Chairman Watch - Marcel Ospel, UBS

As the financial news for UBS AG UBS (NYSE) continues to look dim, I have finally decided to add Marcel Ospel, the imperious Chairman of UBS to my watch list. Ospel has always had the bank's board in his back pocket but how much can the bank take before some action at the top is taken. UBS has been ensnared in the U.S. sub-prime crisis for sometime now and their continues to be negative press about other parts of the bank. Just today, more bad news has come to light. In the UK Times Online, Tom Bawden wrote,

UBS has significantly increased its estimate of huge fourth-quarter losses from the American sub-prime mortgage crisis, further increasing the pressure on Marcel Ospel, its chairman.

The Swiss bank said yesterday that its quarterly losses from the sub-prime crash would be $14 billion (£7 billion), $4 billion more than the figure given a month earlier. Although UBS's total $18.4 billion of sub-prime losses so far are not as large as those of Citigroup or Merrill Lynch, they are the biggest among any of the European banks.

... To make matters worse, UBS revealed that it still owned about $29 billion of bonds and other investments backed by sub-prime mortgages, leaving scope for further writedowns in addition to the $18.4 billion that it has lost so far.

The banks needs to step up to the plate and make some changes at the top. I see very little opportunity for Ospel to weather this continuing and growing storm. Keep a close eye on the bank.

For more:

Reuters
Swissinfo.ch
Financial Director
Business Week

Update - Societe Generale Chairman to Stay On

According to a story by Gregory Viscusi for Bloomberg,

Societe Generale SA's board backed Daniel Bouton as chairman after a record trading loss at France's second-largest bank led to calls for his departure.

Bouton and co-Chief-Executive Officer Philippe Citerne "ave fully assumed their responsibilities since the start of this crisis,'' board member Jean-Martin Folz told reporters at the end of a meeting outside Paris today. "The board renewed its confidence in them today.''

I would not be so confident this is how it will play out ultimately - stay tuned.

For more:

Times Online
France 24
IHT
BBC
Financial Times
Yahoo (Reuters)

Pressure Builds on Head of Soc Gen to Resign

No real surprise, when you consider how the scandal at Société Générale has continued to evolve. Chairman and CEO Daniel Bouton has a difficult task ahead of him to survive as the bank's leader. According to the UK Times Online,

In a television interview today, Christine Lagarde signalled that Société Générale needed a change of leadership to recover from the world’s biggest trading scandal, involving the increasingly infamous trader Jérôme Kerviel who notched up €4.9 billion (£3.7 billion) in losses from share trades.

The latest hic cup to the scandal relates to what might be viewed as insider trading by one of the directors of the bank. The Times Online went to say,

Société Générale issued a statement regarding the sale of shares worth nearly €100 million by one of its board directors, Robert A. Day, days before the scandal broke.

Documents released yesterday by the AMF, the French market regulator, showed that Mr Day sold €85.7 million in shares on January 10. Also, two trusts connected to Mr Day, offloaded large chucks of shares on the same day — the Robert A. Day Foundation sold €8.6 million in stock and the Kelly Day Foundation sold €959,066. The AMF is due to send a report on the events at Société Générale to Ms Lagarde on Friday.

More and more it appears the Bouton will have an extremely difficult time saving his job. Stay tuned as the scandal continues to unfold and raise more questions than answers.

For more:

New York Times (Jan. 30)
Deal Journal
New York Times
Deal.com
France 24
Financial Times

Lambert Indicates New Direction for Sears, CEO Out

Edward Lambert the hedge fund chieftain, who at one time was considered by many as the next Warren Buffett, appears to have finally acknowledged his major investment in Sears SHLD (NASDAQ) has failed to work out as planned. Earlier today, the company announced that Alwyn B. Lewis the president and CEO of Sears Holdings would step down at the end of the fiscal year. Lewis will be succeeded by W. Bruce Johnson, an executive vice president of supply chain and operations. Johnson will take the position on an interim basis.

