Recommended Reading - GE executive: Reorg will simplify conglomerate

Stephen Singer wrote a story that appeared in Business Week that examined the recent organizational changes at General Electric GE (NYSE).  GE announced recently it would reduce the company into four businesses from six as a way to ultimately increase efficiency and improve shareholder value. The gist of the article focused on the explanations given by John Rice, GE's vice chairman and president of the newly created GE Technology Infrastructure unit about the purposes behind the latest reorganization.  Rice, a star at GE, is being touted by some as a possible successor at some point to current CEO, Jeffrey Immelt.  Immelt has found himself under increasing pressure from shareholders (see earlier blog).  

Check out the Business Week story for a sense of Rice's talent. 

More Management Turmoil at Children's Place

The Children's Place PLCE (NASDAQ) continues to face management unease.  The company's CFO, Richard Paradise, who has been in his job for less than one year, announced he would be leaving August 1, to pursue another business opportunity.  He joined the company back in November 2007.  Paradise joined the firm soon after the company's former CEO and largest shareholder, Ezra Dabah, was pushed out of his job.  

Since the CEO change at the firm back in September 2007, the company has faced a number of  executive changes and growing financial pressures (see earlier blogs). Dabah, despite being out as CEO has taken steps to try and take over the firm.  According to Reuters,

Children's Place has been weighing a possible sale of the company under pressure from its largest shareholder, board member and former Chief Executive Ezra Dabah, who owns a 17 percent stake in the company.

After a difficult period following Dabah's resignation as CEO, the company has managed to stabilize.  Paradise's resignation announcement raises another potential red flag.  Susan Riley, the EVP for Finance and Administration would takeover Paradise's position and would continue to perform her other responsibilities.  

Keep a close eye on the company.

For more:

Just-Style

MarketWatch

CEO Watch - The Inevitable is Inevitable - Alcatel-Lucent CEO and Chairman Out

Probably a year overdue (see earlier blogs), the CEO and Chairman of French telecommunications giant Alcatel-Lucent ALU (NYSE), Patricia Russo and Serge Tchuruk have announced their resignations.  Chairman Tchuruk will step down as of October 1 and CEO Russo will leave by the end of the year or earlier should a replacement be found.  Along with the departure of Russo and Tchuruk, will be board member Henry Schacht, a former Lucent CEO.  

Alcatel-Lucent which merged in late 2006 has been struggling since its inception.  The company just announced its sixth straight quarterly loss.  According to Information-Age,

...the company revealed that it lost €1.1 billion during its second financial quarter of the year – its sixth consecutive quarterly loss. That is roughly three times the €336 million loss that Alcatel-Lucent reported in the same quarter of last year.

Alcatel-Lucent's ill-fated CDMA division continues to be its biggest loser. The company wrote down the value of its division that sells technology based on t

he wireless transfer protocol by €810 million.

Stacey Higginbotham from the GigaOm blog summed up the company's situation succinctly,

Alcatel-Lucent is seeing falling demand for its equipment while its carrier customers contemplate the slow migration to 4G technologies such as LTE and WiMax. The next generation networks are coming, but are still several quarters out with LTE networks coming on line in 2010 and full deployment closer to 2012. 

WiMax is growing now, but is a smaller market. Another wrinkle is that some carriers such as Vodafone in the UK are content with their 3.5G networks, and don’t plan to move to LTE for even longer.

Russo who is known as a strong figure continues to make a case for herself.  She was quoted in today's corporate press release as follows,

“I am very pleased with the progress we are making especially in light of a difficult market environment,” ...  “Our strategy is taking hold and our results are demonstrating good operational progress.  That said, I believe it is the right time for me to step down.  The company will benefit from new leadership aligned with a newly composed Board to bring a fresh and independent perspective that will take Alcatel-Lucent to its next level of growth and development in a rapidly changing global market. "

While there may be positive news about the company it is very small and limited.  Chairman Tchuruk also gave his own pitch for the work the two have performed particularly in relation to the giant merger.  He is quoted in the press release in which he states,

“The merger phase is now behind us.  I am proud that Alcatel-Lucent has become a world leader in a technology which is transforming our society.  It is now time that the company acquires a personality of its own, independent from its two predecessors.  The Board must also evolve and the Chairman should give the first example, which I have decided to do,”...

