Management Turnover as Change Agent

Friday, December 17, 2010

CEO Watch - William C. Weldon, Johnson and Johnson, Update #2

Back in late September we examined for the second time the problems William Weldon, Johnson and Johnson’s JNJ (NYSE) CEO, faced after firm encountered a spate of major over the counter drug recalls. Johnson and Johnson under Weldon’s leadership has not done a great job in handling these problems and for that matter, continues to find itself facing new problems. Just recently one of the firm’s subsidiaries had to recall one of the firm’s over the counter antacid products, Rolaids. Up to this point the board has appeared to support Weldon but we finally Alex Gorskyhave seen some action in this area. Earlier this week J and J, as reported in the Wall Street Journal, announced some management changes that have increased the battle for Weldon’s succession. According to the Journal,

J and J, New Brunswick, N.J., named Alex Gorsky, head of the medical devices and diagnostics unit, and Sheri McCoy, who heads the pharmaceutical unit, as vice chairmen of the executive committee and members of the office of the chairman, effective Jan. 3, 2011.

The race to succeed Weldon had previously appeared to be narrowed to Gorsky and McCoy in September when Colleen Goggins said she planned to step down as head of J and J’s third major unit, the consumer healthcare business. The consumer unit has been beleaguered by a series of product recalls due to quality lapses.Sheri McCoy

Johnson and Johnson must find new ways to get its house in order. Despite good financial results the continuing recall problems could ultimately have a very adverse impact on the firm going forward. Stay tuned as succession plans appear to be moving full steam ahead.

Monday, December 6, 2010

Against the Grain - Pfizer CEO Resigns Unexpectedly

Jeffrey Kindler, Pfizer’s PFE (NYSE) CEO for the last four years, announced his resignation on Sunday. The firm announced that Kindler would be replaced with longtime employee and executive, Ian C. Read. Kindler’s weekend resignation announcement has been interpreted by many as an ouster. Pfizer has been languishing for sometime under Kindler’s tutelage. This has all been happening while many of the other big pharma companies have been doing quite well. Despite a major reorganization and tremendous acquisitions (2009 acquisition of Wyeth Drugs) while in charJeffrey Kindlerge, Kindler, a lawyer by trade with a focus on sales, has found himself under pressure from shareholders and apparently the board. While in charge, Kindler saw a number of research related failures with regard to potential blockbuster drugs and has been in charge asIan C. Read major patented drugs will see their protection expire shortly, e.g., Lipitor.According to the company’s press release Kindler was quoted on the change as follows,

My nearly nine years at Pfizer and, particularly the last four and a half as CEO, have been extremely exciting and rewarding. I feel our team can proudly boast of some transformational accomplishments. However, the combination of meeting the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demanding on me personally. Now that we are about to complete a full year of operating Pfizer and Wyeth together, with our world-class team fully in place, I have concluded the time is right to turn the leadership of the company over to Ian Read. Ian is an outstanding and experienced pharmaceutical executive who I know will make the next phase of the company’s future a successful one. He is more than ready to take on these responsibilities and I am excited at the opportunity to recharge my batteries, spend some rare time with my family, and prepare for the next challenge in my career.One year stock performance of Pfizer

The sudden change at Pfizer seems to make a great deal of sense. The appointment of Read, an in-house executive with vast experience, is the right type of change for such a large company that needs to get back down to basics on all its different business fronts. Keep a close eye on the firm as we move forward. Read is already in charge.

Monday, November 15, 2010

InfoSpace Fails to Meet Wall Street Expectations - CEO Leaves

InfoSpace INSP (NASDAQ), which was originally formed back in 1996, has gone through a number of transformations over the years. Prior to the Dotcom bust, the company was a high flier, after the bust the firm came way back down to sea-level. The cWilliam Lansingompany operates a number of online search services that rely on metasearch technology. InfoSpace primarily serves content providers and a significant portion of its business is focused on the mobile space. Just recently, the company released its earnings for the third quarter which was disappointing and held an earnings call (Earnings Call transcript via Seeking Alpha). Shortly after the Earnings Call its CEO, William J. Lansing stepped down after only 21 months in the position (see the 8k). The company immediately selected William J. Ruckleshaus, a member of the firm’s board and a former CFO of AudienceScience and SVP at Expedia, to serve as the firm’s interim CEO until a successor could be found for Lansing.

Some people have looked at Ruckleshaus’ selection as an attempt by the firm to pursue more acquisitions (sInfospace One Year stock Performance - Source: Bigcharts.comee a piece by John Cook on Seattle’s Tech Flash). I’m not quite as optimistic as Mr. Cook. Investors should keep a close eye on the firm and the steps Ruckleshaus takes over the next few months and also who the firm ultimately chooses to take over as the new CEO.