Sears under Lambert's tutelage and under the direction of his hand-picked CEO, Alwyn B. Lewis, has been performing very poorly as reflected in the stock and in sales. Lewis whose background was primarily in the restaurant business prior to working for Lambert was originally appointed by Lambert in 2004 to run Kmart. The appointment came after Lambert already managed to turn Kmart around. Lambert shortly after he appointed Lewis then went on to merge Sears and Kmart. At the time of the initial merger many analysts thought Lambert would be able to perform a similar miracle to Sears as he initially performed with Kmart. Retail analysts, however, were far more skeptical of Lambert's abilities to turn Sears around. With the merger Lambert then appointed Lewis to head up Sears. While there were periods during the merger that performance appeared to be moving somewhat in the right direction overall it has so far been a retailing failure. According to a piece by Louisa Nesbitt and Heather Burke in an earlier Bloomberg story, Howard Davidowitz, chairman of David Davidowitz Associates, the retailing specialist/consultant said,

"The company has been in free-fall''. They have not met one number since Aylwin Lewis has been there. They've had monster losses in market share, so how could you be surprised?''

Last week Lambert faced reality and announced plans to undergo an organizational restructuring. According to the company press release:

The new structure is built on five types of business units that enable each organization to focus on their core categories and capabilities: operating businesses, support, brands, online and real estate. The operating business units will consist of the company's current lines of business such as home appliances, electronics, and apparel. The support units will include the functions that provide operational and administrative support to the operating businesses including marketing, store operations, customer strategy and finance. The brand units will be responsible for growing the value of Sears Holdings brand portfolio. The real estate business unit and an online business unit will focus on increasing the sales productivity of the company's physical and virtual real estate.

Each business unit will have a designated leader and an advisory group comprised of senior Sears Holdings executives who will provide direction and oversee the business unit's performance. The leadership of each unit will have a separate, internal profit and loss statement to allow greater focus on managing the profitability of the unit, and rapid decision making to capitalize on opportunities and mitigate risks.

According to a piece by Michael Barbaro in the New York Times,

Lewis, the departing chief executive, oversaw several years of cost-cutting at Sears, the combination of Sears and Kmart that started in 2005.

Spending on new-store openings and renovations fell to less than 2 percent as a percentage of sales, less than half that of Wal-Mart and Target. As a result, many Sears and Kmart stores have fallen into disrepair, alienating shoppers and eroding both chains’ sales and profits.

Earnings for the crucial fourth quarter are expected to drop by more than 50 percent, the company has said. Over the last nine months, its stock price has plunged, wiping out $14 billion in market value.

Lambert is trying to convince the market and everyone else that he is serious about turning the company around but too much time has passed already and it is likely Sears will have a hard time finding a top retail executive to take this difficult task on. Barbaro in his Times article said,

... Lampert has struggled to recruit top retail talent to Sears Holdings over the last three years. According to people with knowledge of the discussions, Mr. Lampert has put out feelers to several top retail executives, including Millard S. Drexler, the former Gap chief executive, and Allen I. Questrom, the man behind the J. C. Penney turnaround. But neither has agreed to join the company.

We will just have to wait and see who Lambert manages to get to take on the task. Stay tuned now for what Johnson and Lambert have in mind for the short term.

For more:

The Deal.com
New York Times
Winston Salem Journal
Portfolio.com
Times Online
Bloggingstocks
Portfolio.com
Huffington Post
Market Watch Herb Greenberg
The Street.com
CNN Money

New Sprint CEO Axes Top of Executive Tree

Dan Hesse Sprint's S (NYSE) new CEO has begun to show his hand with a management shakeup at the top as well as overall. He has quickly stepped up to the plate and made some difficult but necessary first decisions. Early today, Sprint announced that three top executives would be leaving the company - Paul Saleh, CFO (Saleh served as interim CEO after Fossee the previous CEO was finally forced out), Tim Kelly, CMO and Mark Angelino, president sales & distribution. Hesse in the press release indicated he would work to find permanent replacements for these executives. In the interim, controller, William G. Arendt will serve as acting CFO, John Garcia, SVP of product development and management will serve as acting CMO and Paget Alves, regional president for sales and distribution will be acting president of sales and distribution.