For the moment, the market was very happy to see the announced executive changes.  In early trading the company stock was up.  The real question is who the company can find to replace the two.  Today's management change announcements can be viewed as acknowledgement of the merger's failure.  While so far, both Russo and Tchuruk failed to right the ship and get the real savings from the merger they intended, the problems facing the telecommunications sector still mean there is potential for this merger to succeed.  Hopefully, the right management may still have a chance to turn the company around.

Keep a close eye on who the company chooses to replace the Russo and Tchuruk.  The company needs to find executives with deep knowledge and expertise in the telecom sector.  While financial expertise is essential Telecom expertise is paramount.  Stay tuned.

For more:

BusinessWeek

International Herald Tribune

NY Times DealBook

Reuters

MarketWatch

Yahoo

TheStreet.com

PC World

AFP

Times Online

International Business Times

BloggingStocks

TheDeal.com

NPR Marketplace (audio)

Recommended Reading - Why Apple Must Tell its Story, AdAge

Michael Bush of AdAge.com wrote a well thought out piece on the unusual nature of Apple and its famed CEO, Steve Jobs. While the news on Jobs' health appears far better lately than was thought even a week ago (read earlier blog), the company needs to develop a succession plan.  The question remains how can it do it in light of the current circumstances and the fact that Apple previously pushed Steve Jobs out as CEO once before.  The piece is a worthwhile read.

More Changes at Wachovia - More to Come

Now that Wachovia has it's new CEO, Robert K. Steel, in place (see earlier blog)  more top management changes have already begun.  Yesterday, long-time employee and current CFO, Thomas J. Wurtz, announced he would be stepping down as soon as his replacement was found.  Steel, who is under intense pressure to find ways to right the ship, is already hard at work putting his his own on stamp on the firm.  

One can expect continued management changes at the top as Steel looks to get his own team in charge.  According to a story by David Mildenberg of Bloomberg,

"Wurtz is part of the collateral damage at Wachovia and I expect more is coming," said Gerard Cassidy, an analyst at RBC Capital Markets.

Former chief financial officer Robert Kelly, who was Wurtz's predecessor, "could stand up to Ken Thompson but the analyst community never had that feeling with Tom Wurtz."

Paul Davis of the American Banker stated,

Wurtz was a key public defender of the company's October 2006 acquisition of Golden West Financial Corp., a transaction that largely contributed to G. Kennedy Thompson's ouster as Wachovia's chief executive officer in June.

As executive and lower level changes continue at Wachovia there is a great deal more needed to right this ship.  Stay tuned.

For more:

Reuters

Times Online

Orlando Sentinel

Tampa Bay Journal

MarketWatch

Microsoft's Loses Another Top Executive

As Microsoft's MSFT (NASDAQ) Web plans continue to flounder (Yahoo, search, etc.,) more complications have  appeared.  The primary person behind Microsoft's efforts to acquire Yahoo, Kevin Johnson, The Platforms and Services Division President will be leaving after sixteen years to become Juniper Networks JNPR (NASDAQ) new CEO.  Was he pushed or did he jump?  According to Zachary Rodgers of ClickZ Network,

Johnson may have taken the fall for Microsoft's unsuccessful (to date) exertions to acquire Yahoo. The Wall Street Journal reported late yesterday that CEO Ballmer has grown increasingly frustrated with his own senior executive management's maneuverings throughout the negotiation process, and Kevin Johnson has been fingered as a major shaker in that process.

According to Kara Swisher of the Wall Street Journal's All Things Digital,

As the president of its Platforms and Services Division, the smooth Johnson has been trying, without much success, to beef up the software giant’s efforts in the Web space, especially in the online advertising arena.

He and Microsoft have had a little problem with that, largely due to an immovable object called Google. 

In an attempt to make an end run around the search behemoth, Johnson led Microsoft’s attempt to take over Yahoo, the #2 player in the search and search advertising space.