Wednesday, October 13, 2010

Quarterly Executive Turnover Continues to Decline While Overall Unemployment Remains High

Executive turnover has continued to decline throughout the economic and financial crisis and even as the recession ended according to the official proclamation by the National Bureau of Economic Research. Liberum Research’s latest quarterly turnover numbers for CEOs, CFOs, Board of Directors and C-level executives (defined to include CEOs, board of directors, CFOs, COOs, down to VP level) continued to show a drop in turnover for all key categories for the third quarter of 2010. The declining trend in executive turnover has continued since the first quarter of 2008 for all key executive turnover categories (see the CEO, CFO and C-level graphs below for quarterly turnover comparisons). While the first three quarters of 2010 continued to show significant declines in executive turnover, particularly when compared with the first, second and third quarters of 2009, we are beginning to see the overall executive turnover declines slowing when the quarterly figures are compared with each previous quarter of 2010.

  • Third quarter 2010 CEO changes dropped 27%, CFO changes dropped 8% and overall C-level changes for the third quarter dropped 32% respectively when compared with the third quarter totals for 2009.
  • The drop in changes for the third quarter of 2010 was much smaller when compared with the second quarter totals for 2010 - the drop was 21% for CEOs, 7% for CFOs and 6% for overall C-level changes.

While monthly executive turnover numbers have been smaller since early 2008, the investment opportunities they represent are still quite significant. Below Liberum put together three graphs representing the total executive related changes (CEOs, CFOs and C-level changes) by quarter for 2005 through the third quarter of 2010.

Total CEO Quarterly Changes by Years 2005 - 2010 -

Total Quarterly CFO Changes 2005 - 2010 -

Total C-level Changes by Quarter for 2005 - 2010 -

Friday, October 1, 2010

HP Selection of New CEO Slammed by Analysts and Market

Yesterday’s long awaited announcement on who would replace Mark Hurd as Hewlett Packard’s HPQ (NYSE) CEO went down with a thud. The selection of Leo Apotheker, a former short lived CEO of SAP, was not hailed by the market nor many analysts. I am on the other side of the fence on this appointment. I think HP’s board has come up with a surprisingly excellent choice.While ApotheLeo Apotheker, New HP CEOker was not very successful while CEO at SAP he faced a great deal of opposition within the organization and more than likely learned what he would need to do to be successful a second time around. SAP’s culture did not fit his needs for change. He should be able to make more change at HP than he was able to accomplish at SAP.

HP’s board appears to have gone strategic in its appointment. Its decision to go outside the firm for its selection should in the long run work out. Apotheker has the right background to help HP move into the software side of the industry in a big way without seriously jeopardizing its current bread and butter businesses. Who knows he might even move to go for an acquisition of SAP or some kind of alliance. If he can manage to keep many of the key players currently at HP and work with them to get the firm’s overall strategy right, he has a great chance at being very successful. He is a strategic thinker and he understands technology.

Shareholders and investors need to give him time to get up to speed. Stay tuned this latest selection may turn out to be a really winner despite the conventional wisdom. One year stock performance of Hewlett Packard

For more:

Wednesday, September 29, 2010

Recommended Reading - Open letter to Stephen Elop, Nokia’s new CEO: How to make Nokia great again, RCR Wireless

Now that Nokia has brought on Stephen Elop, the former Microsoft software executive, to be the new CEO, questions remain what he can do to revive the fortunes of Nokia. I have not been one of Nokia’s fans of its latest CEO hire. While Elop is really smart and an effective executive, I am not convinced he was the right person for the job. J. Gerry Purdy, PhD the Principal Analyst for Mobile Trax LLC has written a terrific piece in RCR Wireless outlining his ideas on exactly what Elop needs to do to be successful at the helm of Nokia. According to Purdy,

… all is not well with Nokia as you walk in the door. While the volume of cell phone production is very high, it’s clearly not the right mix of models, software and services. And, while you were one of the first firms to develop a smart phone with the N95 in 2006, you have clearly fallen in the fast-growing smart phone segment, especially in the United States. Integrated multimedia smart phones are becoming the dominate handset device type in the developed world, and Nokia needs to get back to creating truly great and innovative products.

… There’s no way around the basic fact that you’ll have to make a number of major changes. You can’t keep designing products the way you have in the past. You can’t keep doing operating system software the way you have in the past. You can’t ignore major changes in the way people use their phones (highly integrated multimedia and almost all oriented toward touch screens). You have to rebuild from the ground up. You have to re-create a culture around Nokia being “cool” again. You can’t simply declare it. Rather, you have to actually do it.

Purdy goes on to make concrete suggestions on exactly what he thinks Elop needs to do including moving the corporate headquarters from Finland to the United States. Many of his suggestions were right on target but the suggested HQ move is unrealistic for such an important Finnish firm. Anyone interested in Nokia or the wireless industry should read Purdy’s entire piece.