The three major executive changes come shortly after the company announced plans to layoff nearly 4,000 employees and close 125 of its retail stores as a response to the firm's hemorraghing subscriber base and declining share price.

Shareholders who continue to see their investment decline in value can at least see a ray of hope for the future. Hesse has taken charge. He has already made moves to begin the effort to turn the ship around. As I said in my earlier posts, the real question is whether there still is enough time left to turn things around and whether strategy decisions and their execution will be sufficient to save Sprint-Nextel.

Stay tuned more big changes can be expected. Rumors continue that Sprint may lower its prices to gain new subscribers. A strategy which in itself might be more problematic than just going forward as they now stand.

New CEO at Advance Auto Parts Is Making Changes

Advance Auto Parts' AAP (NYSE) new CEO, Darren Jackson, has already begun to try and make his mark on the company. Jackson, who started as Advance's new CEO in early January after coming to the company from Best Buy, announced he will be bringing over additional executives from Best Buy to help Advance move forward and improve its relationship with customers. According to a story by Jenny Kincaid Boone in the Roanoke Times,

(Advance Auto Parts) the Roanoke-based automobile parts and accessories retailer announced three new executive hires, who all are former employees of Minnesota-based Best Buy.

One of Jackson's new hires is Michael Norona, who will be Advance's executive vice president and chief financial officer. Norona, previously president of financial services at Best Buy, replaces Michael Moore, who resigned as Advance's CFO.

Advance's new vice president of finance and investor relations is Judd Nystrom, who was senior director of retail finance at Best Buy. Adam Bergman, Advance's former investor relations representative, left the company last year.

Kevin Freeland will be Advance's new executive vice president of supply chain and information technology. He formerly was president and founder of Optimal Advantage, a retail consulting firm. But for eight years prior to that, he worked for Best Buy in several leadership roles. He's replacing C. Roy Martin, who has resigned as senior vice president of supply chain.

While none of these executives have a background in auto parts, their retail expertise and ability to work with Jackson could mean real positive change for the company. Keep a close eye on the continuing changes Jackson is attempting to make to the firm.

For more:

Trading Markets
Yahoo Finance

Meg Whitman of eBay to Resign

It is official, Meg Whitman, the decade long CEO of eBay will resign her position. She will be replaced by John Donahoe who will become president and CEO effective March 31.

See:

Seeking Alpha
Mercury News
Reuters
Marketwatch
TheStreet.com

Recommended Reading - Activist shareholder predicts banner year for rabble-rousing, IHT

According to a story by Dane Hamilton of Reuters in the International Herald Tribune activist shareholder and former SEC chairman Richard Breeden predicts a very busy 2008 for activist investors. If he is right, his prediction will also result in increasing pressure on CEOs with a probable increase in CEO turnovers that might not happen if not for activist shareholders. Only time will tell.

Meg Whitman CEO, Ebay to Retire?

According to a story by Mylene Mangalindan in today's Wall Street Journal,

EBay Inc. Chief Executive Meg Whitman is preparing to retire.

Whitman is one of the most powerful women executives worldwide. For sometime now, it has been known that Whitman has intended John Donahoe as her likely successor. Donahoe, who previously worked for Whitman, at Bain & Co., is president of eBay Marketplaces. He joined eBay in 2005. In the Wall Street Journal story, Mangalindan states:

... retirement would come at a critical point for eBay. The company's auction business... accounts for more than two-thirds of eBay's nearly $6 billion in annual revenue but has experienced slowing growth rates for the past few years. Any efforts to reverse the slowdown could involve drastic changes that may be more palatable under a new CEO. EBay has already warned Wall Street in recent months that it may alter how it structures its fees for listing and selling items by collecting bigger fees once sales close.

Should the Journal be right, Whitman is making the correct choice. Despite being extremely successful in running the company, many people agree that much of the fun of using eBay has diminished over the years. While Whitman has been key in many successful acquisitions (paypal) she was also the person in charge during the Skype acquisition fiasco and the recent smaller acquisition of Stumpleupon another questionable transaction. The company needs new blood to find ways to make the site fun again for customers and to get the business model more in tune with changes in the market.

We will just have to wait and see whether the prediction is correct that she will retiring, and if it is, whether Donahoe ends up as the new CEO.

