Management Turnover as Change Agent

Tuesday, April 2, 2013

Worrisome Trend for March 2013 and First Quarter Executive Turnover


The latest quarterly and monthly executive turnover results have raised some concerns for Liberum Research with regard to the American and Canadian economies.  Both first quarter and March executive turnover totals for CEOs, CFOs and overall C-level executives (board of directors down to VP level)  showed a significant drop from the previous monthly and year earlier totals raising a concern that the economies could be in-store for a negative change.  Executive turnover totals have always served as a leading economic indicator.  When turnover rises it usually portends future economic and job growth while declining turnover portends a possible decline in economic and job growth. Despite the most recent declining figures, Liberum believes the latest drop in executive turnover totals is only a momentary blip in the growing turnover trend that has been in place now for the last two years. 
 
Liberum has put together below a quarterly breakdown of executive turnover totals for CEOs, CFOs and C-level executives covering North America from 2008 through this last quarter. Most of the below quarterly numbers showed continuing declines until the second quarter of 2011.  At this point, the numbers began to reverse themselves.  Turnover at the executive levels of corporate America began to grow.  Companies began again to consider new blood and often looked to change their corporate strategies as kernels of opportunity began to sprout ever so slightly.  Anyone investing in the market must pay special attention to executive turnover both at the top and the middle executive ranks.  Failure to do so, will result in lost opportunities or worse. To take advantage of these changes, get a free trial to Liberum's Online Management Change Database (more than 200,000 data points).  Just call Richard at 212-988-5497 or send an email to richard@twst.com requesting your free trial.
 
Below is a simple table outlining the quarterly turnover totals as registered through Liberum's Management Change Database for 2008 through the first quarter of 2013 for CEO, CFO and overall C-level turnover.  To get more extensive turnover details contact Liberum.  

 Total CEO Turnover Comparisons   
                  
 Year 2008    2009 2010 2011 2012 2013 
1st Quarter 745491 388346 680 583 
 2nd Quarter596 380321 581665  
 3rd Quarter533409298713 636 
 4th Quarter461430328697 673 
 Annual Total2,3351,7101,3352,337 2,654        583
 
 
 Total CFO Turnover Comparisons 
                       
 Year 2008    2009 2010 2011 2012  2013
1st Quarter 593 332 296 280 640 495 
 2nd Quarter551 326 273 404612  
 3rd Quarter438 279 256629 598 
 4th Quarter364 313  258   476569 
 Annual Total1,9461,250 1,0831,789 2,419495
 
 
 Total C-level Turnover Comparisons
       
 Year 2008    2009 2010 2011 2012 2013 
1st Quarter 6735 4061 34532863 5442 3971 
 2nd Quarter7430 5051 3199 40415036 
 3rd Quarter4865 3690 25225349 4235 
 4th Quarter4277 3439  2381   4596 4197 
 Annual Total23,307 16,241 11,55516,849 18,9103971
 
 

The quarterly trend for key executives (above) illustrates a potential worry for the North American economy.   From a monthly perspective, March 2013 executive turnover totals were also a bit worrisome in most of the key categories.  Investors can ill afford to ignore executive turnover at the top of a firm and in the middle level.  Ignoring executive changes could mean missing a major investment opportunity or may be essential in avoiding a serious investment pitfall. Consider subscribing to Liberum's online Management Change Database or get your free trial now.  Once a subscriber, you will never miss a key executive change again and will be able to use the extensive data to make your own predictions.  

The latest monthly comparison figures with regard to executive turnover for March 2013 with those of March 2012 and February 2013 and March 2013 are as follows:  
  • CEO turnover for March 2013 declined 11% from that of March 2012, CFO turnover declined 41%, while overall C-level turnover declined 30%.  The month to month change from February 2013 to March 2013 showed a decline of 15% for CEOs, a decline of 16% for CFOs and a decline of 3% with regard to C-level changes.  This is the first registered decline in all three categories for some time.  It does not yet represent a trend but should be followed closely for the next few months.
In the below report, Liberum has focused on twenty two CEO changes of special significance for the month of March. We have also put together the overall turnover figures for the month of March 2013.  The below information is just illustrative of how investors could view executive turnover and its possible relationship with a company's performance. The same could be done for COOs, Presidents, Chairmans etc.just through the database.

