Management Turnover as Change Agent

November Continues Growth Trend in Executive Turnover

2011-12-13T09:42:00.001-05:00

Liberum’s executive turnover data for the month of November has continued to show growing turnover within the executive ranks similar to what we have seen for most of previous months this year. This trend was a complete reversal of what we saw for the previous two years. November’s increase in executive turnover took place while we saw a positive trend with regard to the number of people filing new unemployment claims and, even more significantly, the economy has actually generated more jobs. This is not say we are out of the woods with regard to overall employment and the economy but more positive employment signs continue to show up. In early December, the United States Department of Labor’s Bureau of Labor Statistics (BLS) announced the latest employment numbers. The official unemployment rate dropped a modest 0.4% down to 8.6%, the lowest rate since March 2009. There still remains 13.3 million people unemployed a seriously high number. The modest gain in employment is further tempered by the fact that according to BLS 315,000 people had given up looking for work. Even las t week we saw another drop in the number of people applying for unemployment.

Below Liberum has outlined in graphical format a November breakdown for CEO, CFO and overall C-level related turnover.

C-LEVEL RELATED CHANGES FOR NOVEMBER

CEO RELATED CHANGES FOR NOVEMBER

CFO RELATED CHANGES FOR NOVEMBER

For the month of November, CEO changes increased a huge 125%, CFO changes increased 111%, overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) changes increased 94% while board of director changes declined 11% as compared with November 2010 totals. The month to month change in executive turnover on the other hand was negative for November 2011 when compared with October 2011 totals. CEO changes declined 12%, CFO changes declined 15%, overall C-level changes declined a mere 2% and board of director changes declined only 3%. Liberum expects the fourth quater of 2011 to show an increase over the same quater in 2010. Stay tuned.

AMD Finally Fills CEO Post

2011-08-25T16:06:00.005-04:00

After over six months of searching for a new CEO to replace former CEO Dirk Meyer, who resigned back in January and had been rumored to be forced out due to his lack of vision, AMD NASDAQ has finally chosen a new CEO. AMD has selected Rory Read, Lenovo’s President and Chief Operating Officer to lead the firm as its new CEO. AMD’s search for a new CEO has been painfully difficult. The semiconductor firm, which has managed somewhat of a resurgence while under the direction of former CEO, Dirk Meyer, and its current interim CEO, Thomas Seifert still has a difficult road to true recovery and long term survival. While AMD has been reasonably successful in the PC world as second banana to I

ntel, the company has very far to go with regard to processors for mobile phones and tablets the current growth generators. AMD has been through rough waters for sometime and many potential candidates have chosen not to be considered for the CEO position. Throughout the CEO search process a number of potential candidate names have been rumored under consideration including Tim Cook, Apple’s soon to be new CEO after Steve Jobs made his dramatic resignation, Mark Hurd, Oracle’s co-president and former HP CEO, Pat Gelsinger the Carlyle Group Chief Operating Officer and others have all apparently turned down AMD.

Read’s selection to run AMD is a positive, the company has finally found someone to take on the challenge. While Read has an impressive background while at Lenovo as well as significant leadership work while working at IBM for twenty three years he has a monumental task ahead of him. AMD’s press release announcement contained a terrific spin on Read’s selection. we will just have to wait and see. At least company now has a new leader and get to work on addressing many of the firm’s future needs and strategic direction.

Investors need to closely monitor what Read does upon taking the reigns and going forward.

Second Quarter Executive Turnover Shows Real Growth

2011-07-19T12:19:00.001-04:00

With the end of the second quarter, the United States economy appears to have turned a major corner in relation to executive turnover. Executive turnover, as tracked by Liberum, has seen a continuing jump in the totals for June 2011 and the second quarter. The jump in turnover has been apparent when second quarter was compared with the same quarter in 2010 as well as in relation to the previous first quarter of 2011. The continuing jump in executive turnover appears to be at odds again with the level of employment and unemployment in the United States economy. Troubling signs for overall employment continue to haunt the U.S. economy as the recovery continues to limp along.

Now that we are finally seeing changes at the top of corporations, hope can increase that companies will finally begin to start hiring again. Liberum contends that the slow level of executive turnover over the previous number of years related to the reluctance corporate boards and top executives had to change top leadership during tough economic times except in situations where the firm in question performed so poorly that a top executive change was necessary or if a major strategic change change in strategy was needed. As we moved into 2011, we finally saw the level of unemployment bottom out.