CEO Watch - William C. Weldon, Johnson and Johnson, Update #1

Johnson and Johnson’s JNJ (NYSE) longtime CEO, Bill Weldon remains on the hot seat. The numerous problems J and J has had with recalls and manufacturing oversight through its huge network of subsidiaries particularly its McNeil Consumer Healthcare firm continues to plague the firm and particularly the firm’s CEO. Weldon will be testifying later today before a House Congressional Committee. All eyes will be on weldon today to see how he responds to the criticism the firm has faced for its response to the continuing problems at McNeil as well as other parts of the firm. Despite the recall related proWilliam C. Weldonblems, J and J overall has continued to remain very profitable but J and J more than most drug firms has relied on its reputation as a means for success all these years. Investors and analysts are beginning to question whether Weldon’s response to the problems were adequate. More importantly whether he managed the crisis sufficiently to protect the firm’s reputation. According to piece by Johanna Bennett in Barron’s Blog entitled J and J Reputation on the Line,

… a recent survey by CLSA analyst David Maris indicates that the company’s reputation among mothers and doctors may need a Band-Aide.

When 136 mothers and 50 pediatricians and general practitioners were asked to rate J and J’s formerly unassailable reputation before and after the recalls on a scale of one to 10 (1=horrible and 10=perfect), J andJ’s score fell 26% from an eight to a 5.9, according Maris.J&J One Year Stock Performance

And for some respondents, the recalls have permanently dented their regard for the the health care titan.

Weldon has a difficult task ahead of him before Congress and his shareholders. Despite his long reputation for fine management his survival as CEO may be an uphill battle as this problem continues to have legs. Stay close to the news on this one.

For more:

New York Times

Seeking Alpha

Wall Street Journal

Monday, September 13, 2010

CEO Watch - Nokia CEO Olli-Pekka Kallasvuo, Update #1

It’s official Olli-Pekka Kallasvuo is out as CEO of Nokia NOK1V and in his place on September 21 is a former high level software executive from Microsoft, Stephen Elop. Liberum has been talking about the need for change at Nokia going back to October 16, 2009. The change at the top of Nokia was essential. Many analysts have been delighted with the change. The selection of 46 year old Elop has merit. He was in charge of Microsoft’s Business Division and is extremely well versed in softOlli-Pekka Kallasvuo, Outgoing Nokia CEOware which is the area the Nokia needs to focus on to get its smartphone business at a point where it is capable of competing again with the Apples, Motorolas and Google phones. Elop also has had experience working with Nokia while at Microsoft and in his previous job at Macromedia.

The real question remains can Nokia without a true visionary at the top of the firm make the leap to effectively compete on high end with Apple, RIM, Google and even Motorola. I am somewhat skeStephen Elop, Incoming Nokia CEOptical. Change is certainly afoot at Nokia. Just a few hours earlier, Anssi Vanjoki, Nokia’s smartphone chief and a one time candidate for the CEO position, announced his resignation from the firm. Elop will now have a chance to appoint someone to his own specific liking. The firm desperately needs a visionary at the helm and in some of the key management positions if it has real hope to get back near the top.

Investors must keep a very close eye on new management at Nokia.

Tuesday, September 7, 2010

CEO Watch List - Bill Weldon, Johnson and Johnson

Can Johnson & Johnson’s JNJ (NYSE) CEO, Bill Weldon, survive the firm’s repeated recalls? First it was a series of small recalls then it turned into a flood. Johnson & Johnson failed miserably to handle the public relations and the actual manufacturing related deficiencies in many of its McNeil Consumer Healthcare Division. As time passes it is hard to believe, the someBill Weldonwhat bewildered CEO Bill Weldon will be able to hang on as CEO at J&J. Mina Kimes wrote a terrific piece for Fortune that lays out the difficulties Weldon faces going forward. According to Mimes story,

Weldon, who has kept a low profile for the majority of his eight-year tenure, must now fight to salvage not just McNeil’s reputation — but his own. Surveys of business executives conducted by CoreBrand show that favorability ratings of J&J’s management have dropped from 88.3% in 2006 to 80.9% last quarter. That’s One year stock performance of JandJa significant decline, according to Jim Gregory, the branding firm’s CEO. “There’s something not right here that needs attention,” Gregory says. “[Weldon] needs to change it — or there needs to be a change of management.”

… Though some corporate image pundits have called for the CEO to resign, insiders say Weldon is unlikely to depart before next year, when he will be 62, the age at which J&J leaders typically retire. In fact, two former executives say Weldon may stick around even longer. He has reportedly told his board, one says, that his two younger heirs apparent, Sheri McCoy, the head of J&J’s pharmaceuticals sector, and Alex Gorsky, the head of medical devices, aren’t prepared to assume his role.

Only time will tell. Make sure to keep a close eye on the firm going forward.

Beckman Coulter's CEO Resigns

Beckman Coulter BEC (NYSE), the biomedical testing company, announced today that its CEO, President and Chairman, Scott Garrett, has resigned. Garrett, who has been CEO since 2005 found himself under increased pressure as theScott Garrett firm failed to meet analysts expectations in it second quarter results. The firm has also found itself missing FDA quality standards on some its products. Back in June the company received a warning letter from FDA regarding the marketing of one its products. The combination of all these factors appears to have been what made for the resignation. Beckman Coulter’s stock took a hit a few months back and so far nothing has happened to make for the stock’s revival.