The six-month effort, according to many sources at Microsoft, has led to a great deal of unrest at the company, including ire aimed directly at Johnson because of his perceived influence on CEO Steve Ballmer.

With Johnson's departure, Steve Ballmer, Microsoft's CEO, announced a new reorganization of the Windows and Online Services Divisions (see press release for details).  The Online Services division will now stand on its own.  According to the release,

Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live...

In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search ... In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft’s search, MSN and ad platform engineering efforts...

In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS)...  McAndrews will continue to focus on the display advertising opportunity for Microsoft, driving execution and integration of advertising assets, including recent acquisitions such as Massive Inc., Navic Networks, ScreenTonic SA and YaData Ltd.

Microsoft has been looking rather anemic of late.  We will just have to see how this all plays out.  Speculation is already beginning to appear as to who will replace Johnson at Microsoft.  Kevin Liu of Reuters wrote piece in which Jon Miller, the former AOL executive and a possible Icahn candidate to replace Jerry Yang at Yahoo should he ultimately prevail, might be considered for Johnson's former job.  Whatever the choice for now, Google must be singing a happy tune. 

For more:

Silicon Alley Insider

PC Pro

Barron's Blog

CNN Money

Guardian

Seeking Alpha

Update to Steve Jobs' Health- New York Times

John Markoff of the New York Times wrote a story today that might help to allay some of the fears concerning Steve Jobs' health that I referred to in a earlier blog.  

If concerned, read the New York Times piece.

Recommended Reading - Germany's cuddly corporate world gets shaken up

David Gow of the U.K.'s Guardian newspaper wrote a clever article discussing the growing influence in Germany of Maria-Elisabeth Schaeffler, a women  who owns, with her lawyer son Georg, the engineering group, the Schaeffler Group. Under Ms. Schaeffler's direction her private company has made an audacious hostile takeover attempt to acquire German public tire and car components manufacturer Continental Group CON (DAX).  

The piece is a worthwhile read and provides an interesting take on Ms Schaeffler financial/business acumen and the growing influence of women business leaders in Europe.  Check it out.

Recommended Reading - Lehman Fault-Finding Points to Last Man Fuld as Shares Languish

Yalman Onaran of Bloomberg put together a well researched article that examines Lehman CEO Richard Fuld's approach to the company's current problems. The article is a definite read for anyone interested in Lehman's troubles and what its long term CEO is doing to save himself and the firm.

A bit more:

Dealbreaker

Recommended Reading - Apple-A-Day Talk, Investors Await Earnings and Jobs' Health

Back in June, Steve Jobs', Apple's star CEO, health appeared to become a story after he made a major presentation at the Apple Developers Conference.  At the time of the presentation he looked very gaunt.  Back in 2003, Jobs had a form of pancreatic cancer that had been successfully treated.  Since Jobs' presentation in June, negative rumors began spreading about his health.  Apple finally responded to the rumors by saying Jobs was healthy but at the time of the presentation had been taking antibiotics to treat a bug.  Earlier today the New York Post raised the issue again.  

I do not put any credence to the rumors but decide for yourself, read the Post story.

Update to Recent VMware CEO Change

Earlier in the month, I wrote about (view blog) the surprise CEO change at VMware VMW (NYSE) in which Paul Moritz, the former high-level Microsoft executive and at the time, head of Pi a subsidiary of EMC, was appointed to replace Diane Greene as VMware's CEO.  The change came after VMware's high flying stock which reached $130 shortly after its IPO back in August 2007 had dropped down into the $30 range.  To apparently appease VMware's troops and avoid a large brain drain, the company under Moritz has announced a new plan to assist VMware employees with the value of their stock options.  According to a story in InfoWorld,

The company disclosed in an SEC filing that it plans to offer its employees the opportunity to exchange their post-IPO ("underwater") stock options for an equal number of new options. The exercise price of the new options will be the stock price at the close of trading on the day immediately following the date that the exchange is completed. This option belongs to all U.S. based non-executive employees. Non-U.S. employees will be granted a to-be-determined proportionate number of restricted stock units after the exchange offer for U.S. employees has been completed.

