Management Turnover as Change Agent

Tuesday, October 6, 2015

September Executive Turnover Figures Diverge With Slowing Employment Growth

Liberum Research's latest September executive turnover numbers continued to point in a positive direction for the American ecoonomy despite the disappointing employment growth and unemployment figures for September released last week from the U.S. Government's Bureau of Labor Statistics (BLS).  According to Liberum's Management Change Database, September's overall executive turnover numbers continued to point to an ongoing American economic recovery.  September's executive turnover numbers showed increases over last year's September figures in all four key categories Liberum analyzes for its monthly report (see details below).  The executive turnover figures in September as compared to the previous month of August, on the other hand, were not nearly as positive, two out of the four categories saw declines, while the other two categories eked out slight increases.  

Typically, Liberum's monthly executive turnover figures tend to follow a similar pattern with the U.S. Government's Bureau of Labor Statistics' (BLS) Monthly Employment Report.  The Government's Employment figures for September released last Friday, October 2, were somewhat disappointing.  Liberum's turnover figures were far more positive overall and despite growing economic difficulties in China and Europe, Liberum remains more positive about the American economy than the latest employment figures would suggest.

Total nonfarm payroll employment increased by 142,000 in September, and the unemployment rate  
was unchanged at 5.1 percent, the U.S. Bureau of Labor Statistics reported today. 
In September, the unemployment rate held at 5.1 percent, and the number of unemployed persons (7.9  
million) changed little. 
Liberum expects the early fall months will continue to see the economy moving forward but with blips along the way.  We predict excecutive turnover numbers in the early fall will remain fairly positive.  A number of economists have viewed the latest disappointing BLS employment figures in the same way Liberum has.  According to an article in the October 5 edition of Business Insider entitled, This doesn't look like an economy where the jobs landscape is all of a sudden crumbling beneath our feet,

Tom Porcelli, chief economist for RBC Capital Markets, argues the jobs report seems out of sync with most other economic indicators. 

"Given what the multitude of employment metrics had been flagging about the jobs landscape, the September employment report seems like something right out of Bizarro World," wrote Porcelli in a note to clients.

He pointed specifically to the purchasing activity in markets that require long-term financing requirements: cars and houses.

What we are highlighting is that despite [Friday's] modest outcome all of those other things we have just highlighted continue to perform well," said Porcelli. "And assuming job growth is not falling off a cliff – none of the hi-frequency data support that notion – then achieving sturdy consumption growth of around 3% is still easily achieved."
Liberum Comparison Breakdown of Key September Executive Turnover Figures

Below is a breakdown of Liberum's key executive category percentage changes for September 2015 compared with September a year earlier and the previous month of August 2015.    
September 2014 Compared to September 2015
  • For September 2015 increases in turnover occured in all key categories.  CEO changes increased 15% from September a year earlier, CFO changes increased 11%, C-level changes increased a huge 53%, and board of director changes increased 65%.  
August 2015 Compared to September 2015
  • The month to month changes in executive turnover for two out of the four key categories, on the other hand, were characterized by declines. CEO changes declined 6%, CFO changes declined 8%, while C-level changes increased 5% and board of director changes increased a mere 1%.      
Below are the overall turnover totals for September 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 and consulting firms can use the data for a variety of purposes.   

According to Liberum's Management Change Database, a total of 202 CEO related changes occurred during September 2015. Here are 65 changes 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, CIOs, Presidents, etc.)

