The latest executive turnover numbers remain far more muddled than Liberum expected. Both the September totals and the latest quarterly executive turnover numbers have failed to indicate a trend for where executive turnover will be going in the near future. To make matters more complicated, Liberum Research's latest executive turnover numbers have not correlated with the job growth numbers that were just released October 1, from ADP or with the latest decreased number of people seeking unemployment benefits released from the government. ADP's September Employment Report results were far more positive than the executive turnover numbers Liberum tracked over the same period. This lack of correlation between these two data categories is a bit unusual. It is possible the employment numbers to be released from U.S. Government's Bureau of Labor Statistics (BLS) later this week, will correlate more closely with Liberum's latest executive turnover figures, we will just have to see.
According to ADP's latest Employment Report:
Private sector employment increased by 213,000 jobs from August to September.
"September’s jobs added number marks the sixth straight month of employment gains above 200,000,” said Carlos Rodriguez, president and chief executive officer of ADP. “It’s a positive sign for the economy to see the 200,000-plus trend continue.”
Mark Zandi, chief economist of Moody’s Analytics, said, "Job gains remain strong and steady. The pace of job growth has been remarkably similar for the past several years. Especially encouraging most recently is the increasingly broad base nature of those gains. Nearly all industries and companies of all sizes are adding consistently to payrolls.”
While Liberum has been a bit surprised about the latest executive turnover numbers, we remain positive about the American Economy and continue to expect executive turnover numbers to trend upward as we move into the Fall and early Winter months.
Liberum has put together below, a six plus year quarterly breakdown of executive turnover totals for CEOs, CFOs and C-level executives covering North America. Most of the below quarterly numbers showed continuing declines until the second quarter of 2011. At that point, the numbers began to reverse themselves. Turnover at the executive levels of corporate America began to grow but not consistently and that trend has continued.
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 OnlineManagement Change Database. Just call Richard at 212-988-5497 or send an email to richard@twst.com requesting your free trial. Within a day of your trial, you will have access to nearly 200,000 data points from which you can generate ideas and daily information on who ischanging jobs at the top.
Below is a simple table outlining the quarterly turnover totals as registered through Liberum Research's Management Change Database for 2008 through the third quarter of 2014 for CEO, CFO and overall C-level turnover.
Total CEO Turnover Comparisons
| Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 1st Quarter | 745 | 491 | 388 | 346 | 680 | 583 | 500 |
| 2nd Quarter | 596 | 380 | 321 | 581 | 665 | 619 | 527 |
| 3rd Quarter | 533 | 409 | 298 | 713 | 636 | 627 | 557 |
| 4th Quarter | 461 | 430 | 328 | 697 | 673 | 636 | NA |
| Annual Total | 2,335 | 1,710 | 1,335 | 2,337 | 2,654 | 2,465 | 1,584 |
Total CFO Turnover Comparisons
| Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 1st Quarter | 593 | 332 | 296 | 280 | 640 | 495 | 468 |
| 2nd Quarter | 551 | 326 | 273 | 404 | 612 | 557 | 595 |
| 3rd Quarter | 438 | 279 | 256 | 629 | 598 | 582 | 550 |
| 4th Quarter | 364 | 313 | 258 | 476 | 569 | 562 | NA |
| Annual Total | 1,946 | 1,250 | 1,083 | 1,789 | 2,419 | 2,196 | 1,613 |
Total C-level Turnover Comparisons
| Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 1st Quarter | 6735 | 4061 | 3453 | 2863 | 5442 | 3971 | 4083 |
| 2nd Quarter | 7430 | 5051 | 3199 | 4041 | 5036 | 4102 | 4117 |
| 3rd Quarter | 4865 | 3690 | 2522 | 5349 | 4235 | 4123 | 3950 |
| 4th Quarter | 4277 | 3439 | 2381 | 4596 | 4197 | 4196 | NA |
| Annual Total | 23,307 | 16,241 | 11,555 | 16,849 | 18,910 | 16,392 | 12,150 |
The latest monthly comparison figures with regard to executive turnover for September 2014 as compared with those of September 2013 and August 2014 and September 2014 are as follows:
- CEO turnover for September 2014 declined 17% from that of September 2013, CFO turnover declined 7%, C-level turnover declined 5% and Board of Director turnover declined 14%.