Participation in the exchange is completely voluntary. Doing so may get the employee out from under water, but taking the company up on the deal will also restart the employee's option vesting schedule. Depending on the employees' goals, they may choose not to participate.

VMware is gearing up to compete with Microsoft who has produced its own product to compete directly with VMware's software.  At a minimum, Moritz recognizes the challenges he faces and is taking some concrete steps to address them.  Time will tell.  Stay tuned.  

CEO Watch - Hector Ruiz, AMD, Update 7

It's official and about time, AMD's CEO, Hector Ruiz, is finally out. We have been expecting this change for a long time (see earlier blogs).

AMD's Board of Directors after the company announced another disappointing quarter elected Dirk Meyer an employee of the firm since 1996 and the company's president and chief operating officer as Ruiz's replacement as CEO. Meyer was supposedly being groomed to be Ruiz's successor but the change took far too long. Ruiz will become executive chairman of AMD and executive chairman of the board. According to a story by Anton Gonsalves for Information Week,

Board member Robert Palmer said in a statement announcing the executive shuffle that Meyer's election to CEO is "the final phase of a two-year succession plan developed and implemented jointly by AMD's board of directors and executive team. "Dirk's extensive experience as a business leader and his notable engineering accomplishments before and during his 12 years at AMD make him ideally suited to build upon the foundation Hector created and lead AMD," Palmer said. Ruiz praised Meyer as a "gifted leaders who possesses the right skills and experience to continue driving AMD and the industry forward. I am placing the company in excellent hands."

Meyer has an extremely difficult job ahead of him. AMD continues to fall behind Intel and is struggling to find a strategy to turn itself around. According to the Information Week story Gonsalves writes,

AMD is in the process of trying to reshape its business and differentiate its product line by integrating the graphics technology obtained through the 2006 acquisition of ATI Technologies with AMD's general-purpose x86 microprocessors. "My immediate priority is to work with the leadership team to accelerate this transformation," Meyer said.

Keep a close eye on the firm.

For more:

LA Times (7/18)

Newsweek (7/18)

Globe and Mail Canada (7/18)

BloggingStocks
CNET
Seattlepi.com
ZDNet
Times Union
Guardian UK

Recommended Reading - U.S. Downturn Boosts Shareholder Activism

Forbes wrote an insightful synopsis of a recent study conducted by Oxford Analytica on the increasing influence of activist shareholders as the U.S. economy and American corporations face a slow down in demand. The article pays particular attention to executive compensation and corporate governance issues.

CEO Watch List - (Recommended Reading) Rick Wagoner, GM, Update 6

As General Motors GM (NYSE) continues to bleed the company is finally sending out signals that it understands the difficulties it faces.  As is so often the case with GM the drastic measures it is now taking may still be too little and too late.  Rick Wagoner GM's CEO continues to insist he is on the right road and understands what he needs to do to right GM.  I remain skeptical as I have in my previous blog posts.  Alex Taylor III has written another fine story for Fortune outlining the new steps being undertaken by Wagoner and his team to turn GM around.   According to Taylor Tuesday's announcement of GM changes illustrate,

... GM is reacting to events instead of anticipating them. Nowhere in Tuesday's announcement is there any mention of the structural changes that will allow GM to compete with a smaller market share shorn of its high-profit light trucks. No product lines were killed, no brands were euthanized, no big budget items wiped off the books. GM still has too many dealers selling too many individual models - and now it has even less money than before to market them.

Wagoner likes to say that nobody could have foreseen the spike in oil prices that made GM's old business model in North America obsolete. But he might have picked up a report titled "In the Tank: How Oil Prices Threaten Automakers' Profits and Jobs" that was produced by research operations just a few miles from GM's headquarters, in cooperation with the Natural Resources Defense Council.

It predicted that "sales, profits, and American jobs are at risk if Detroit automakers continue with their current business strategy in the face of higher oil prices."

That report was published in July 2005 - exactly three years ago.

Wagoner may survive his position but at what continued cost.  As GM workers, shareholders and the U.S. economy suffer the U.S.' largest automobile company should really be planning for the future rather than just reacting to events.