Liberum expects that if the economy manages to recover, even ever so slightly, the level of executive turnover will continue to rise. Both the pent up demand for new top executives and the possibilities for new job opportunities will account for growing executive turnover. Also boards are expected to be more willing to make changes as the economy continues to move in a positive direction especially if the debt ceiling problem is resolved, even temporarily.

Below are three simple graphics outlining the quarterly management changes as registered through Liberum’s Management Change Database for 2008 through 2011 (second quarter) for CEO, CFO and overall C-level turnover. The first two quarters of 2011 dramatically illustrate the reversal in trends we have seen for a number of years. Executive turnover is again in the ascendancy. We expect this trend to continue unless the economy encounters some kind of major shock, lack of agreement on the debt ceiling, for example, a major sovereign bankruptcy (Greece) or something totally unforeseen.

Newell Rubbermaid Makes Wise Choice

2011-06-24T13:17:00.005-04:00

Newell Rubbermaid NWL (NYSE), the consumer products manufacturer, yesterday announced the selection of Michael Polk as its new CEO. Polk, currently the president of global foods, home and personal care at Unilever is also a member of Newell’s board ofdirectors. Polk will succeed Mark Ketchum who was selected as Newell’s CEO back in 2005. Ketchum back in January of this year announced his intention to retire. The firm hired a search firm to find a new CEO. Wisely, the firm selected a seasoned executive familiar with their business but with experience outside the firm. Polk, who is fifty years old comes in as CEO as Newell has failed to live up to expectations. While he has a difficult task ahead of him, he has both the skills and the drive to help find ways to make the firm perform better going forward.

Earlier today, thestreet.com’s Miriam wrote a piece expressing concern about expectations the new CEO will create about the firm. Remer wrote,

Jefferies analyst Douglas Lane cautioned that Polk will have his work cut out for him in managing expectations after Newell Rubbermaid recently trimmed its full-year outlook. The guidance revision came, in part, because of soft demand in some of Newell Rubbermaid’s consumer product categories such as baby and parenting.

I am not nearly as sanguine as the Jefferies’ analyst quoted. Polk has a real opportunity to shine in his new position. Stay tuned.

New updated article 7/12/11 – Globe and Mail’s David Milstead – Get ready for a nice bounce in Rubbermaid shares

Cisco CEO Can He and Should He Survive?

2011-05-11T11:39:00.000-04:00

Cisco Systems, Inc. CSCO (NASDAQ), the one-time darling of investors, finds itself in difficulty. The company designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide. Back in early April, the company’s well known CEO, John Chambers, was forced to admit the company had problems. According to a story in BizJournals, Chambers wrote a memo in early April to his employees in which he stated,

“We have disappointed our investors and we have confused our employees. Bottom line, we have lost some of the credibility that is foundational to Cisco’s success – and we must earn it back.”

Chambers went on to state,

… he will “address with surgical precision what we need to fix in our portfolio.”

The growing problems facing Cisco were made more problematic yesterday, when Microsoft announced the purchase of Skype. While most analysts have focused on the problems Microsoft’s acquisition could mean for Google and Apple, Cisco is also at severe disadvantage from this latest acquisition and is in a weaker position than the others to respond. While Microsoft has not shown great success in the past when it came to telecom acquisitions and the ultimate execution or integration of the acquisitions, the purchase of Skype was a brilliant move. If Microsoft can make the acquisition work, it will be beneficial in many ways for the firm and may even make its arrangement with Nokia a real winner going forward. Cisco on the other hand, only has more competition and a greater need for righting its ship.

Investors can expect tremendous pressure on Chambers going forward. His reign at Cisco seems more and more tentative as we move forward. He needs to make changes in the company and fast. Stay tuned.

First Quarter and March Executive Turnover Totals Reach Turning Point?

2011-04-14T10:19:00.002-04:00

As March has come to an end and the first quarter of 2011 is behind us, the United States economy appears to have turned a corner. Executive turnover has seen a real jump in the overall totals in March 2011 for the first time in over three years. This jump coincided with the significant drop in United States unemployment and the continuing growth in the number of jobs being created. According to the Bureau of Labor Statistics which released March’s latest employment figures,

Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8 percent, the U.S. Bureau of Labor Statistics reported … Job gains occurred in professional and business services, health care, leisure and hospitality, and mining. Employment in manufacturing continued to trend up.

Not enough time has gone by, however, to predict these specific positive changes in the economy will continue. The possibility for new shocks to the economy such as oil prices, commodity prices, wars and unrest abroad as well as other unforeseen events continue to restrain possible growth in the overall economy and to make some investors weary.