Keep a close eye on the upcoming financial announcements. Stay tuned.

For more:

Valleywag
Los Angeles Times
Business Week
Times Online
The Guardian
Mercury News
CNN Money

War Games Publisher Execs Gets Zapped

Sci Entertainment Group SEG.L (London Exchange) the U.K. publisher and software/video game designer, well known for its war games and for the Lara Croft related games, went through a major executive purge early today after the company announced a sharp profits drop. The company has been dropping like a stone for the last year. According to a story by Tim Barwell for Bloomberg,

The stock had fallen 90 percent in the 12 months before today, making it the second-worst performer on the FTSE All-Share index after Northern Rock Plc.

According to a story by Dan Sabbagh in the Times Online,

Jane Cavanagh, chief executive of SCi Entertainment, and Bill Ennis and Rob Murray, the two divisional managing directors, have all left "with immediate effect". Shares in the company rose by 33.8 per cent, or 16¼p, to 64¼p.

Cavanagh will be replaced by Phil Rogers, group chief financial officer who joined the company last March. He will begin an emergency "business review". Ironically, Sci's problems come at a time when most companies in the field have been performing rather well. The management changes at Sci are a positive change, the question remains, can the firm save itself with a sale or some other arrangement?

Stay tuned:


For more:

Gamasutra
VNUNET.com
The Press Association
The Guardian

CEO Watch - Brian Roberts, Comcast

Chieftain Capital Management sent a letter to Comcast CMCSA (NASDAQ) urging the ouster of CEO Brian Roberts. The fund calls Roberts’ tenure a “Comcastrophe.” It’s also demanding that the company scrap its dual-voting structure, which it claims gives the Roberts family control of the company at the expense of shareholders owning 99 percent of the firm.

Comcast finds itself battling satellite competitors and telcoms. I have included Roberts on my CEO Watch list specifically due to the increased pressure placed on him by Chieftain's latest letter.

Time will tell.

For more:

Business Week Management IQ blog
Barrons
Reuters

Addendum to Previous Post on Target

Alexandra Biesada of Hoover's Bizmology had a different take on my previous blog post on Isaac Mizrahi's departure from Target and move to Liz Claiborne. Biesada suggested,

Great news for Liz, but bad for Target? Maybe not.

... (Referring to the appointment of Steinhafel as new CEO) Surely he has some ideas up his sleeve. (The industry buzz says Target has UK fashion designer Jonathan Saunders waiting in the wings as its next GO International designer.)

So rather than look at Mizrahi’s pending departure as a loss for Target, consider it an opportunity for the chain — which lately appears to have lost its way — to shake things up in the fashion aisle.

You decide.

Target Undergoes Double Whammy in One Month

Target TGT (NYSE) seems to be having a tough month. First the company announces slower sales and anticipates slower sales going forward. This is all taking place while Pershing Square Capital, run by hedge fund activist William Ackman, amassed nearly 10% of the company's stock and continues place pressure on management. Then in early January, the company announces its long time and successful CEO, Bob Ulrich, will resign as CEO on May 1, 2008. Ulrich will remain chairman until the end of fiscal 2008. In his place, the company promoted Greg Steinhafel, the current president, to be the new CEO. Now comes news that well known creative designer Isaac Mizrahi, who has been so important in Target's success will be leaving Target to help revive Liz Claiborne. According to NPR's Marketplace,

The retailer apparently tried hard to keep the cheap-chic designer but wasn't willing to match Claiborne's offer.

Let's hope Steinhafel has something up his sleeve to help the company.

For more:

CNN Money (video)

Sub-Prime Crisis Notches Keep Coming - Ambac CEO Out

The sub-prime crisis continues to exact a heavy toll on executive leadership. Early today bond issuer Ambac Financial’s Board of Directors announced that Robert J. Genader, the company's CEO, will retire effective today. In his place, the Board of Directors appointed Michael A. Callen as Chairman and Interim Chief Executive Officer. Mr. Callen has been Presiding Director and a member of the Audit and Risk Assessment; Compensation; and Governance committees of Ambac’s Board of Directors.