For more:

Financial Times

Bloomberg

Guardian UK

Businessweek

Recommended Reading - Bank Chiefs in Europe Face the Axe, International Herald Tribune

As the credit/financial crisis continues to fester European Bank executives seem to be finding themselves in a similar position with their counterparts in the United States who have been packing their bags for the last number of months.  According to a story by Julia Werdigier for the International Herald Tribune,

For the most part, chief executives at European banks have been able to hold on to their jobs while reporting billions of dollars of write-downs, even as they watch their U.S. counterparts clearing their desks.

But as financial markets sour and investors become increasingly concerned about further write-downs, pressure on at least two executives on the Continent is mounting.

Check out the problems bank execs in Europe seem to be facing.

Wachovia Turns to Robert K Steel Seasoned Treasury Official and Former Goldman Vice Chair

Wachovia WB (NYSE) late Wednesday announced the selection of Robert K. Steel, the under secretary for domestic finance for the United States Treasury.  It appears Wachovia, who has lost over 60% of its share value in the last year, chose to go with a risk manager with government/regulatory expertise as its top executive rather than a commercial/retail banker. While Wachovia is a large retail bank the decision makes a lot sense on a variety of different levels.   

Steel has been a close confidant of the current Secretary of the Treasury, Hank Paulson who had previously been the former Chairman of Goldman Sachs. Steel is also a former key player with Goldman.  He left the firm as Vice Chairman in 2004 after Lloyd Blankfein solidified his position at the top of the firm.  Steel worked for Goldman starting in 1976 and moved rapidly up the ranks.  According to a story by David Mildenberg and Ari Levy of Bloomberg in his position at Treasury, 

Steel helped hammer out the agreement that culminated in JPMorgan's purchase of Bear Stearns Cos.

Analysis of Steel's selection has been all over the map and will continue to do so for the next number of months.  Many specialists have expressed their concern over his lack of retail and commercial banking expertise while others find his regulatory expertise/Washington connections extremely important.  What was even more fascinating, however, have been the many comments offered by people that have worked with him or known him concerning his special talent to work with others and his unique abilities to multitask while handling extremely difficult challenges all at once.  Steel is the Chairman of the Board of Trustees of Duke University his alma mater.  According to a story by Rick Rothhacker for The Charlotte Observer,

Steel joined Duke's board of trustees in 1996 and was chairman of the committee that selected Richard Brodhead as president in 2003.

In that role, Steel stood out for his ability to quickly assess the university's needs and get people working toward a common goal, said Sara Sun Beale, a Duke University law professor who worked with him on the search committee.

"He has a great ability to work with a wide range of people and move a group forward," Beale said.

At the same time, she said, it is clear he would work on several projects at the same time.

"You will be working on an assignment, and he is working just as hard as you are on the same assignment, and then you realize he is also working on four other things," Beale said. "Then you find out he is equally effective in those areas, too. It's pretty amazing."

At first glance, Steel's appointment seems to confirm statements from Chairman Lanty that Wachovia intends to remain independent.  Lanty made this statement as speculation continued to grow that the fourth largest bank in the United States was looking to be acquired.  But speculation on Wachovia's status as an independent company will surely continue.  Steel is a former Goldman Sachs executive.  Goldman of late has been intimately involved in many of the problems facing the bank and is even considered one company that may acquire the firm. Goldman has been hired to examine the bank's loan portfolio and has been instrumental in helping the firm raise money this year.  According to the Biz Journal,

The choice of Steel strikes some analysts as interesting given that Wachovia has hired Goldman to analyze its loan portfolio and to "evaluate various alternatives."

Goldman helped the company raise $8 billion earlier this year through the sale of common and preferred stock.  

Speculation also continues that JP Morgan might push to acquire Wachovia.  Steel has a great deal to learn in a very short time frame.  Considering the problems Wachovia faces in this extremely difficult marketplace, I am impressed with his selection.  Hopefully, he has sufficient time to help the company without being forced to make hasty decisions that could backfire.  Stay tuned.