The last four years have seen continuing dramatic declines in executive turnover and large increases in overall unemployment. While executive turnover jumped significantly in March, the totals for the first quarter of 2011 were far more sanguine and actually declined from the same quarter in 2010. When the 2011′s first quater turnover numbers are compared with the previous fourth quarter of 2010, however, the number totals were quite different and far more positive.

Liberum contends the slow level of executive turnover over the last number of years relates to the fact that corporate boards have been reluctant to change top leadership during tough economic times except in situations where the firm in question has performed so poorly that a top executive change was essential or if a major strategic change change in strategy was needed. Below are some illustrative statistics of the declining turnover in top executive ranks of public companies. As we entered the new year, we finally saw some positive news with regard overall employment in the US Economy.

Liberum expects that as the economy continues to recover, the level of executive turnover will continue to rise. Both the pent up demand for new top executives and the possibilities for new job opportunities will account for growing executive turnover. Also boards will be more willing to make changes as the economy continues to grow.

Below is a simple chart outlining the quarterly declines as registered through Liberum’s Management Change Database for 2008 through 2011 (first quarter) for CEO, CFO and overall C-level turnover. The first quarter of 2011 dramatically illustrates the recent change in turnover when the totals are compared to the previous fourth quarter of 2010. The trend line is beginning to change.

Investors should keep a close eye on what happens with executive turnover during April and May.

RealNetworks CEO Leaves in Midst of Turnaround

2011-03-29T10:57:00.006-04:00

In what many analysts consider a surprise, Bob Kimball, RealNetworks' CEO and a real force in turning the troubled company in a new direction after little more than one year has abruptly resigned. So far, Kimball has not really commented on his move. According to the firm's press r elease outgoing CEO Kimball stated:

I took on this role to lead a restructuring and transformation of RealNetworks into a more lean, efficient and effective business and we have completed that phase of RealNetworks’ transformation. Over the past year we have simplified our business, removed more than $70 million in annualized operating expenses and created an entirely new, award-winning product called Unifi. We are delivering on our promise to build products people love. All this work has set the stage for Real to embark on its next phase with a clean bill of health and a strong foundation.

After 12 amazing years at Real, it is time for me to find new challenges and opportunities. I want to thank the Real team for their incredible work over the past 15 months – we’ve come a long way in a short time and I look forward to watching their success in the coming years.

In the meantime, until a permanent CEO is selected, RealNetworks appointed Executive Vice President Mike Lunsford to serve as interim CEO. The move change in leadership comes at a delicate moment in the firm's turnaround. Kimball who had been with the firm for over a decade before becoming its CEO replaced Rob Glaser, the company's founder. While in his leadership role Kimball according to a story by Brier Dudley for The Seattle Times,

The move comes as Real enters an intense several years that will test its plan to operate as a smaller company more focused on phone companies and other business customers, as well as games and consumer products.

During Kimball's tenure, the company also developed a new online media service that may compete with upcoming products from Google and Apple. But Real's stock has bobbed below $4 for most of Kimball's time as chief executive.

During 2010, sales fell 29 percent to $401.7 million and the company reported an operating loss of $34.5 million. Its gross margin improved to 64 percent, up from 60 percent the year before, when it lost $237.2 million.

All indications point to the firm finding a new CEO from outside the firm. Investors should keep a close eye on the company as it continues to find its footing.

Thinking Outside the Box is Not Always Best - Sears

2011-02-25T10:58:00.002-05:00

Eddie Lambert, the once famed investor, who has been struggling for the last number of years trying to turn his controllinginvestment in Sears into something positive, just announced, after a three year search, the appointment of another new CEO. Lambert’s selection of Lou D’Ambrosio, a former IBM executive and CEO of Avaya, is another suspect out-of-the-box selection that has many people scratching their heads. D’Ambrosio an effective high-powered executive with substantial CEO and management experience primarily in the telecom and tech fields has no experience in retail. A lack of retail

experience would seem to be imperative for an organization like Sears. While D’Ambrosio has been working with Lambert and Sears as a consultant he is now going to be in charge. What can Lambert be thinking?

According to an article by Jeannine Poggi for TheStreet.com,

In a letter to investors, Lampert said D’Ambrosio is the right man for the job due to his “information and technology background, leadership style and experience in leading and transforming a Fortune 500 company.”
D’Ambrosio led Avaya as it went private, “delivering attractive returns to its shareholders,” Lampert wrote. This could be interpreted that Lampert’s real goal for Sears is to take the company private, not to bring it back to retail dominance.

Analysts are wondering once again what Lambert really has in mind. He claims to be relying on D’Ambrosio’s tech expertise to help the firm online and his previous expertise in taking Avaya private, two valid points but the firm remains a major brick and mortar retailer, so it is difficult to see how this appointment would be truly effective. In an ABC News Story more questions were raised about the CEO selection.