The company also announced that an interim CEO J. Robert Hurley a current employee would take charge as the firm’s interim CEO until a successor to Garrett is found. This executive change takes place as the company is still working on integrating the acquisition of Olympus’s diagnostic’s business into the firm. Hurley, the interim CEOBecton Coulter’s One Year Stock Performance was directly involved in the Olympus integration. Hopefully, his expertise will come in helpful in making this integration more successful.The company can be expected to continue struggling to work out all these problems while the CEO search goes on. Investors should keep a very close eye on the firm’s moves going forward.

For more:


Press Release

Wednesday, August 4, 2010

Recommended Reading - How to acquire a team of 'A players’, Globe and Mail

Eric Herrenkohl has written a book on hiring top talent that is a must read for top executives and HR specialists. The book entitled, How to acquire a team of 'A players’ was recently reviewed by Canada’s Globe and Mail. According to the review,

It might well be that nothing has a greater impact on your business than hiring top people – “A players,” in the vernacular of the business world. But most of us worry when we start recruiting for an opening that we could unwittingly end up with a “C player” because it can be hard to differentiate through the normal recruitment process. Hiring seems like a crap shoot – sometimes we win big, and sometimes we lose.

Eric Herrenkohl, who advises companies on recruiting, says it doesn’t have to be that way. But you may have to change your recruiting practices to improve your odds. That will involve sharpening your understanding of where you are likely to find future top performers, and perpetually being in recruiting mode –even when you don’t have an opening, indeed even, he argues, when you’re in an economic trough and cutting back on staff.

… Understanding what you are looking for in recruits can be subtle.

Herrenkohl lays out a clear approach to hiring and finding the right top talent. Check out the book.

Friday, July 23, 2010

Struggling A and P Takes on CEO After Another Poor Quarter

The Great Atlantic and Pacific Tea Company GAP (NYSE), often referred to as as supermarket chain A&P, has appointed Sam Martin its new CEO and Chairman. The company has been struggling. Martin who just left his position as COO for OffiSam Martin, A&P’s new CEOce Max replaces Ron Marshall as the CEO. Marshall, according to the press release,

left his position just after five months at the helm.

Ron Marshall, A&P’s CEO who has left his positionThe struggling retailer is faced with another key management change at the top while trying to right itself. Just yesterday as part of the CEO announcement the company also announced its quarterly earnings which were far from reassuring. The firm reported a fiscal quarterly loss of $122 million. While the selection of a CEO at the firm has been an example in how CEO selections should not be made, Martin’s selection may actually be the medicine the firm needs.

Martin, who some speculated wanted to become the CEO of Office Max and may have known he was going to be passed over, has the requisite qualifications to help The Great Atlantic and Pacific Tea Company right itself has both high level operational expertise and a background in the food/supermarket business. Prior to his stint as COO at Office Max, which began back in 2007, Martin served as an executive at Wild Oats before it was acquired by Whole Foods. Prior to his work with Wild Oats Martin served with a number of other supermarket/food chains (Shopko stores and Fred Meyer).

Supermarket chains in general have been struggling during the economic recession as consumers seek out A&P One Year Stock Performancenew ways to reduce their food bills and still get convenience shopping. Martin has a real challenge ahead of him but he appears to have the right type of expertise and business acumen to make a go of it. Keep a close eye on the company there may be some positive surprises over the next year.

For more:




Friday, July 16, 2010

CEO Watch - Nokia CEO Olli-Pekka Kallasvuo

Over a month ago Ibriefly examined the continuing problems Nokia NOK1V, the world’s largest phone manufacturer, has found itself facing with the explosive growth of the smartphone market. Nokia unlike Apple and even Motorola, HTC, Samsung etc. has been a true laggard in this marketplace. With this growing competition in the smartphone marketplace Nokia’s share price has declined a whopping 67% in the three years since Apple introduced the iPhone (according to an article in Bloomberg). For some time some shareholders and analysts have been calling for the CEO, Olli-Pekka Kallasvuo’s head. The CEO has recognized thNokia One Year Stock Performancee problems facing Nokia and recently has made some internal management changes to address the issues. Time is running out as shareholder and now possibly board member patience is dissolving. It is hard to see at this point in time as the iPhone4, Google Android phones, Blackberries and other sophisticated smartphones are coming into the marketplace what Nokia can do to reverse its problems. Nokia needs a Olli-Pekka Kallasvuobig winner and it needs it soon.

Fair or not it, looks as if Olli-Pekka Kallasvuo’s time as CEO may be limited. It may be the right time for the Finnish based firm to hire a seasoned CEO from outside the firm.

For more:

Business Insider

Tuesday, July 6, 2010

2nd Quarter Executive Turnover Remains Slow - Inkling of Shift Arises

Executive turnover in the second of quarter of 2010 continues to decline as the financial crisis and the related recession still impact executives at companies large and small. While overall worker employment has remained a serious problem, companies have done little to change top executives during the economic crisis. This is not to say there have not been major executive changes at public companies but rather the totals have been lower than in the past. Investors need to keep on top of executive changes as a way to monitor their investments or investments they might be considering.