For more:

Guardian UK

Forbes (AP)

Wall Street Journal

Reuters

New York Times DealBook

Seeking Alpha

CEO Watch List - Wachovia, Update 2

Rick Rothacker of The Charlotte Observer wrote a story today in which he posited what he thought were thirteen potential candidates to replace former Wachovia WB (NYSE) CEO, Ken Thompson, who was forced out as CEO back in early June (see earlier blog). Rothacker's piece also focused on the stealth aspect of the search for Thompson's replacement. The story opens with the following question:

Who's the boss?

That's the big question hanging over Wachovia Corp., as the
Charlotte bank's search for a new chief executive extends beyond a
month.

The uncertainty is weighing on employees as well as investors. The
stock is down nearly 35 percent since the board ousted Ken Thompson on June
1...

Check out the list of potential contenders. Does anyone know of other potential candidates?

Activist Shareholders Key in Charming Shoppes CEO's Demise

Charming Shoppes CHRS (NASDAQ), the embattled women's retailer, announced the immediate resignation of its CEO, Dorrit Bern. Bern, who originally came to the company back in 1995 as president, CEO and vice chair of the board, has been under growing pressure from activist investors unhappy with management and the company's overall performance. While activist shareholders (Myca Partners and Crescendo Partners) have been rightfully concerned with the company's performance over the last year, Bern was instrumental in growing the firm from the time she first arrived. According to the company's website, under her leadership corporate revenues increased from $1 billion to $3 billion by 2006. According to the company's press release,

"Dorrit and the Board agreed that now is the appropriate time for a change in leadership of the Company. Her leadership resulted in the repositioning of Charming Shoppes as a multi-brand, multi-channel specialty apparel retailer, and the nation's leader in women's specialty plus apparel."

Growth, however, is now at a standstill and the firm has been facing increasing problems. According to Women's Wear Daily,

The retailer's stock fell 60 percent last year.

Bern has initiated a series of changes over the last year and a half including reductions in staff and management and better inventory control. While the changes were needed they have not been viewed by many analysts and shareholders as sufficient. While earnings have continued to remain anemic Charming Shoppes took forceful steps to fight off attempts by activist shareholders to make changes on the company's board and management. The company even initated a lawsuit but in the end activist shareholders seemed to have gotten the upper hand. After back and forth negotiations the company caved and allowed two activist sharehodler candidates to be elected to the board.

As part of the company's management change announcement, the firm made recently appointed Chairman, Alan Rosskamm, the interim CEO. Rosskamm was previously the Chairman and CEO of Jo-Ann Stores and has been a long time member of Charming Shoppes' board. Charming Shoppes has a great deal more to do to help solidify its weakening retail position.

Keep a close eye on who the company comes up with to permanenetly replace Bern and what role the key activist shareholderes play going forward. There are likely more changes to come.

For more:

CNN

Philly.com

MSN Money

Triangle Business Journal

Portfolio.com

VMware CEO Out, Former Microsoft Exec In

In a surprise announcement VMware VMW (NYSE), the company that creates and develops software designed to manage virtual machines, made public the immediate resignation of its co-founder and CEO, Diane Greene. The resignation comes in the wake of the company's latest announcement that its 2008 sales will be lower than earlier projections. In Greene's place, the company has selected Paul Moritz, a former Microsoft executive who retired from the firm in 2000 after fourteen high-profile years with the company. According to the Silicon Valley/San Jose Business Journal during his time with Microsoft,

Moritz managed the development and marketing of many of the company's major products, including Windows 95, Windows NT, Database, Tools and Applications.

In 2003 he founded Pi Corp., a startup software company focused on building Cloud-based solutions. Pi was acquired by EMC Corp. in February 2008.

In the company press release, VMware did not give a reason for the departure of Greene. VMware had been a high flying stock at the time of its initial IPO back in the summer of 2007. Even before the IPO, VMware was considered a star in the computer virtualization space. The company remains the leader in the field but has found itself lately in competition with a number of the biggest players including Microsoft, Oracle, Dell, Red Hat and many others. To make matters worse many companies have turned to open source software as a way to manage virtualization an approach that VWware has refused to take and has helped to place the firm at an even further potential disadvantage going forward.

Greene's departure may be due to lower sales, growing competition or the fact that the firm needs new executive blood for it to find a way to successfully compete and remain on top. VMware remains majority owned by EMC which very likely had a hand in today's management change.