Expect more heads to roll as the crisis continues to exact its pound of flesh particularly from the financial related sectors.

Stay tuned.

For more:

MarketWatch (update 1/18)
Businessweek
Dealbreaker
Deal Journal
Financial Times
NASDAQ
CFO.com
Financial News
Portfolio.com
Bloomberg
DealBook
Bloggingstocks
Ambac Press Release
CNBC

Management Turnover Data for 2007 and 2006

Corporate management turnover in 2007 was slightly below the record levels registered for 2006 but remained very high. 2007 CEO, CFO and C-level turnover totals registered an overall decline of 5%, 2% and 2% respectively from that of 2006. The actual CEO and CFO changes for 2007 overall, however, were far more "significant" and in many cases were far more high-profile for the companies involved than were those registered in 2006.

2007 turnover data began to trend upwards after the first quarter of 2007 concluded. The first quarter of 2007 recorded dramatic declines from the same quarter in 2006. CEO turnover declined 17%, CFO turnover declined 22% and overall C-level management declined 15% in the first quarter of 2007 as compared with the same categories in 2006. The last three quarters of 2007, however, trended upward and are expected to continue at a high level into 2008. Each of the last three quarters showed a similar pattern in overall management changes with the record level of turnover recorded during 2006. Turnover totals for the last three quarters of 2007 were nearly the same as those in 2006 (see the data below).

2005, 2006 & 2007 QUARTER BY QUARTER
C-LEVEL CHANGE COMPARISONS
ALL C-LEVEL CHANGES
(Directors, CEOs, CFOs down to VP Level)

2005
1st Quarter - 3,135
2nd Quarter - 3,354
3rd Quarter - 3,787
4th Quarter - 6,396
TOTAL - 16,672

2006
1st Quarter - 7,539
2nd Quarter - 8,316
3rd Quarter - 6,214
4th Quarter - 5,989
TOTAL - 28, 058
(a 68% increase over 2005)

2007
1st Quarter - 6,430
2nd Quarter - 8123
3rd Quarter - 6321
4th Quarter - 6483
TOTAL - 27,357
(2% decline from 2006)

CEO CHANGES

2005
1st Quarter - 518
2nd Quarter - 500
3rd Quarter - 400
4th Quarter - 481
TOTAL - 1,899

2006
1st Quarter - 755
2nd Quarter - 727
3rd Quarter - 650
4th Quarter - 611
TOTAL - 2,743
(30% increase over 2005)

2007
1st Quarter - 626
2nd Quarter - 686
3rd Quarter - 641
4th Quarter - 664
TOTAL - 2,617
(5% decline from 2006)

CFO CHANGES

2005
1st Quarter - 457
2nd Quarter - 426
3rd Quarter - 408
4th Quarter - 426
TOTAL - 1,717

2006
1st Quarter - 630
2nd Quarter - 654
3rd Quarter - 551
4th Quarter - 466
TOTAL - 2,301
(23% increase over 2005)

2007
1st Quarter - 489
2nd Quarter - 646
3rd Quarter - 620
4th Quarter - 574
TOTAL - 2,329
(1% increase over 2006)

If you are intersted in more detailed data contact me by email.

Sub-prime Crisis Executive Notches Grow

Add another executive to the sub-prime crisis management waste basket. According to the UK's Times Online,

Barclays Capital, the investment-banking arm of Britain’s third biggest bank Barclays has ousted the co-president of its US operations after a series of write-downs related to sub-prime mortgage investments.

Grant Kvalheim is to leave Barclays this quarter while Jerry del Missier, his fellow co-president, will become sole president of the bank's US business.

Kvalheim is one of many names still being added to the list.

For more:

Bloomberg
Reuters
Wall Street Journal

Xilinx Takes Time To Select New CEO

Xilinx XLNX (NASDAQ), the programmable-chip maker, appointed a new CEO, Moshe Gavrielov, to replace long-time CEO Willem R. Roelandts (served since 1996). Back in August Roelandt's announced his decision to resign as president and CEO upon the appointment of his replacement. The company's five month job search for Roelandt's replacement appears to have come to a good end. Roelandt will remain chairman of the board and has stated he intends to remain in that position for some time.

