Management Turnover as Change Agent

Friday, November 13, 2009

EMS Technologies Makes Change at the Top

EMS Technologies EMLG (NASDAQ), the maker of software used in satellite and ground networks, on Wednesday announced the immediate resignation of Paul B. Domorski, as CEO and board member of the firm. In his place, the company selected Neilson A. Mackay, the company’s executive vice president and chief operating officer. The announcement came shortly after the firm’s stock suffered a 28% fall after the company announced a sizeable decline in net profitsPaul B. Domorski retiring CEO for the third quarter. According to a story by Peralte C. Paul for the The Atlanta Journal-Constitution,

John B. Mowell, EMS Technologies’ chairman, said the change is not because of the company’s recent earnings performance. The company reported last week it made a third-quarter profit of $5.3 million, down from $6.1 million a year earlier.

EMS Technologies One Year Stock Performance“It was a tough decision; it was not instigated by earnings,” Mowell said in an interview Wednesday. “This is not a reaction to an over-weakness on the part of Paul. He is a great leader, and he is a great man.”

The chairman then went on to state,

… the board opted to put Mackay at the helm because the company needs a leader with the technology and engineering background in addition to the business credentials.

It appears obvious that despite what the chairman said, the change was precipitated by the significant earnings decline and poor performance of the firm during the third quarter. The change from within may actually bode well for the firm going forward. Mackay has been with the firm for some time and understands the business. Domorski was not the only key change at the firm over the last number of months. Back in August , David A. Smith abruptly resigned as vice president and general manager of the company’s Defense and Space Division.Keep a close eye on the firm for the next couple of months.

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