Liberum Research has been predicting for the last number of months increased executive turnover at public companies. While turnover has not lived up to Liberum's predictions, October's latest figures have moved in a far more positive direction and along the path Liberum has been forecasting. October's growth in executive turnover coincides with ADP's latest Employment Report released November 5, that showed an unexpected increase in private employment. Liberum expects the same will be true with the U.S. Labor Department's (BLS) Employment figures scheduled for release at the end of this week.
According to today's ADP October Employment Report:
Private-sector employment increased by 230,000 from September to October, on a seasonally adjusted basis.Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is steadily picking up pace. Job growth is strong and broad-based across industries and company sizes. At this pace of job growth unemployment and underemployment is quickly declining. The job market will soon be tight enough to support a meaningful acceleration in wage growth.”
As for Liberum's latest figures, three out four key categories experienced declines in October 2014 over the same month of October 2013, however, Liberum saw consistently large increases in all four categories when October 2014's turnover figures were compared to the same totals for the previous month of September 2014. Liberum expects executive turnover will continue to grow as we move into the later Fall and early Winter months. If turnover growth continues to grow, it will represent another positive sign for North America's economic recovery.
Liberum Comparison Breakdown of Key October Executive Turnover Figures
Below is a breakdown of Liberum's key executive category percentage changes for October 2014 compared with October a year earlier and the previous month of September 2014.
October 2013 Compared to October 2014
For October 2014 declines in turnover occured in three key categories. CFO changes declined 9% from October a year earlier, C-level changes declined 4%, and board of director changes declined 12%. CEO changes on the other hand, increased a mere 1%.
September 2014 Compared to October 2014
The month to month changes in executive turnover, September 2014 to October 2014, however, showed significant increases in all four key categories. CEO changes increased 22%, CFO changes increased 4%, C-level changes increased 16%, and board of director changes increased 25%.
Below are the overall turnover totals for October 2014. The information is just illustrative of how institutional investors could view executive turnover and its possible relationship with a company's performance.
KEY CEO CHANGES - OCTOBER 2014
33 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING
33 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING
According to Liberum's Management Change Database, a total of 213 CEO related changes occurred during October 2014. Here are 33 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. (Anyone using Liberum's database could do the same kind of analysis for other key titles, e.g., CFOs, COOs, CMOs Presidents, etc.)
DATE COMPANY TICKER EXCHANGE MARKET CAP $ MILLIONS
10-01 Activecare Inc ACAR $10
10-01 Centrus Energy Co LEU $38
10-06 Unisys Corporation UIS OTC $1044
10-07 Niko Res NKO TORONTO $85
10-07 Vonage Holdings Corp VG NYSE $667
10-08 Purespectrum, Inc PSRU OTC $263
10-08 The Gap Inc. GPS NYSE $15946
10-09 Advanced Micro Devices, Inc. AMD NYSE $2287
10-13 Adcare Health Sys ADK NYSE $76
10-13 J.C. Penney Co., Inc. JCP NYSE $2242
10-14 Computer Task Group, Inc CTG NASDAQ $198
10-14 Dex Media, Inc. DXM NSADQ $134
10-14 Quiksilver, Inc. ZQK NYSE $304
10-15 Appiphany Technol APHD OTC $93
10-15 Bg Group BG LONDON $346
10-15 Innovative Softwa INIV OTC $22
10-15 Midway Gold Corpo MDW NYSE $182
10-15 Navidea Biopharma NAVB NYSE $200
10-15 Statoil ASA (ADR) STO NYSE $70382
10-16 Darden Restaurants, Inc. DRI NYSE $6536
10-17 Richmont Mines Inc. (USA) RIC NYSE $120
10-21 C T I Group (Hold CTIG OTC $10
10-21 First Colombia Go FCGD OTC $16
10-21 SeaChange Intl SEAC NASDAQ $211
10-22 Golden Predator M GPY CVE $3
10-24 Thales HO France $7738
10-27 Cerulean Pharma I CERU NASDAQ $83
10-28 22nd Cent XXII NYSE $129
10-29 sanofi-aventis (ADR) SNY NYSE $118900
10-29 Shanda Games Limi GAME NASDAQ $1740
10-30 F5 Networks, Inc. FFIV NASDAQ $9077
10-31 Carnival Corporation CCL NYSE $31197
10-31 Oragenics Inc OGEN NYSE
OCTOBER 2014 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1420
GRAND TOTAL - 1420
TOP INDUSTRY SECTORS
> Drugs/Biotech - 173
> Banking - 107
> Energy - 106
> Banking - 107
> Energy - 106
OCTOBER 2014 CEO CHANGE STATISTICS
GRAND TOTAL - 213
TOP INDUSTRY SECTORS
> Drugs/Biotech - 21
> Energy- 21> Retail - 14
> Metals/Mining - 13
> Metals/Mining - 13
OCTOBER 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 191
TOP INDUSTRY SECTORS
> Drugs/Biotech - 21
> Energy - 20
> Real Estate - 15
> Energy - 20
> Real Estate - 15
> Software - 15
OCTOBER 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 452
GRAND TOTAL - 452
TOP INDUSTRY SECTORS
> Drugs/Biotech - 73
> Banking - 41
> Energy - 22
> Banking - 41
> Energy - 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.
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 a short trial call 212-988-5497 or email richard@twst.com.
