Executive Turnover Jumps As Do Private Employment Rolls - Economy Humming?

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 

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

TOP INDUSTRY SECTORS

> Drugs/Biotech - 173
> 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

OCTOBER 2014 CFO CHANGE STATISTICS
GRAND TOTAL - 191

TOP INDUSTRY SECTORS

> Drugs/Biotech - 21
> Energy - 20
> Real Estate - 15

> Software - 15

OCTOBER 2014 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 452

TOP INDUSTRY SECTORS

> Drugs/Biotech - 73
> 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.