Gavrielov appears to have been a good choice. While not a specialist in programmable-chips he has extensive executive and high-tech experience under his belt which should serve him well in his new position. According to Electronics Weekly and the company's press release announcing the appointment,

Most recently, Gavrielov served as executive vp and general manager of the verification division at Cadence Design Systems. Before that he spent seven years as CEO of Verisity, where he grew the company from a $4m start-up, taking it through its initial public offering in 2001 to a $70m publicly-traded company, and ultimately to its acquisition by electronic design automation leader Cadence in 2005.

Gavrielov had an interview with EDN.com in which he elaborated about his background and experience and what he planned to do for Xilinx.

He spent ten years designing high-performance processors and peripherals. Then there was a long stay at then-LSI Logic, where, in Gavrielov’s words, he helped drive the transition from LSI as a company that supplied empty gate arrays to a company rich in IP and integration expertise. The third phase of Gavrielov’s career took place at start-up Verisity and then at acquiring company Cadence. “We recognized then that front-end logic verification had become the top problem in chip design,” Gavrielov said. “In fact, I think it still is one of the top problems.”

So other than general management experience, what does this background have to do with running a $2B, apparently maturing, fabless FPGA giant? Gavrielov sites an interesting parallel. “I think the opportunity for growth here is that FPGAs are becoming more and more relevant to a wider range of designers. But it’s not just about gates—it’s about the IP as well. In that way, Xilinx today is in a similar transition to the one LSI had while I was there: moving from a supplier of blank gates to also being a supplier and supporter of the IP that goes into the gates. But supporting a body of IP in the field is a non-trivial undertaking.”

So Gavrielov sees a three-fold challenge for Xilinx. First, it must maintain its pace in enlarging the capabilities of the underlying silicon. Second, it must build its portfolio of IP across a growing breadth of applications. And third, the company must continue to pour investment into its development tools, so they are able both to serve the needs of an increasingly diverse—and, one suspects, increasingly specialized and FPGA-naive—community of users and to continue hiding the growing complexity of the actual FPGA circuitry from those users.

Give Gavrielov some time to get his feet wet but his appointment could be just the right move for the company. He seems to understand what the firm needs and appears to have the skills necessary to grow the business.

For more:

TheStreet.com
D and R Headline News
Mercury News
San Jose Business Journal
Business Week blog
Programmable Logic Design Line

Add Another CEO Notch to Sub-Prime Crisis

According to a late Monday story from Kate Kelley of The Wall Street Journal,

James Cayne, the chairman and chief executive of Bear Stearns Cos., under fire from shareholders after the Wall Street firm was badly burned by the downturn in the mortgage market, is stepping down as CEO, say people familiar with the matter.

Nothing all that surprising when one considers Cayne's reputation as a hands-off executive who even during the height of the sub-prime crisis remained aloof while Bear Stearn's possible survival had been at stake. According to the Journal, Cayne will remain Chairman. Speculation continues that Alan Schwartz, Bear Stearns' president will take Cayne's place as CEO.

Stay tuned.

For more:

CNBC
Reuters
Portfolio.com
Bloomberg
Forbes
Market Watch
Guardian
Financial Times
CNN Money

More Sub-Prime Fallout - CIBC

Canadian Imperial Bank of Commerce CIBC CM (TSX) a company racked with financial and management difficulties announced today that Brian Shaw, chief executive officer of CIBC World Markets, would be replaced by TSX Group Inc. CEO Richard Nesbitt. The bank's Chief Financial Officer Tom Woods would replace Ken Kilgour as risk officer. The bank has had a huge exposure to sub-prime debt and had to act. According to a Streetwise blog story from Toronto's Globe and Mail newspaper,

Unlike Citigroup and Merrill Lynch directors, the CIBC board did not hold Mr. McCaughey (the CEO) accountable for the bank’s still-to-be-quantified sub-prime loses, with Mr. Kilgore and Mr. Shaw leaving in the wake of this hit. Directors now need to be asking whether the new executive team will be more adapt at steering clear of accidents.