09-01 NeuroVive Pharmaceutical AB  NEVPF  OTC  82
09-01 Sun BioPharma, Inc.  SNBP  OTC
09-01 The Fresh Market  TFM  NASDAQ  1030
09-01 Wildcat Exploration Ltd.  WEL  CVE
09-02 Silver Spring Net  SSNI  NYSE  568
09-03 Cortronix Biomedi  CBAT  OTC  27952
09-03 LSB Industries, Inc.  LXU  NYSE  562
09-04 Studio One Media  SOMD  OTC  47
09-04 XPO Logistics Inc  XPO  NYSE  3230
09-06 NuState Energy Holdings, Inc.  NSEH  OTC  203788
09-07 Granite Real Estate Investment Trust  GRP-U  NYSE
09-08 Angie's List, Inc  ANGI  NASDAQ  305
09-08 Tempur Sealy International, Inc.  TPX  NYSE  4860
09-08 United Continental Holdings Inc.  UAL  NYSE  21730
09-09 Conn's Inc.  CONN  NAS  1040
09-09 Express Scripts Holding Company  ESRX  NASDAQ  56500
09-09 Start Scientific  STSC  OTC  3
09-09 The Andersons, Inc.  ANDE  NASDAQ  983
09-10 Finisar Corporation  FNSR  NASDAQ  1270
09-11 America Greener Technologies Inc AGRN  OTC  7
09-11 Canaccord Financi  CF  TORONTO  511
09-11 DGSE Companies, Inc.  DGSE  NYSE  5
09-11 FBEC Worldwide Inc  FBEC  OTC  5
09-14 Fuelstream Inc FLST  OTC  23674
09-14 Harte-Hanks, Inc.  HHS  NYSE  236
09-14 Heatwurx  HUWX  OTC  11
09-14 SPX Corporation SPW  FRANCE  2240
09-15 Bellerophon Therapeutics Inc.  BLPH  NASDAQ
09-15 Winnebago Industries, Inc.  WGO  NYSE  557
09-16 Avis Budget Group Inc.  CAR  NASDAQ  4630
09-16 Envoy Capital Group Inc.  ECGI 17
09-16 Hampton Roads Bankshares, Inc.  HMPR  348
09-16 Hospitality Property Fund  HPA
09-16 LaBranche & Co., Inc.  LAB  CVE
09-16 Turkcell Iletisim Hizmetleri A.S. (ADR)  TKC  NYSE  7970
09-16 Xchanging  XCH  ETF CHINA
09-17 La Quinta Holding  LQ  NYSE  2480
09-17 Vision Eye Institute Limited  VEI  AUSTRALIA
09-18 Emergent Health C  EMGE  OTC  3
09-18 Huttig Building Products, Inc.  HBP  NASDAQ  78
09-18 Tele2 Ab Adr  TLTZY  OTC  4400
09-21 Mitcham Industries, Inc.  MIND  NASDAQ 46
09-21 Nation Energy Inc.  NEGY  OTC  68
09-21 Sequenom, Inc.  SQNM  NASDAQ  252
09-21 YuuZoo Corporation  AFC SINGAPORE
09-22 Churchill Downs, Inc.  CHDN  NASDAQ  2360
09-22 Grogenesis Inc  GROG  OTC  15
09-22 Iteris Inc.  ITI  NYSE  78
09-22 MedGen Inc  MDIN  OTC  317826
09-23 Gala Global Inc GLAG  OTC
09-23 Volkswagen a G Sp  VLKAY  OTC  63800
09-25 EMAS Offshore Limited EMAS  NORWAY
09-28 Atmos Energy Corporation  ATO  NYSE  5790
09-29 Cumulus Media Inc.  CMLS  NASDAQ  159
09-29 Epcylon Technolog  PRFC  OTC  14
09-29 Great Rock Development Corp  GROC  OTC  46752
09-29 Haemonetics Corporation HAE  NYSE  1700
09-29 Independence Banc  IEBS  OTC  9
09-29 Inside Secure SA  ISDCF  OTC  52
09-29 Kalex Corp  KLXC  OTC  48510
09-29 Lpath Inc  LPTN  NASDAQ  6
09-29 Polo Ralph Lauren Corporation  RL  NYSE  8910
09-29 Tuesday Morning Corporation  TUES  NASDAQ  233
09-30 Qliro Group AB QLRO  SCANDINAVIA  1570
09-30 Sli Systems Limit  SLI  NEW ZEALAND  48
> Drugs- 175> Banking - 144
> Energy - 113

> Banking - 19
> Energy - 18> Business Services - 15

> Energy - 17
> Drugs/Biotech - 12
> Business Services - 10
> Food Drink - 10
> Health Services - 10
> Manufacturing - 10
> Transportation - 10

> Drugs/Biotech - 69
> Banking - 44
> Manufacturing - 40
> Metals/Mining - 40

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 over ten year old database offers institutional investors the ability to examine: 
  • an individual company, 
  • sector/s, 
  • corporate titles
  • groups of companies, 
  • market caps
  • 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. 
Subscribers often take the service as an electronic feed rather than as an online service. Through the use of Liberum's electronic feed, investment firms have the ability to integrate Liberum's management change data with a variety of other feeds and data applications which, when combined, could be used as a sophisticated method for developing potential short and long-term investment ideas.  Liberum's database whether used as an online tool, an electronic feed, or as a means to receive customized reports is broken down into a number of highly specific fields that afford a user the ability to easily search and manipulate data.  

Investors interested in special situation opportunities or corporate management changes should consider taking a free trial to Liberum's Management Change Database.  The next step is to get a reliable source of these investment leads - and that's why funds use 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.

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