Management Turnover as Change Agent

Friday, February 22, 2008

Activist Shareholders Push out Another CEO

Duckwall-Alco Stores DUCK (NASDAQ), a struggling rural retailer, announced the immediate resignation of president and CEO Bruce Dale, who had joined the company in 2oo5. SVP and CFO Donny Johnson was appointed interim CEO until a permanent replacement is found. Dale's resignation comes three days after Raymond French and Strongbow Capital who together hold over 14% of Duckwall-Alco voting stock in an SEC filing said,
... they intended to put up nominees at the upcoming annual meeting “to replace certain members of the board” – including chairman, Warren Gfeller – and wanted director Royce Winsten named chairman.

They also said the board has not taken satisfactory steps to improve shareholder value and that the makeup of the board should change in order for shareholders to receive a "reasonable return on their investment."
As the retail related market continues to reel under the pressures of a weakening economy, more and more pressure is being placed on top executives to perform. The increased pressure is often particularly forceful from large shareholders who find their investment values shrinking. Expect more changes at the firm.

For more:

Witchita Eagle 3/6
Press Release
MSN Money
CNBC
Houston Chronicle

1 comment:

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