Many analysts say the move to a bigger online presence is a good one. They also believe D’Ambrosio could help Sears with mobile technology as more shoppers buy products from cell phones.

But Sears also has one of the largest brick-and-mortar footprints in North America, and one of the least productive. That makes D’Ambrosio a misguided choice, said Credit Suisse analyst Gary Balter and other analysts.

“While Sears has played the financial game well, and has smartly invested in the Internet, the store experience remains one lacking due to underinvestment in the basics of retailing,” Balter said.

Investors should keep a very close eye on Sears and its new CEO to try and get an idea what they might have up their sleeve. So far, it does not look that promising.

Ranbaxy CFO Exits Adding To Firm's Management Changes

2011-01-28T10:34:00.003-05:00

Ranbaxy Laboratories RANBAXY.BO, the Indian based but Japanese majority owned generics pharmaceutical firm, just the other day lost its long time employee and current CFO, Omesh Sethi. Sethi announced his resignation from the firm without any explanation. The resignation comes approximately six months after the firm lost its CEO, Atul Sobti, back in August. Ranbaxy, one of the largest generic drug manufacturers and the largest by sales in India, has been beset with a number of problems. The company come under increased scrutiny and ultimately an import ban on a number of its generic drugs by the United States FDA back in 2008 after it was discovered there were a number of manufacturing defects at its plants. According to an article in Bloomberg,

The Food and Drug Administration in the U.S., the world’s largest drug market, in 2008 blocked the import of more than 30 generic medicines from two Ranbaxy factories in India because of manufacturing defects. There is no evidence the drugs are harmful though the violations may lead to defective products, the FDA said at the time.

The firm also lost its original CEO not long before Atul Sobti was hired. According to The Economic Times of India,

The departure of the CFO follows exit of other top senior executives which began with promoter and CEO Malvinder Singh's abrupt resignation in May 2009. A year later, his replacement Atul Sobti also stepped down citing differences with the Japanese firm in running the company.

The problems at the firm were complicated by the fact that control of the firm was moved to Japan after Daiichi Sankyo, one of the largest pharmaceutical company's in Japan, took a 64% controlling interest in the firm. The continuing management turmoil at the firm appears to relate to Daiichi Sankyo's approach for the firm. There was little dispute back in August when the firm's CEO, Atul Sobti resigned. He had major differences with Daiichi's approach to management and strategy. Investors need to keep a close eye on the firm. Ranbaxy has been making great strides to resolve the manufacturing problems that resulted in the U.S. import ban. So far, the firm still does not have a CEO permanently in place.

2010 Continues to See Major Declines in Executive Turnover

2011-01-05T10:01:00.000-05:00

The last four years have seen continuing dramatic declines in executive turnover. Even as the U.S. and other economies appear to be moving out of the great recession/financial crisis executive turnover has continued to decline while overall general unemployment has remained extremely high.

For 2008 CEO turnover declined nearly 10%, CFO turnover declined 14% and overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) turnover declined nearly 15% as compared with 2007 totals. The number totals continued to decline even more precipitously for 2009. CEO turnover declined 27%, CFO turnover declined 36% and overall C-level turnover declined 30% as compared with 2008′s already low levels. The numbers would be even more stark if compared with 2007.

The executive turnover totals continued their dramatic decline throughout 2010. Annual 2010 CEO turnover declined 22%, CFO turnover declined 13%, C-level turnover declined 29% from 2009′s totals.

CEO Watch - William C. Weldon, Johnson and Johnson, Update #2

2010-12-17T12:18:00.000-05:00

Back in late September we examined for the second time the problems William Weldon, Johnson and Johnson’s JNJ (NYSE) CEO, faced after firm encountered a spate of major over the counter drug recalls. Johnson and Johnson under Weldon’s leadership has not done a great job in handling these problems and for that matter, continues to find itself facing new problems. Just recently one of the firm’s subsidiaries had to recall one of the firm’s over the counter antacid products, Rolaids. Up to this point the board has appeared to support Weldon but we finally have seen some action in this area. Earlier this week J and J, as reported in the Wall Street Journal, announced some management changes that have increased the battle for Weldon’s succession. According to the Journal,

J and J, New Brunswick, N.J., named Alex Gorsky, head of the medical devices and diagnostics unit, and Sheri McCoy, who heads the pharmaceutical unit, as vice chairmen of the executive committee and members of the office of the chairman, effective Jan. 3, 2011.

