarthy has garnered egregious compensation while allowing his management team to violate federal law, improperly account for land development costs and sale-leaseback transactions, and provide undisclosed loans to executives.
Up to this point the company has not responded to the request. With the housing situation only expected to get more difficult, the company still reeling from financial related improprieties, suspension of the quarterly dividend and growing job losses, McCarthy will have a hard time saving his position.

Stay tuned as this situation heats up.

For more:

CNN Money
CTW Investment Group Letter
Atlanta Business Chronicle
Schaefer's Research
Houston Chronicle
Financial Week

Recommended Reading - Succession Planning

Today's International Herald Tribune contains an article by Louise Story on the demise of succession planning for CEOs in the United States.

For years, the idea of grooming a successor was a job requirement of a chief executive and a priority for a company's board, who both wanted a smooth transition.

That is no longer the case. Corporate governance specialists say that succession plans at many companies are sparse, and directors are increasingly turning to outside candidates when a chief executive leaves suddenly or is dismissed.

... A result is that for a variety of reasons, several prominent corporations that typically promote chief executives from within have turned to the outside to fill their top spot in recent years, including Boeing, Chrysler, Con-Agra, Ford, Hewlett-Packard and 3M.
Take a look, it's worth a read. I don't completely agree, but it is true many more situations involve a turnover without an heir apparent waiting in the wings.

For more on the topic:


Monday, November 5, 2007

CEO Watch - Richard Parsons, Time Warner Update 2

It's official, Time Warner TWX (NYSE) announced that its Board of Directors has elected Jeffrey L. Bewkes as Chief Executive Officer of Time Warner Inc., effective January 1, 2008. Bewkes currently President and Chief Operating Officer will retain the title of President. Bewkes will succeed Richard D. Parsons as CEO, and Mr. Parsons will remain as Chairman of the Board.

There may be real changes ahead for Time Warner. Stay tuned

For more:

Time Warner Release
LA Times
Times Online UK
The Register

CEO Watch - Richard Parsons, Time Warner Update 1

Reuters today reported that according to a report by CNBC, Richard Parsons will step down as CEO of Time Warner. The report claims Parsons will step down as CEO but remain as Chairman. Jeffrey Bewkes, the chief operating officer would become Parsons' replacement as CEO on January 1, 2008.

We can expect a lot more on this shortly.

For more:
Wall Street Journal

Recommended Reading - Forbes, Wanted CEO of major corporation

In light of the recent two major CEO changes (Merrill and Citigroup) Geoff Colvin of Forbes wrote an interesting piece on CEO succession planning. Obviously, the article was written after both aforementioned companies failed to have a succession plan in place. Take a look.

Sunday, November 4, 2007

CEO Watch - Charles Prince, Citigroup

The die has been cast, Prince has resigned as CEO and Chairman of Citigroup. In his place, Former Secretary of the Treasury, Robert Rubin and current Citi board member has been made chairman. Sir Win Bischoff, chairman of Citi Europe and a Member of the Citi management and operating committees, was made interim CEO. Bischoff will remain interim CEO until a successor is found.

On top of the management changes Citigroup said it would take an additional $8 billion to $11 billion in write-downs related to mortgage-related securities. Hopefully, no more shoes will drop. Citi insists it will not reduce its dividend as was suggested by some analysts late last week.

Monday should help sort out exactly what is next with more updates on the changes and how Citi plans to deal with the situation in the short-term.

Stay tuned.

For more:

Citigroup Press Release
Deal Book
Independent UK
Australian Business (WSJ)

Friday, November 2, 2007

CEO Watch - Charles Prince, Citigroup Update 4

Prince's time may finally be up.

As Citi's stock continues to slide and calls for Prince's head have grown the end seems near. Charles Prince, Citigroup Inc.'s CEO, will offer to resign Sunday, according to sources cited in a Wall Street Journal report.

For more:

Telegraph UK
Wall Street Journal

Multiple Management Defections From Toyota North America

Liberum Research often monitors multiple management changes at companies. We rely on this technique as one of many methods investors can use as a way to evaluate a firm as a potential investment opportunity (positive or negative) as it relates to management change. Today's International Herald Tribune for example, focused on recent senior executives that have left Toyota's North American division for rivals in the United States.

Toyota, as everyone is aware, has been giving American and its Japanese competitors constant pressure as the firm continues to move to new heights. The major defections could have an impact ultimately on Toyota's North American operations. In the story the writer, Yuri Kageyama states,
In just the last three months, three senior executives in Toyota's North American business abruptly left for rivals. The high-profile defections underline a new danger looming for the Japanese automaker - the lure of U.S. companies wooing the best in its ranks.

The executive exodus signals the overseas growing pains at Toyota Motor. It now sells three-quarters of its vehicles outside Japan and runs more than 50 manufacturing plants abroad, including five vehicle-assembly plants in the United States.
Always keep an eye on multiple management changes at companies, even when those changes are below the top C-level executives. Such changes may be an indicator of something going on at the firm.

Thursday, November 1, 2007

CEO Watch - Charles Prince, Citigroup Update 3

Can Prince continue to hold on to his position in spite of continuing bad news impacting the firm? Rumors were flying through the markets today that Citi might need $30 billion in short term loans. The rumors hurt the market and continue to put unending pressure on Citi.

Can Prince really withstand the pressure and will the board continue to back him?

For more:

Deal Journal
Times Online UK
Seeking Alpha