DATE       COMPANY   TICKER    EXCHANGE   MARKET CAP $ MILLIONS
03-01 Commercial Veh Group  CVGI  NASDAQ  232
03-06 AmeriGas Partners  APU  NYSE  4049
03-06 Digital River, Inc. DRIV  NASDAQ  474
03-07 Endeavor Power Co  EDVP  OTN  33
03-07 Pandora Media, In  P  NYSE  2348
03-08 Aastrom Biosciences  ASTM  NASDAQ 56
03-08 Mobile Integrated   MIBI    OTN  28
03-10 Intersil Corp  ISIL  NASDAQ
03-12 VeriFone Holdings  PAY  NYSE   2309
03-13 Orthofix Int'l NV  OFIX  NASDAQ
03-13 Uranium Resources  URRE  NASDAQ  44
03-14 Hittite Microwave  HITT  NASDAQ  1875
03-18 3power Energy Gr  PSPW  OTN  7
03-18 American Science  ASEI  NASDAQ  495
03-18 Apricus Bioscienc  APRI  NASDAQ
03-18 Skullcandy, Inc   SKUL  NASDAQ
03-18 Spirit Aerosystem  SPR  NYSE  2713
03-19 As Seen On Tv Inc  ASTV  OBB  20
03-19 Cellynx Group Inc CYNX  OTN  146
03-19 Electronic Arts I  EA  NASDAQ   5161
03-19 Mobile Mini, Inc   MINI  NASDAQ  1316
03-27 Liqtech Intl Inc  LIQT  OBB  58

MARCH 2013 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1243
TOP INDUSTRY SECTORS
> Banking
 - 108
> Drugs/Biotech - 108
> Energy- 108
MARCH 2013 CEO CHANGE STATISTICS
GRAND TOTAL - 176
TOP INDUSTRY SECTORS

> Banking - 16
> Drugs/Biotech - 16
> Energy - 16
MARCH 2013 CFO CHANGE STATISTICS
GRAND TOTAL - 136
TOP INDUSTRY SECTORS

> Energy - 15
> Drugs/Biotech - 9
> Banking - 7
> Semiconductors - 7
> Software - 7
MARCH 2013 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 455
TOP INDUSTRY SECTORS

> Energy - 51
> Drugs/Biotech - 50
> Business Services - 34
Investors need to diligently monitor key management changes. Certain management changes should be viewed as a "special situation" that can have a direct and major impact on a company's performance and share price.
  • New CEOs know more than the market about the company.  Their decision to take the position contains information. Likewise the departing CEO. Likewise departing CFOs.
  • New CEOs will bring new skills and often-times a new direction.  This is normally significant, and worth analyzing.
Liberum Research, the independent research firm focused on corporate management change, has developed an online relational database designed to assist institutional investors develop special situation investment ideas related to executive management change. While special situation investing traditionally revolves around corporate restructuring, spin-offs and acquisitions, executive management changes, depending on the circumstances, can represent a short or long-term investment opportunity. Even when one excludes the major executive changes that continue to impact the troubled financial sector other industry sectors have management change related investment opportunities that merit examination.
Liberum's seven year old database offers institutional investors the ability to examine an individual company, sector/s, group of companies, and/or geographic region/s/ locations via a metric of one's own choosing.  You can use the information individually or in combination with a number of other financial tools to develop unique investment ideas.  Subscribers often take the service as an electronic feed rather than as an online service. Through the use of Liberum's electronic feed, investment firms have the ability to integrate Liberum's management change data with a variety of other feeds and data applications which when combined could be used as a sophisticated method for developing potential short and long-term investment ideas. 

Liberum's database whether used as an online tool, an electronic feed or as a means to receive customized weekly, monthly or annual reports is broken down into a number of highly specific fields that afford a user the ability to search and manipulate data.  
Investors interested in special situation opportunities or corporate management changes should consider taking a free trial to Liberum's Management Change Database to determine the usefulness of the service.  To get a no obligation trial, call Richard Jacovitz at 212-988-5497 or send an email request. The next step is to get a reliable source of these investment leads - and that's why funds use Liberum, a division of The Wall Street Transcript. 

ABOUT LIBERUM
The largest database of C-level executive change at public companies.  Frequently quoted in the financial press, Liberum helps investors monitor this important, continuous stream of investment events.  The data is also useful for investment bankers, private equity, executive search and consulting firms.  The data can be used in numerous ways. 

Daily customizable alerts, a searchable database, custom reports, xml feeds.   Liberum clients get the data the way they can best exploit it.  Get your short trial now.  And be sure to check out our management change blog. 
 
Best,

Richard

Richard Jacovitz
SVP Director of Research
Tel. 212-988-5497
email: richard@twst.com

1 comment:

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