Second quarter 2010 CEO and CFO overall changes both dropped 16% when compared with the second quarter totals for 2009. Overall C-level changes (defined by Liberum as covering board of directors, CEOs, CFOs, COOs, CIOs, presidents, EVPs, SVPs down to VPs) for the second quarter of 2010 dropped a whopping 37% when compared with the second quarter of 2009. The drop in C-level changes for the second quarter of 2010 was much smaller when compared with the first quarter total for 2010 - the drop was only 7%. The percentage drops for CEO and CFO changes for the second quarter were also much smaller when compared to the first quarter of 2010 than the totals for the first quarter of 2009. Below are three separate graphical representations of the quarterly change totals for CEO, CFOs and C-level executives.

Quarterly Comparison CEO Change Totals -

Quarterly Comparison CFO Change Totals -

Quarterly Comparison C-level Change Totals -

Wednesday, June 23, 2010

CEO Watch List- Steve Ballmer, Microsoft Update #1

Microsoft MSFT (NASDAQ) and particularly Steve Ballmer, the firm’s CEO, continues to find itself on the hot seat. More and more analysts and tech pundits are beginning to question the firm’s direction and leadership. Yesterday, Kara Swisher of the Wall Street Journal’s All Things Digital examined some of the problems facing Microsoft and it’s chief executive in her piece entitled, What to make of the Microsoft-Is-Falling-And-Can’t-Get-Up MemeOne year stock performance of Microsoft, Source: Swisher is by no means in the camp seriously worried about the firm’s immediate future but she suggests there is a real need for some change at the firm. According to Swisher,

Microsoft, as all tech companies do, needs to change, and a lot faster than it has so far; the company has been trying mightily to do so in search and recently, in mobile, where it is woefully far behind; its leadership under Ballmer, who took over from co-founder Bill Gates, has been meh enough to keep its stock moribund.

But, by no means recently–even if there is a better CEO for Microsoft out there than Ballmer–have I found the company execs ignorant about the tougher issues or unwilling to consider changes needed.

In fact, in its high-flying days, Microsoft did have a tin ear to criticism. No longer, and I would call its execs appropriately concerned about fixing its issues, although their efforts do suffer from the company’s massive size and inertia in making the right moves.

Thus, they certainly might not be successful at innovating, although these are the very kinds of problems Apple CEO Steve Jobs solved when he returned to a rotten company in what, in its current glory days, seems eons ago.

And Microsoft has been getting the same questions that are beginning to be asked about Google.

… That’s why–at this point–I can see no need for panic to set in about Microsoft…

… As for today, even though we are all terminal, the sky looks like it will remain intact at Microsoft for a little bit longer.

Swisher is rather pragmatic about Microsoft’s situation but pragmatism does not always reign particularly when you are talking about one of the largest and formerly most successful tech firms in history. Keep a close eye on Ballmer and Microsoft.

Thursday, June 17, 2010

Recommended Reading - CEO Succession Planning Lags Behind Research Finds, Stanford Graduate School of Business

The gap in succession planning at corporations continues to raise serious problems for companies. The Stanford Graduate School of Business’ June issue examined research on CEO succession planning conducted by Heidrick & Struggles, the executive search firm, and Stanford’s Rock Center for Corporate Governance. According to David Larker a professor at Stanford’s Graduate School of Business,

“We found that this governance lapse stems primarily from a lack of focus: boards of directors just aren’t spending the time that is required to adequately prepare for a succession scenario.”

To get a summary of the research’s findings go to Stanford’s GSB News.

Monday, June 7, 2010

CEO Watch List- Steve Ballmer, Microsoft

I have resisted putting Steve Ballmer, Microsoft’s MSFT (NASDAQ) CEO, on the Liberum CEO Watch List for sometime now. Ballmer’s ongoing startling statements about Microsoft and the industry along with his lack of innovation over the last number of years has begun to be examined by a number of specialists in the field. Rumors even are hearSteve Ballmer, CEO of Microsoftd about bringing Bill Gates back. While it is hard to believe Ballmer is really at risk, maybe he should be. Just today, Adam Lashinsky, the Senior Editor for Fortune wrote a piece in which he said,

One year stock performance of MicrosoftHe (Ballmer) is presiding over the umpteenth reorganization of the company he has run for years, having succeeded his pal, Bill Gates. His online business, whose Bing search engine is making modest gains against industry leader Google, lost more than $700 million last quarter.

Yet here was Ballmer traveling down a semantical rabbit hole over the future of the PCs. In Ballmerworld, it doesn’t matter that the PC is shrinking in relevance. Any device is a computer, and people will want to use Windows because they’re so familiar with it. By the way, Windows 7, Microsoft’s latest release, is crushing it, further proof that computer users love Microsoft.

CEOs certainly are paid to put on a happy face and represent as well as possible. But hearing Ballmer at the Wall Street Journal’s D conference left me with one question: What is the guy smoking? Windows 7 has been a “success” in part because Microsoft’s previous effort, Vista, was such a stinker. Businesses the world over held off so long on upgrading their PCs that once Microsoft got it right they had no choice but to start replacing obsolete equipment.Semantics aside, Ballmer knows as well as anyone that the future of personal-computer industry is in mobile devices. Here, Microsoft’s hand is so weak that its most important global equipment partner, Hewlett-Packard (HPQ), is buying a beleaguered smartphone maker, Palm (PALM), for its superior mobile operating system.