The race to succeed Weldon had previously appeared to be narrowed to Gorsky and McCoy in September when Colleen Goggins said she planned to step down as head of J and J’s third major unit, the consumer healthcare business. The consumer unit has been beleaguered by a series of product recalls due to quality lapses.

Johnson and Johnson must find new ways to get its house in order. Despite good financial results the continuing recall problems could ultimately have a very adverse impact on the firm going forward. Stay tuned as succession plans appear to be moving full steam ahead.

Against the Grain - Pfizer CEO Resigns Unexpectedly

2010-12-06T13:38:00.001-05:00

Jeffrey Kindler, Pfizer’s PFE (NYSE) CEO for the last four years, announced his resignation on Sunday. The firm announced that Kindler would be replaced with longtime employee and executive, Ian C. Read. Kindler’s weekend resignation announcement has been interpreted by many as an ouster. Pfizer has been languishing for sometime under Kindler’s tutelage. This has all been happening while many of the other big pharma companies have been doing quite well. Despite a major reorganization and tremendous acquisitions (2009 acquisition of Wyeth Drugs) while in charge, Kindler, a lawyer by trade with a focus on sales, has found himself under pressure from shareholders and apparently the board. While in charge, Kindler saw a number of research related failures with regard to potential blockbuster drugs and has been in charge as major patented drugs will see their protection expire shortly, e.g., Lipitor.According to the company’s press release Kindler was quoted on the change as follows,

My nearly nine years at Pfizer and, particularly the last four and a half as CEO, have been extremely exciting and rewarding. I feel our team can proudly boast of some transformational accomplishments. However, the combination of meeting the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demanding on me personally. Now that we are about to complete a full year of operating Pfizer and Wyeth together, with our world-class team fully in place, I have concluded the time is right to turn the leadership of the company over to Ian Read. Ian is an outstanding and experienced pharmaceutical executive who I know will make the next phase of the company’s future a successful one. He is more than ready to take on these responsibilities and I am excited at the opportunity to recharge my batteries, spend some rare time with my family, and prepare for the next challenge in my career.

The sudden change at Pfizer seems to make a great deal of sense. The appointment of Read, an in-house executive with vast experience, is the right type of change for such a large company that needs to get back down to basics on all its different business fronts. Keep a close eye on the firm as we move forward. Read is already in charge.

InfoSpace Fails to Meet Wall Street Expectations - CEO Leaves

2010-11-15T11:46:00.002-05:00

InfoSpace INSP (NASDAQ), which was originally formed back in 1996, has gone through a number of transformations over the years. Prior to the Dotcom bust, the company was a high flier, after the bust the firm came way back down to sea-level. The company operates a number of online search services that rely on metasearch technology. InfoSpace primarily serves content providers and a significant portion of its business is focused on the mobile space. Just recently, the company released its earnings for the third quarter which was disappointing and held an earnings call (Earnings Call transcript via Seeking Alpha). Shortly after the Earnings Call its CEO, William J. Lansing stepped down after only 21 months in the position (see the 8k). The company immediately selected William J. Ruckleshaus, a member of the firm’s board and a former CFO of AudienceScience and SVP at Expedia, to serve as the firm’s interim CEO until a successor could be found for Lansing.

Some people have looked at Ruckleshaus’ selection as an attempt by the firm to pursue more acquisitions (see a piece by John Cook on Seattle’s Tech Flash). I’m not quite as optimistic as Mr. Cook. Investors should keep a close eye on the firm and the steps Ruckleshaus takes over the next few months and also who the firm ultimately chooses to take over as the new CEO.

Quarterly Executive Turnover Continues to Decline While Overall Unemployment Remains High

2010-10-13T13:07:00.003-04:00

Executive turnover has continued to decline throughout the economic and financial crisis and even as the recession ended according to the official proclamation by the National Bureau of Economic Research. Liberum Research’s latest quarterly turnover numbers for CEOs, CFOs, Board of Directors and C-level executives (defined to include CEOs, board of directors, CFOs, COOs, down to VP level) continued to show a drop in turnover for all key categories for the third quarter of 2010. The declining trend in executive turnover has continued since the first quarter of 2008 for all key executive turnover categories (see the CEO, CFO and C-level graphs below for quarterly turnover comparisons). While the first three quarters of 2010 continued to show significant declines in executive turnover, particularly when compared with the first, second and third quarters of 2009, we are beginning to see the overall executive turnover declines slowing when the quarterly figures are compared with each previous quarter of 2010.

Third quarter 2010 CEO changes dropped 27%, CFO changes dropped 8% and overall C-level changes for the third quarter dropped 32% respectively when compared with the third quarter totals for 2009.