According to a piece by Jonathan Ratner in today's Canada's Financial Post,

Dundee Securities analyst John Aiken said he was one of many that believed more management changes were needed at CIBC after an apparent disruption in its risk management policies led to an “incremental, outsized exposure to U.S. subprime real estate.”

It remains unclear whether the new management team is up to the job to straighten out the problems facing the bank. Stay tuned.

For more:

Financial News
Globe and Mail
Bloomberg
Reuters
Forbes
Dealbook
Canoe Money

CEO & CFO Turnover Comparisons for 2005, 2006 & 2007

Liberum Research has found that corporate management turnover in 2007 was slightly below the record levels registered for 2006 but remained very high and was far above the numbers recorded in 2005. 2007 CEO, CFO and C-level turnover totals registered an overall decline of 5%, 2% and 2% respectively from that of 2006. The actual CEO and CFO changes for 2007 overall, however, were far more "significant" and in many cases were far more high-profile for the companies involved than were those registered in 2006.

2007 turnover data began to trend upwards after the first quarter of 2007 concluded. The first quarter of 2007 recorded dramatic declines from the same quarter in 2006. CEO turnover declined 17%, CFO turnover declined 22% and overall C-level management declined 15% in the first quarter of 2007 as compared with the same categories in 2006. The last three quarters of 2007, however, trended upward and are expected to continue at a high level into 2008. Each of the last three quarters showed a similar pattern in overall management changes with the record level of turnover recorded during 2006. Turnover totals for the last three quarters of 2007 were nearly the same as those in 2006 (see the graphs below).

Red Bar 2005
Blue Bar 2006
Green Bar 2007

Red Bar 2005
Blue Bar 2006
Green Bar 2007

Red Bar 2005
Blue Bar 2006
Green Bar 2007

Liberum expects the overall level of management change to continue to remain high as we move through the winter. Liberum's research anticipates the credit crisis to continue to have an impact on CEO and CFO turnover for the next few months and potentially beyond.

Zale CEO Change - Update 1

Activist investor and former SEC Commissioner Richard Breeden has further increased his holdings of Zale stock. The additional increase in Breeden's holdings came after Neal Goldberg, the former president of children's retailer The Children's Place, was appointed CEO of Zale (see earlier blog post) on December 20th. CNN Money on January 2 reported,

Activist investor Breeden Capital Management LLC has increased its stake in Zale Corp. to 13.3 percent, according to a filing with the Securities and Exchange Commission Wednesday.

The Greenwich, Conn.-based investment fund reported owning 5.9 million shares, or a 13.3 percent stake in the jewelry store operator. In September, Breeden reported owning about 3.8 million Zale shares, or a 7.7 percent stake.

Speculation is running as to the reasons behind Breeden's increase in ownership. According to today's New York Post,

... (the increase) sparked speculation that Breeden is pushing Zale - the largest US jewelry chain by number of stores - to sell off assets and prepare itself for a sale to Signet Group. The British-based rival, which owns the Kay Jewelers and Jared chains, had pushed for merger talks with Zale in the spring of 2006, only to be rebuffed by Zale's board.

Stay tuned:

SeekingAlpha (Update 1/8/08)
BloggingStocks

CEO Watch - AMD, Hector Ruiz, Update 3

As AMD continues to struggle, CNET today reports that Dirk Meyer, AMD's President and Chief Operating Officer is being groomed to succeed Ruiz at some point. I hope if it is true, the change will be sooner than later. AMD needs new blood and it needs it now.

A little more:

EE times
Extremetech

Overstock - Management Turmoil Adds to Problems

Yesterday Overstock OSTK (NASDAQ) considered by many as one of the most problematic companies on the NASDAQ announced that co-founder, president and chief operating officer Jason Lindsey resigned and left the company's board of directors. The reasons supplied for his decision might be viewed with some skepticism. Overstock remains a company of interest to the SEC particularly statements made by its CEO, Patrick Byrne. Byrne is often cited in the media but rarely for good reasons.

To get a possible read on why Lindsey left check out Zac Bissonnette's piece today on BloggingStocks.

For more:

Barron's blog
WallStreet 24/7
Wired Blog