Ballmer really needs to show he understands his marketplace and his competition and how he expects to deal with it. So far, in this regard he has been a dismal failure. Under his tutelage the stock has not really shown much shine either.Stay tuned.


Silicon Alley - Meet The New CEO Of Microsoft

Wednesday, May 26, 2010

Lagging T-Mobile USA Opts for New Strategy And CEO

T-Mobile USA, which is owned by Deutsch Telekom AG (XE: DTE), the fourth place mobile phone carrier in the US behind Verizon, AT&T and Sprint, has finally opted for change. Early today the company announced that long time CEO, Robert Dotson, will be stepping down in February of 2011. In his place, the company appointed Philipp Humm to be the CEO-designate as of July 1. He will officially take over the CEO slot on February 2011. T-Mobile has continued to lag its key rPhilipp Hummivals in the United States and for some time now has needed a new strategy. Humm was previously the CEO of T-Mobile Deutschland from 2005 to 2008 and is currently the CRO of sales and services for Europe for Deutsch Telekom. He is well respected, understand the company and will bring new ideas to the table.Robert Dotson

It is about time T-Mobile got serious about its operations in the United States. The firm needs to be either acquired or come up with a new strategy to compete in the ever competitive wireless marketplace. The selection of Humm appears to make a great deal of sense. Currently, T-Mobile USA has falling subscriber numbers and increasingly poor service a combination for further problems. According to a story by Archibald Preushat for the Wall Street Journal T-Mobile USA,

… likely had the worst first quarter out of all the wireless players in terms of subscriber-base development. T-Mobile USA lost 118,000 contract customers, consistent with recent trends, but the number of net new prepaid customers fell 92% from the fourth quarter, a startling drop that shows the strength of some of the other prepaid players. Sprint Nextel, which continues to lose its more valuable customers, showed particular strength in its prepaid business. Deutsch Telekom One Year Stock Performance

We may see some changes before the official change over in February of next year. Investors must keep a close eye on all the upcoming management changes and possible strategy shifts. Stay tuned.

For more:


Wednesday, May 19, 2010

Recommended Reading - Examining the Impact of SEC Guidance Changes on CEO Succession Planning, The Conference Board

Edward Ferris and Justin O’Brien recently published a paper for the Conference Board (members only) entitled, Examining the Impact of SEC Guidance Changes on CEO Succession Planning. The paper is a must read for anyone interested in CEO succession and its implications for corporate governance and corporate performance. According to the report as a result of the recent change by the SEC,

… regulators have reframed CEO succession as a risk management issue and placed its responsibility firmly in the boardroom. Succession planning responsibilities are redefined as “a key board function” and “a significant policy (and governance) issue … so that a company is not adversely affected by a vacancy in leadership.”

… the implications seem clear: boards will have to set more specific standards and requirements for CEO succession, take responsibility for results, and exercise discernable independence in the process.

Against this backdrop, the report seeks to answer three questions:

• What is the likely impact of this policy reversal?

• How will it practically affect the board?

• What should shareholders know about CEO succession plans, and why?

I highly recommend anyone interested in the succession issue read the paper. If you are not a member of the Conference Board, you might want to contact one of the authors, Edward Ferris, at the Hedge Fund Solutions Research Center. His email is

Tuesday, May 11, 2010

Nokia Awakens from Big Sleep - Is it too late?

Nokia NOK1V (Finland), the world’s largest maker of mobile phones, has for sometime now been lagging the big players in smartphones. Nokia’s Management has seemed to have been asleep at the wheel while Apple, RIM, even Motorola and Google have leapfrogged the firm with regard to smartphones. Finally after much consternation by investors and analysts, the firm just announced the appointment of Anssi Vanjoki, a longtime executive at the firm, and the company’s current marketing chief to serve as the new smartphone chief. The announcement along with other management related changes, somAnssi Vanjokie of which have occurred over the last year, continue to put the firm in a spotlight they would much rather avoid. Nokia One Year Stock Performance

Nokia needs to get a fire under its design and production capabilities to compete with the other big players eating the firm’s lunch. The latest changes are expected to go into effect by July 1. Keep a close eye on Mr. Vanjoki as he takes on a truly challenging task that is vital to Nokia’s continued success.


Bloomberg updated 5/12

Monday, May 10, 2010

US Cellular Selects Fast Food Marketing Exec As CEO

US Cellular USM (NYSE), the wireless voice and data service provider, announced the selection of Mary Dillon to be the firm’s new president and CEO. Ms. Dillon will succeed John Rooney who announced his planned retirement back in February. Ms. Dillon has been the EVP and Global Chief Marketing Officer of McDonalds since 2005. Her selection appears to be a terrific choice for CEO. She brings to the table the type of executive needed to help US Cellular compete in its market. She has both marketing and operational expertise. Ms. Dillon will take over the reigns of the firm on June 1. She faces real challenges to the company’s business but she has the skills to help the firm meet those challenges.