The drop in changes for the third quarter of 2010 was much smaller when compared with the second quarter totals for 2010 - the drop was 21% for CEOs, 7% for CFOs and 6% for overall C-level changes.

While monthly executive turnover numbers have been smaller since early 2008, the investment opportunities they represent are still quite significant. Below Liberum put together three graphs representing the total executive related changes (CEOs, CFOs and C-level changes) by quarter for 2005 through the third quarter of 2010.

HP Selection of New CEO Slammed by Analysts and Market

2010-10-01T11:45:00.002-04:00

Yesterday’s long awaited announcement on who would replace Mark Hurd as Hewlett Packard’s HPQ (NYSE) CEO went down with a thud. The selection of Leo Apotheker, a former short lived CEO of SAP, was not hailed by the market nor many analysts. I am on the other side of the fence on this appointment. I think HP’s board has come up with a surprisingly excellent choice.While Apotheker was not very successful while CEO at SAP he faced a great deal of opposition within the organization and more than likely learned what he would need to do to be successful a second time around. SAP’s culture did not fit his needs for change. He should be able to make more change at HP than he was able to accomplish at SAP.

HP’s board appears to have gone strategic in its appointment. Its decision to go outside the firm for its selection should in the long run work out. Apotheker has the right background to help HP move into the software side of the industry in a big way without seriously jeopardizing its current bread and butter businesses. Who knows he might even move to go for an acquisition of SAP or some kind of alliance. If he can manage to keep many of the key players currently at HP and work with them to get the firm’s overall strategy right, he has a great chance at being very successful. He is a strategic thinker and he understands technology.

Shareholders and investors need to give him time to get up to speed. Stay tuned this latest selection may turn out to be a really winner despite the conventional wisdom.

For more:

Gigaom

CEO Watch - William C. Weldon, Johnson and Johnson, Update #1

2010-09-29T11:18:00.001-04:00

Johnson and Johnson’s JNJ (NYSE) longtime CEO, Bill Weldon remains on the hot seat. The numerous problems J and J has had with recalls and manufacturing oversight through its huge network of subsidiaries particularly its McNeil Consumer Healthcare firm continues to plague the firm and particularly the firm’s CEO. Weldon will be testifying later today before a House Congressional Committee. All eyes will be on weldon today to see how he responds to the criticism the firm has faced for its response to the continuing problems at McNeil as well as other parts of the firm. Despite the recall related problems, J and J overall has continued to remain very profitable but J and J more than most drug firms has relied on its reputation as a means for success all these years. Investors and analysts are beginning to question whether Weldon’s response to the problems were adequate. More importantly whether he managed the crisis sufficiently to protect the firm’s reputation. According to piece by Johanna Bennett in Barron’s Blog entitled J and J Reputation on the Line,

… a recent survey by CLSA analyst David Maris indicates that the company’s reputation among mothers and doctors may need a Band-Aide.

When 136 mothers and 50 pediatricians and general practitioners were asked to rate J and J’s formerly unassailable reputation before and after the recalls on a scale of one to 10 (1=horrible and 10=perfect), J andJ’s score fell 26% from an eight to a 5.9, according Maris.

And for some respondents, the recalls have permanently dented their regard for the the health care titan.

Weldon has a difficult task ahead of him before Congress and his shareholders. Despite his long reputation for fine management his survival as CEO may be an uphill battle as this problem continues to have legs. Stay close to the news on this one.

For more:

New York Times

Seeking Alpha

Wall Street Journal

CEO Watch - Nokia CEO Olli-Pekka Kallasvuo, Update #1

2010-09-13T10:32:00.002-04:00

It’s official Olli-Pekka Kallasvuo is out as CEO of Nokia NOK1V and in his place on September 21 is a former high level software executive from Microsoft, Stephen Elop. Liberum has been talking about the need for change at Nokia going back to October 16, 2009. The change at the top of Nokia was essential. Many analysts have been delighted with the change. The selection of 46 year old Elop has merit. He was in charge of Microsoft’s Business Division and is extremely well versed in software which is the area the Nokia needs to focus on to get its smartphone business at a point where it is capable of competing again with the Apples, Motorolas and Google phones. Elop also has had experience working with Nokia while at Microsoft and in his previous job at Macromedia.

The real question remains can Nokia without a true visionary at the top of the firm make the leap to effectively compete on high end with Apple, RIM, Google and even Motorola. I am somewhat skeptical. Change is certainly afoot at Nokia. Just a few hours earlier, Anssi Vanjoki, Nokia’s smartphone chief and a one time candidate for the CEO position, announced his resignation from the firm. Elop will now have a chance to appoint someone to his own specific liking. The firm desperately needs a visionary at the helm and in some of the key management positions if it has real hope to get back near the top.

