January Executive Turnover Points Upward for The Economy

Liberum Research remains very positive about the North American economies, particularly the United States.  As we have seen for the last two years, overall executive turnover has continued to trend upward with various bumps.  The same has been true for overall job growth which has also been trending upward.  Better yet, monthly unemployment claims have, with some exceptions, continued to trend downward, a further positive note. Liberum remains quite positive on continuing executive turnover as we move into the later winter and early spring months.  The European economies, however, remain a special caveat and could present real risks to our prediction  The continuing risks in Greece and growing possibility of deflation throughout the European Community could present a serious problem for world growth if these problems are not properly tackled.  Last week the employment numbers released from the U.S. Government for the month of January and the numbers released from ADP's January Employment Report both dovetailed with Liberum's positive figures.

According to ADP's January 2015 Employment Report:

Private sector employment increased by 213,000 jobs from December to January.

"January marks another month of solid job gains and is in line with the NER’s twelve-month average of over 200,000 jobs added per month,” said Carlos Rodriguez, president and chief executive officer of ADP.

Mark Zandi, chief economist of Moody’s Analytics, said, “Employment posted another solid gain inJanuary, although the pace of growth is slower than in recent months. Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring. All indications are that the job market will continue to improve in 2015.” 

Even more positive was the U.S. Labor Department's Bureau of Labor Statistics January Employment release:

Total nonfarm payroll employment rose by 257,000 in January, and the unemployment rate

was little changed at 5.7 percent, the U.S. Bureau of Labor Statistics reported today.

Job gains occurred in retail trade, construction, health care, financial activities,

and manufacturing.

 

 

Liberum Comparison Breakdown of Key January Executive Turnover Figures

Below is a breakdown of Liberum's key executive category percentage changes for January 2015 compared with January a year earlier and the previous month of December 2014.   

 

January 2014 Compared to January 2015

• For January 2015 increases in turnover occured in three out of four key categories.  CEO changes declined 4% from January a year earlier, CFO changes increased 14%, C-level changes increased 2%, and board of director changes increased 14%.  

December 2014 Compared to January 2015

• The month to month changes in executive turnover, December 2014 to January 2015, however, were not nearly as positive.  CEO changes declined 15%, CFO changes increased 21%, C-level changes increased 2% and board of director changes declined 10%.      

Below are the overall turnover totals for January 2015.  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.  Executive search firms on the other hand can use the information to generate new leads and new clients.   

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. Find out why Hedge Funds, Executive Search, Business Intelligence and Consulting firms all rely on Liberum's data.

 

KEY CEO CHANGES - JANUARY 2015
41 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING 

According to Liberum's Management Change Database, a total of 192 CEO related changes occurred during January 2015. Here are 41 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    

01-02 Developers Diversified Realty Corp.  DDR  NYSE  6659

01-05 Covanta Holding Corporation   CVA  NYSE  2821

01-05 Neostem, Inc.  NBS  NASDAQ  125

01-05 Nephros Inc.  NEPH  OTC   24

01-05 Northrim BanCorp, Inc. NRIM  NASDAQ  159

01-05 Ocean Power Tech OPTT  NASDAQ  12

01-05 Salix Pharmaceuticals, Ltd.  SLXP  NASDAQ  7579

01-05 Ultra Clean Holdings, Inc.  UCTT  NASDAQ  282

01-08 Kalobios Pharmace  KBIO  NASDAQ  16

01-09 Norwegian Cruise NCLH  NASDAQ  9212

01-12 Getinge -B-  GETIB SWEDEN

01-12 Halitron, Inc  HAON  OTC  599

01-12 Morrison Supermkt   MRW  LONDON  43

01-13 Boomerang Systems  BMER  OTC  17

01-13 Sevion Therapeuti SVON  OTC  7

01-13 The Fresh Market  TFM  NASDAQ 1805

01-14 Licont Corp  LNTP  OTC  8

01-15 Dice Holdings, In  DHX  NYSE  512

01-16 Integrated Electrical Services, Inc.  IESC  NASDAQ  159

01-16 Las Vegas Sands Corp.  LVS  NYSE  44080

01-16 T Bird Pharma Inc   TPI CANADA VANCOUVER  20

01-16 The Home Depot, Inc.  HD  NYSE  137200

01-20 Apache Corporation  APA  NYSE  22649

01-20 Outerwall Inc.   OUTR  NASDAQ  1134

01-20 Santa Fe Petroleum, Inc.  SFPI  OTC  269

01-21 American Mortgage Acceptance Company  AMC  NASDAQ  2700

01-21 Forward Industries, Inc.  FORD  NASDAQ  8

01-21 Innovative Food H  IVFH  OTC  35

01-21 MER Telemanagement Solutions Ltd.  MTSL  NASDAQ  4

01-21 Tootsie Roll Indu  TR  NYSE  2042

01-22 Invacare Corporation  IVC  NYSE  482

01-22 Kinder Morgan, Inc.  KMI  NYSE  43268

01-22 Peabody Energy Corporation  BTU  NYSE  1827

01-23 ATLANTIC POWER CORP  AT  NYSE  330

01-23 Bristol Myers Squibb Co.  BMY  NYSE  102800

01-23 Joe's Jeans Inc.  JOEZ  NASDAQ  25

01-24 Sears Canada Inc  SCC  TORONTO  1188

01-26 Adaptive Medias   ADTM  OTC

01-26 Glyeco Inc.  GLYE  OTC

01-26 Mattel, Inc.  MAT  NASDAQ  8982

01-27 McDonald's Corporation   MCD  NYSE  86401

 

JANUARY 2015 MANAGEMENT CHANGE STATISTICS

C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1479

TOP INDUSTRY SECTORS

> Drugs/Biotech - 183> Banking - 127
> Business Services - 98

JANUARY 2015 CEO CHANGE STATISTICS
GRAND TOTAL - 192

TOP INDUSTRY SECTORS

> Drugs/Biotech - 32

> Energy - 15> Manufacturing - 10

JANUARY 2015 CFO CHANGE STATISTICS
GRAND TOTAL - 224

TOP INDUSTRY SECTORS

> Drugs/Biotech - 23
> Banking - 17
> Software - 12

JANUARY 2015 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 466

TOP INDUSTRY SECTORS

> Drugs/Biotech - 76
> Energy - 48
> Banking - 36

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.