Rooney’s announcement back in February that he would be retiring raised concerns for the company. He had been instrumental in building the firm from a small company that collected roaming fees as its key source of revenue into a powerful regional carrier.

Keep a close eye on the transition and the business moves Dillon makes after she takes over the company.

Tuesday, April 27, 2010

Amgen Promotes CFO Bradway to President and COO - Succession Planning?

Amgen AMGN (NASDAQ), the world’s largest biotechnology company, announced the promotion of Robert Bradway, the firm’s CFO, to President and Chief Operations Officer. Bradway’s promotion comes at the same time it was announced that George Morrow, the firm’s highly regarded EVP of global commercial operations, would retire as of January 31, 2011. Amgen is currently awaiting a hoped-for approval from the FDA for its potential blockbuster osteoporosis drug denosumab. If the drug gets approved, Morrow would have been instrumental in the drug’s promotion and salRobert Bradwaye worldwide had his retirement not been announced. That new responsibility for sheparding the drug will now pass to Bradway.

Bradway’s promotion indicates he is being groomed for the CEO position held by Kevin Sharer. Sharerwho is currently 62, is expected to retire upon his 65th birthday. All eyes should keep a close eye on Bradway. A Reuters article raised the specter that Amgen is moving more and more away from research and development towards acquisitions. The article pointed to Bradway’s promotion as another indicator of this growing trend.One year Stock Performance of Amgen

Thursday, April 22, 2010

Recommended Reading - The real outrage is how CEOs are paid, not how much, Fortune

Geoff Colvin, senior editor at large for Fortune, wrote a thought provoking piece entitled, The real outrage is how CEOs are paid, not how much. Colvin looked at CEO compensation from a different angle than is typically viewed with regard to today’s stratospheric CEO salaries. He was not very concerned about the high salaries but rather in the often wrong- headed approach to executive salaries particularly when it came to CEOs. If you are interested in executive compensation and its impact on stock and corporate performance Colvin’s piece is a must read.

Wednesday, April 14, 2010

Bank of America's Moynihan makes Smart Move

Earlier today Bank of America BAC (NYSE) under the new leadership of Brian Moynihan made a smart move. The bank appointed Charles Noski as the new CFO. His appointment will fill the vacancy that has been open for a significant amountCharles Noski of time. Noski, an outsider to the bank, is highly qualified. According to Bank of America’s press release.

Noski had been the CFO of defense contractor Northrop Grumman, AT&T, Hughes Electronics and United Technologies. He has also served as a board member for a number of Fortune 500 firms including Morgan Stanley, Microsoft, ADP and others.

The bank continues to make significant management change related steps to right the ship and start moving ahead. This latest major appointment comes on the heels of a number of management related changes Moynihan has already taken in his short tenure as BofA’s new CEO.

For more:


Friday, April 9, 2010

Declining Executive Turnover May Have Bottomed - Good News for the Economy?

Executive turnover has continued to decline throughout the great economic recession. Liberum’s latest quarterly turnover numbers for CEOs, CFOs, Board of Directors and C-level executives (defined to include CEOs, board of directors, CFOs, COOs, down to VP level) continued to show a drop in turnover for all key categories for the first quarter of 2010. This declining trend in executive turnover has continued since the first quarter of 2008 for all key executive turnover categories (see the CEO, CFO and C-level graphs below for quarterly turnover comparisons). For the first time since early 2008, Liberum expects the declining trend in executive turnover to have bottomed. We expect to see turnover numbers to begin to increase as we move into the second quarter of 2010.

While the first quarter of 2010 continued to show significant declines in executive turnover when compared with the first quarter of 2009, we have finally seen the overall executive turnover declines slowing when the figures are compared with the last quarter of 2009. If this trend continues, increased executive change at the top of companies may actually mean the economy is in for real expansion and growth.


Quarterly Comparison CEO change Totals 2005 - 2010 -

Quarterly Comparison of CFO Changes 2005 - 2010 -

Quarterly Comparison CFO Change Totals 2005 - 2010 -

Tuesday, March 30, 2010

Investors' Management Change Conundrum - Inside or Outside CEO?

Academics, investors, human resources, board members, corporate executives all have their own opinion on whethdr it is best to outside for a new CEO or hire from within. Liberum continually covers research that points to different conclusions on this question. A new report has come out that claims outside CEO hires tend to increase corporations’ market value. According top a story in Canada’s Globe and Mail, Spencer Stuart, the executive search firm, examined

… the track records of 210 new CEOs of large Canadian companies hired between 1995 and 2006, and measured how much the companies gained in share price during the CEOs’ first three years at the helm.

The results show better performance for CEOs hired from outside in all scenarios, but most especially when the firms are struggling and have forced out their existing CEOs.

The report challenges a view in corporate governance circles that CEOsuccessions work best when internal candidates are selected because they already know the company and need less transition time.