- The the month to month change from August 2014 to September 2014 was a bit more positive. CEO turnover increased 11% for CEOs, declined 12% for CFOs, increased 6% with regard to C-level changes and declined 9% for Board of Director changes.
In the below report, Liberum has focused on forty five CEO changes of special significance for the month of September out of a total of 175. We have also put together the overall turnover figures for the month of September 2014. 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 Liberum database.
DATE COMPANY TICKER EXCHANGE MARKET CAP $ MILLIONS
09-01 American International Group, Inc. AIG 79991
09-01 Luxottica Group S.p.A. (ADR) LUX 25308
09-02 Danaher Corporation DHR 53546
09-02 Gordmans Stores GMAN 70
09-03 Baldwin Technology Co. BLD
09-03 Trans World Entertainment Corporation TWMC 115
09-03 Westell Technologies, Inc. WTSL 70
09-03 Willbros Group, Inc. WG 530
09-04 Alcatel-Lucent (ADR) ALU 9377
09-05 First Mountain Bn FMBP 9
09-05 Triple-S Mgmt Cl GTS
09-06 Positron Corp POSC
09-08 Capital Product P CPLP 918
09-08 Hertz Global Holdings, Inc. HTZ 12522
09-08 International Paper Company IP 20659
09-08 Reneuron Group RENE.L
09-09 Lighting Science LSCG 37
09-11 Altisource Portfo ASPS 2252
09-11 Mri Interventions MRIC 68
09-12 Vicon Inds Inc VII 16
09-16 ATLANTIC POWER CORP AT
09-16 Landec Corporation LNDC 337
09-17 Agilent Technologies Inc. A
09-17 Insulet Corporati PODD 2033
09-18 Continental Resrc CLR 24783
09-18 Hudson City Bncp HCBK
09-18 Oracle Corporation ORCL 175100
09-19 JetBlue Airways Corporation JBLU 3210
09-19 Solaris Power Cel SPCL
09-22 Medijane Hldgs In MJMD 12
09-22 Response Biomedic RPBIF 9
09-22 Thoratec Corp. THOR 1495
09-24 Activecare Inc ACAR 14
09-24 Aja Cannafacturin AJAC 339
09-24 Malvern Bancorp, MLVF 71
09-24 That Marketing So VSHGD 15
09-25 Sears Canada Inc SCC.TO 1299
09-25 Success Holding G SHGT 51
09-26 The Pep Boys - Manny, Moe & Jack PBY 503
09-29 American Apparel, Inc. APP 140
09-29 AMN Healthcare Services, Inc. AHS 719
09-29 Coty Inc. Class A COTY 5903
09-29 Loton Corp LTNR 268
09-29 Lyondellbasell In LYB 56925
09-29 Protalix BioTherapeutics Inc. PLX 221
SEPTEMBER 2014 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1223
TOP INDUSTRY SECTORS
> Drugs/Biotech - 137
> Banking - 124
> Business Services - 84
GRAND TOTAL - 1223
TOP INDUSTRY SECTORS
> Drugs/Biotech - 137
> Banking - 124
> Business Services - 84
SEPTEMBER 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 175
TOP INDUSTRY SECTORS
> Banking - 15
> Drugs/Biotech - 14> Insurance -14
> Manufacturing - 14
GRAND TOTAL - 175
TOP INDUSTRY SECTORS
> Banking - 15
> Drugs/Biotech - 14> Insurance -14
> Manufacturing - 14
SEPTEMBER 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 184
TOP INDUSTRY SECTORS
> Business Services - 13
> Energy - 13
> Drugs/Biotech - 11
> Manufacturing - 11
GRAND TOTAL - 184
TOP INDUSTRY SECTORS
> Business Services - 13
> Energy - 13
> Drugs/Biotech - 11
> Manufacturing - 11
SEPTEMBER 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 361
TOP INDUSTRY SECTORS
> Drugs/Biotech - 51
> Banking - 24
> Business Services - 22
GRAND TOTAL - 361
TOP INDUSTRY SECTORS
> Drugs/Biotech - 51
> Banking - 24
> Business Services - 22
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.
Liberum's ten 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.
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