This is definitely a company that should be watched closely as new management takes over.

For more:

ValleyWag (7/9)
Market Watch (later in day)

Giga Om

CNET
Bloomberg
Reuters
Market Watch
Barron's Blog
MSN Money

Avanex CEO Terminated Shortly Before Shareholders Meeting

Avanex Corporation AVNX (NASDAQ), a global provider of Intelligent Photonic Solutions(TM) designed to meet the needs of fiber optic communications networks announced today the termination of its president and CEO, Jo Major, PhD.  Dr. Major will also be leaving the board. In addition to Major's termination, the company's CFO, Marla Sanchez, also resigned her position. 

According to the company's press release the termination was,

... due to the inability of Dr. Major and the Board of Directors to work together effectively. 

... The departure of Dr. Major and Ms. Sanchez is not related to the Company's operational performance or financial condition. The Company is reconfirming its fiscal fourth quarter revenue guidance of between $50.0 million and $53.0 million. In addition, the Company anticipates positive cash flow for its fiscal fourth quarter.

In the interim period the company has appointed,

Dr. Giovanni Barbarossa as Interim Chief Executive Officer. Dr. Barbarossa has worked at Avanex since February 2000 and has served as Senior Vice President and Chief Technology Officer since May 2002. Previously he ran the Active Component Business Unit. Dr. Barbarossa joined Avanex prior to its initial public offering and has been a member of the executive team for over six years.

 The company has already initiated a search for permanent replacements through a board committee.  Paul Smith, a member of the board has been appointed as Noon executive Chairman of the Board.  It is difficult to determine from available information what exactly was the reason behind Dr. Major's termination.    The company has been facing serious problems.  According to RTT News,

The company last month regained Nasdaq compliance. In March, Avanex stock closed below $1 per share for 30 consecutive trading days, below the minimum required under Nasdaq rules. 

Avanex is expected to hold its annual stockholders meeting July 9, where shareholders will vote on a proposed reverse stock split. The reverse stock split will help boost the value of each share, thus making it easier for the company to stay listed on the exchange.

Keep a close eye on the company as it gets ready for its annual stockholders meeting and what actually comes out of the meeting.

For more:

CFO.com

Reuters

Barrons Blog

East Bay Business Times

CEO Watch List - Sir Stuart Rose, Marks and Spencer, Update 2

Marks and Spencer MKS (LSE) surprised the British market earlier today with the announcement of a substantial drop in retail clothing and food sales.  The well known retailer under the firm hand of Sir Stuart Rose, the company's CEO and Chairman, saw its shares drop precipitously earlier today after the sales announcement.  According to Grame Wearden who a story for the U.K.'s Guardian,

Shares in the group, Britain's biggest clothing retailer, plunged by almost 25% to 240p today after it warned that profits will be hit by the slowdown in trading, which chief executive Sir Stuart Rose warned could last another two years. Analysts called the statement, which was rushed out this morning, a "significant profits warning"

.... Today's plunge puts M&S shares at their lowest level in four years, and wiped around £1bn off its market capitalisation. The company is now worth just over £4bn. Finance director Ian Dyson insisted that M&S is not planning to cut its dividend.

Rose, Marks and Spencer's golden boy (CEO), may actually find himself in some trouble now that sales have dropped so much.  Last month, I wrote about the criticism the firm and its board received for making Rose the company's chairman in direct conflict with the UK's executive governance recommendations. 

Keep a close eye on Marks and Spencer and what might happen with Sir Stuart Rose.

For more:

Times Online (7/3 update)

Financial Times

Times Online

Reuters

BBC

CEO Watch List - Wachovia Bank, Update 1

Wachovia WB (NYSE), which recently forced its CEO, Kenneth Thompson to retire (see earlier blog), is currently on the hunt for a permanent CEO replacement. According to a story by Anthony Currie in Breakingviews.com Wachovia needs to find a replacement and needs to do it quickly. In the piece, Currie conjectures on potential candidates that might be under consideration. Check it out.

For more:

NY Times DealBook (7/2)