Investors must keep a very close eye on new management at Nokia.

CEO Watch List - Bill Weldon, Johnson and Johnson

2010-09-07T14:04:00.004-04:00

Can Johnson & Johnson’s JNJ (NYSE) CEO, Bill Weldon, survive the firm’s repeated recalls? First it was a series of small recalls then it turned into a flood. Johnson & Johnson failed miserably to handle the public relations and the actual manufacturing related deficiencies in many of its McNeil Consumer Healthcare Division. As time passes it is hard to believe, the somewhat bewildered CEO Bill Weldon will be able to hang on as CEO at J&J. Mina Kimes wrote a terrific piece for Fortune that lays out the difficulties Weldon faces going forward. According to Mimes story,

Weldon, who has kept a low profile for the majority of his eight-year tenure, must now fight to salvage not just McNeil’s reputation — but his own. Surveys of business executives conducted by CoreBrand show that favorability ratings of J&J’s management have dropped from 88.3% in 2006 to 80.9% last quarter. That’s a significant decline, according to Jim Gregory, the branding firm’s CEO. “There’s something not right here that needs attention,” Gregory says. “[Weldon] needs to change it — or there needs to be a change of management.”

… Though some corporate image pundits have called for the CEO to resign, insiders say Weldon is unlikely to depart before next year, when he will be 62, the age at which J&J leaders typically retire. In fact, two former executives say Weldon may stick around even longer. He has reportedly told his board, one says, that his two younger heirs apparent, Sheri McCoy, the head of J&J’s pharmaceuticals sector, and Alex Gorsky, the head of medical devices, aren’t prepared to assume his role.

Only time will tell. Make sure to keep a close eye on the firm going forward.

Beckman Coulter's CEO Resigns

2010-09-07T12:06:00.001-04:00

Beckman Coulter BEC (NYSE), the biomedical testing company, announced today that its CEO, President and Chairman, Scott Garrett, has resigned. Garrett, who has been CEO since 2005 found himself under increased pressure as the firm failed to meet analysts expectations in it second quarter results. The firm has also found itself missing FDA quality standards on some its products. Back in June the company received a warning letter from FDA regarding the marketing of one its products. The combination of all these factors appears to have been what made for the resignation. Beckman Coulter’s stock took a hit a few months back and so far nothing has happened to make for the stock’s revival.

The company also announced that an interim CEO J. Robert Hurley a current employee would take charge as the firm’s interim CEO until a successor to Garrett is found. This executive change takes place as the company is still working on integrating the acquisition of Olympus’s diagnostic’s business into the firm. Hurley, the interim CEO was directly involved in the Olympus integration. Hopefully, his expertise will come in helpful in making this integration more successful.The company can be expected to continue struggling to work out all these problems while the CEO search goes on. Investors should keep a very close eye on the firm’s moves going forward.

For more:

Bloomberg

Press Release

Struggling A and P Takes on CEO After Another Poor Quarter

2010-07-23T11:14:00.001-04:00

The Great Atlantic and Pacific Tea Company GAP (NYSE), often referred to as as supermarket chain A&P, has appointed Sam Martin its new CEO and Chairman. The company has been struggling. Martin who just left his position as COO for Office Max replaces Ron Marshall as the CEO. Marshall, according to the press release,

left his position just after five months at the helm.

The struggling retailer is faced with another key management change at the top while trying to right itself. Just yesterday as part of the CEO announcement the company also announced its quarterly earnings which were far from reassuring. The firm reported a fiscal quarterly loss of $122 million. While the selection of a CEO at the firm has been an example in how CEO selections should not be made, Martin’s selection may actually be the medicine the firm needs.

Martin, who some speculated wanted to become the CEO of Office Max and may have known he was going to be passed over, has the requisite qualifications to help The Great Atlantic and Pacific Tea Company right itself has both high level operational expertise and a background in the food/supermarket business. Prior to his stint as COO at Office Max, which began back in 2007, Martin served as an executive at Wild Oats before it was acquired by Whole Foods. Prior to his work with Wild Oats Martin served with a number of other supermarket/food chains (Shopko stores and Fred Meyer).

Supermarket chains in general have been struggling during the economic recession as consumers seek out new ways to reduce their food bills and still get convenience shopping. Martin has a real challenge ahead of him but he appears to have the right type of expertise and business acumen to make a go of it. Keep a close eye on the company there may be some positive surprises over the next year.