Anyone interested in this issue should contact Spencer Stuart to find out more about the study.

Wednesday, March 24, 2010

EasyJet Goes Outside the Box Again For A New CEO

EasyJet EZJ (LSE) the European discount airline, as it has done so in the past, has gone outside the company for a new CEO with no experience in the airline industry. Yesterday the company announced it has selected Carolyn McCall as its next CEO. McCall currently is the CEO of the struggling Guardian Media Group, the company that publishes the UK’s Guardian and Observer newspapers. McCall has overseen most of the restructuring efforts that the newspaper group has undertaken to survive in the latest troubles facing newspaper industries worldwide. McCall replaces Andy Harrison who will becomeCarolyn McCall, Newly Appointed EasyJet CEO the CEO of the Whitbread PLC , the hotel and restaurant group. While McCall leaves one troubled industry for another in which she has no experience, the selection still has merit. According to a story by Robert Lea and Susan Thompson in the Times Online who quoted an EasyJet insider,

“The airline has been looking for someone who has experience of a highly competitive market, someone from a consumerfacing industry, someone at home with the transition to the internet and someone adept at government lobbying. Carolyn McCall was a very impressive candidate.”

The airline has seen a number of management changes over the last few months. Back in January the comOne year Stock Performance of EasyJetpany put in place a new chairman, Sir Michael Rake chairman of BT Group PLC and CFO, Chris Kennedy an EMI executive. All the management changes have taken place after one of the company’s major shareholders and its founder, Sir Stelios Haji-Ioannou, expressed his objections to the company’s aggressive plans for expansion at the expense of dividends. McCall is expected to toe the line with regard to the founder’s needs. She also appears to be a very interesting choice. Stay tuned

Thursday, March 18, 2010

Activist Investor Burkle Pushes New CEO on Barnes and Noble

Activist Investor Ron Burkle, a major investor in Barnes & Noble (BKS) NYSE, has been pressuring Barnes & Noble’s board for some time. A few weeks back, Burkle accused B&N’s board of protecting the controlling family’s interests in the company after he tried unsuccessfully to increase his share in the company. Burkle has been viewed by the board and many others as workSteven Riggioing to take over the struggling book retailer. Today, shortly after the latest major dust up with Burkle, the firm announced that William Lynch would succeed Steven Riggio as CEO. Riggio, who is a member of the controlling family, after he leaves his CEO position will remain as the vice chairman of the firm. The company’s press release stated Riggio would remain actively involved in the company.

Lynch, who has run the firm’s ecommerce business, has been viewed as the person responsible for launching B&N’s eReader the Nook which has been intended to compete with Amazon’s Kindle and now Apples iPad. Besides the promotion of Lynch, the company also announced that the firm’s chief operatiWilliam Lynchng officer, Mitchell Klipper, would be promoted to CEO of the firm’s retail group.

Most analysts will likely view the latest moves as way to thwart further attempts by Burkle to get his way with the firm. There is no way this recent move puts an end to the drama playing out behind the scenes for control of the firm. In addition to Burkle, another activist investment firm recently bought a large portion of the firm as well. One Year Stock Performance of Barnes & Noble

Stay tuned.

For more:


USA Today

Los Angeles Times

Slate's Big Money

Business Week


The (updated 3/22)

Tuesday, March 16, 2010

Canada's WestJet CEO Resigns

Westjet WJA (TSX), Canada’s second largest airline and for some time considered its most successful, Monday announced the suddSean Durfyen resignation of its CEO Sean Durfy. Durfy took over the company’s CEO position back in 2007. He has been with the airline since 2004 when he joined to head the airline’s marketing, sales and airport operations. While Durfy has been instrumental in much of the low cost airlines success over the last few years, he has also been in charge of its efforts to grow which have seen a number of bumps in the road lately. The low cost airline has been experiencing ongoing implementation problems with its new reservatioGregg Saretskyns systems and has found itself straining under its continuing efforts to grow.

Durfy’s resignation announcement was coupled with the airline’s appointment of Gregg Saretsky as Durfy’s successor. Saretsky, the company’s current executive vice president of operations and vice president of WestJet Vacations, will take over as of April 1. Saretsky has only been with the firm since June 2009. He came to WestJet from Alaska Airlines where he worked for a decade. Prior to Alaska Airlines, Saretsky worked for the defunct Canadian Airlines.

Durfy announced his resignation yesterday. In the press release he was quoted,

“This was a very difficult decision for me; however, after careful consideration, I have decided that this is best for me and my family,” … “Those things I set out to accomplish at WestJet have now been achieved and I believe this is an appropriate time to allow others to carry the torch while I spend more time with my young family.”

After an agreed upon transition period up to September 1, Durfy will leave the firm and resign from the board of directors.

One Year Stock Performance of WestJetDespite many of the growing pains the airline has experienced lately, overall Durfy appears to have done a good job in managing the company. It will be very interesting to see what type of stamp Saretsky will put on the firm.

Stay tuned.

For more:

Financial Post

CTV News

The Vancouver Sun

I Aviation CA (update March 17)