May Executive Turnover Points Positive For Economy - Watch for Bumps Ahead

Liberum Research's executive turnover data for May 2014 continued to show positive signs for the North American economies.  CEO and CFO changes monitored by Liberum saw very high percentage increases from the previous month of April and C-level turnover showed a healthy increase over the same period.  The numbers were not quite as positive when viewed from the same month of May a year earlier, but Liberum does not view the year to year by the one month as a real issue.  The recovery continues to move in spurts, both up and down, but the overall trend remains positive.  Wednesday, June 4, ADP released its Employment Report for May and while the totals were below most analysts expectations, the U.S. Labor Department's Bureau of Labor Statistics (BLS) Employment Report, the far more important of the two, released Friday, June 6, was better than the ADP report and bodes well for the continued up and down recovery.  This BLS report was far closer to results Liberum saw in May as it related to executive turnover.  

Last Wednesday's ADP's Employment Report for May 2014, as stated above, was below analysts expectations but was not terrible.  According to the ADP Employment Report:

"After a strong post-winter rebound in April, job growth in May slowed somewhat,” said Carlos Rodriguez, president and chief executive officer of ADP. “The 179,000 jobs added figure is higher than May of last year and in line with the average over the past twelve months.” 

Mark Zandi, chief economist of Moody’s Analytics, said, "Job growth moderated in May. The slowing in growth was concentrated in Professional/Business Services and companies with 50-999 employees. The job market has yet to break out from the pace of growth that has prevailed over the last three years.” 

Last Friday's U.S. Labor Department's BLS Report, while not terrific, was reaosnably good:

Total nonfarm payroll employment rose by 217,000 in May, and the unemployment rate was unchanged at 6.3 percent. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.

Liberum Comparison Breakdown of Key May Executive Turnover 

Below is a breakdown of Liberum's key executive category percentage changes for May 2014 compared with May a year earlier and the previous month of April 2014.   

• For May 2014 decreases took place in two key categories.  CEO changes declined 5% from a year earlier, board of director changes declined 21%,  whereas overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) remained virtually the same and CFO changes increased 17%.

• The month to month change in executive turnover (April 2014 to May 2014) showed a different picture with increases in three of the four key categories of 38% for CEOs, CFO changes increased a whopping 48%, C-level changes increased 8% while board of director changes declined 14%.       

Below are the overall turnover totals for May.  The information is just illustrative of how institutional investors could view executive turnover and its possible relationship with a company's performance.  Using Liberum's database could offer a totally new perspective on investment and is a potential way to come up with unique special situation opportunities.  

Call now (212-988-5497) or email richard@twst.com and get a no obligation one week trial to Liberum's online management change database.

KEY CEO CHANGES - MAY 2014
58 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING 

According to Liberum's Management Change Database, a total of 211 CEO related changes occurred during May 2014. Here are 58 from the time period that caught my eye.   By significant, I'm looking for situations where I think a particularly strong or weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation. 

COMPANY TICKER  EXCHANGE  MARKET CAP $ MILLIONS    

Adcare Health Sys  ADK  NYSE

Aggreko  AGK   LONDON  45

Ambassadors Group  EPAX  NASDAQ  60

Ambit Biosciences  AMBI  NASDAQB  110

American Caresour  ANCI  NASDAQ  11

Assurant, Inc.  AIZ  NYSE  4793

California Gold M  CGM  CVE

Canadian Pacific Railway LTD (USA)  CP  NYSE   27698

Canamex Resources  CSQ  CVE

Corecomm Solution  COCMF  OBB  649

Covance Inc.  CVD  NYSE  4826

Crocs, Inc.  CROX  NASDAQ  1308  

ENSCO International Inc  ESV  NYSE  11837

Enzymebiosystems  ENZB  OBB  19

Excel Corp   EXCC  OTN  9

Famous Dave's of America, Inc. DAVE  NASDAQ  227

Ford Motor Company F  NYSE  61662

FTI Consulting, Inc. FCN  NYSE  1236

Furmanite Corp FRM  NYSE  412

Green Tech Soluti  GTSO  OBB  986

Greenplex Svcs In  GRPX    OTN  43

Hansen Medical, I  HNSN  NASDAQ  147

Hawaiian Electric Industries, Inc. HE  NYSE   2436

Hyduke Energy Ser  HYD  TORONTO  13

Infoblox Inc. Com  BLOX  NYSE  690

International Flavors & Fragrances Inc.  IFF   NYSE  7982

Ja Energy JAEN  OBB  9

Krispy Kreme Doughnuts  KKD  NYSE  1210

LGL Group Inc. LGL  NYSE  11

Lihua Internation  LIWA  NASDAQ  62

Magnachip Semicon  MX  NYSE  439

Marin Software In  MRIN  NYSE  324

Maxwell Technologies Inc.  MXWL  NASDAQ  483

National Bank Hol  NBHC  NYSE  844

Navidea Biopharma  NAVB  NYSE  204

Nokian Tyres  NRE  FINLAND

Omnicare, Inc.  OCR  NYSE  6271

Orofino Gold Corp  ORFG  OTN  2

OXiGENE, Inc. OXGN  NASDAQ  27

Parker Drilling Company  PKD  NYSE  803

PGT, Inc. PGTI  NASDAQ  395

PolyOne Corporation POL  NYSE  3533

Pope Resources POPE  NASDAQ  304

Prospect Global R  PGRX  OTN  4

Radient Pharm Cp  RXPC  OTN

Sally Beauty Holdings, Inc.  SBH  NYSE  4135

Sierra Monitor Co  SRMC  OTN  16

SupportSoft, Inc.  SPRT  NASDAQ  124

Target Corporation  TGT  NYSE  36939

The Mosaic Company  MOS  NYSE  19133

Tier Technologies, Inc.  TIER  OTN  711

Vhgi Holdings Inc  VHGI  OTN  891

Viewtran Group, I  VIEW  NASDAQ  58

Virtus Oil and Ga  VOIL  OBB

Vulcan Materials Co  VMC  NYSE  7815

WesBanco, Inc. WSBC  NASDAQ  847

Wpx Energy, Inc.  WPX  NYSE  4345

Yaterra Ventures YTRV  OTN  635

MAY 2014 MANAGEMENT CHANGE STATISTICS

C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1513

TOP INDUSTRY SECTORS

> Drugs/Biotech - 137> Business Services - 102
> Banking - 98

MAY 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 211

TOP INDUSTRY SECTORS

> Energy - 19> Drugs - 17
> Health Services - 11

MAY 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 247

TOP INDUSTRY SECTORS

> Business Services - 23
> Drugs/Biotech - 20
> Energy - 18

MAY 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 428

TOP INDUSTRY SECTORS

> Drugs/Biotech - 39
> Energy - 30
> Business Services - 29