For more:

MarketWatch

Businessweek

NASDAQ

CEO Watch - Nokia CEO Olli-Pekka Kallasvuo

2010-07-16T11:00:00.003-04:00

Over a month ago Ibriefly examined the continuing problems Nokia NOK1V, the world’s largest phone manufacturer, has found itself facing with the explosive growth of the smartphone market. Nokia unlike Apple and even Motorola, HTC, Samsung etc. has been a true laggard in this marketplace. With this growing competition in the smartphone marketplace Nokia’s share price has declined a whopping 67% in the three years since Apple introduced the iPhone (according to an article in Bloomberg). For some time some shareholders and analysts have been calling for the CEO, Olli-Pekka Kallasvuo’s head. The CEO has recognized the problems facing Nokia and recently has made some internal management changes to address the issues. Time is running out as shareholder and now possibly board member patience is dissolving. It is hard to see at this point in time as the iPhone4, Google Android phones, Blackberries and other sophisticated smartphones are coming into the marketplace what Nokia can do to reverse its problems. Nokia needs a big winner and it needs it soon.

Fair or not it, looks as if Olli-Pekka Kallasvuo’s time as CEO may be limited. It may be the right time for the Finnish based firm to hire a seasoned CEO from outside the firm.

For more:

Business Insider

2nd Quarter Executive Turnover Remains Slow - Inkling of Shift Arises

2010-07-06T12:04:00.002-04:00

Executive turnover in the second of quarter of 2010 continues to decline as the financial crisis and the related recession still impact executives at companies large and small. While overall worker employment has remained a serious problem, companies have done little to change top executives during the economic crisis. This is not to say there have not been major executive changes at public companies but rather the totals have been lower than in the past. Investors need to keep on top of executive changes as a way to monitor their investments or investments they might be considering.

Second quarter 2010 CEO and CFO overall changes both dropped 16% when compared with the second quarter totals for 2009. Overall C-level changes (defined by Liberum as covering board of directors, CEOs, CFOs, COOs, CIOs, presidents, EVPs, SVPs down to VPs) for the second quarter of 2010 dropped a whopping 37% when compared with the second quarter of 2009. The drop in C-level changes for the second quarter of 2010 was much smaller when compared with the first quarter total for 2010 - the drop was only 7%. The percentage drops for CEO and CFO changes for the second quarter were also much smaller when compared to the first quarter of 2010 than the totals for the first quarter of 2009. Below are three separate graphical representations of the quarterly change totals for CEO, CFOs and C-level executives.

CEO Watch List- Steve Ballmer, Microsoft Update #1

2010-06-23T11:40:00.001-04:00

Microsoft MSFT (NASDAQ) and particularly Steve Ballmer, the firm’s CEO, continues to find itself on the hot seat. More and more analysts and tech pundits are beginning to question the firm’s direction and leadership. Yesterday, Kara Swisher of the Wall Street Journal’s All Things Digital examined some of the problems facing Microsoft and it’s chief executive in her piece entitled, What to make of the Microsoft-Is-Falling-And-Can’t-Get-Up Meme. Swisher is by no means in the camp seriously worried about the firm’s immediate future but she suggests there is a real need for some change at the firm. According to Swisher,

Microsoft, as all tech companies do, needs to change, and a lot faster than it has so far; the company has been trying mightily to do so in search and recently, in mobile, where it is woefully far behind; its leadership under Ballmer, who took over from co-founder Bill Gates, has been meh enough to keep its stock moribund.

But, by no means recently–even if there is a better CEO for Microsoft out there than Ballmer–have I found the company execs ignorant about the tougher issues or unwilling to consider changes needed.

In fact, in its high-flying days, Microsoft did have a tin ear to criticism. No longer, and I would call its execs appropriately concerned about fixing its issues, although their efforts do suffer from the company’s massive size and inertia in making the right moves.

Thus, they certainly might not be successful at innovating, although these are the very kinds of problems Apple CEO Steve Jobs solved when he returned to a rotten company in what, in its current glory days, seems eons ago.

And Microsoft has been getting the same questions that are beginning to be asked about Google.

… That’s why–at this point–I can see no need for panic to set in about Microsoft…

… As for today, even though we are all terminal, the sky looks like it will remain intact at Microsoft for a little bit longer.

Swisher is rather pragmatic about Microsoft’s situation but pragmatism does not always reign particularly when you are talking about one of the largest and formerly most successful tech firms in history. Keep a close eye on Ballmer and Microsoft.

CEO Watch List- Steve Ballmer, Microsoft

2010-06-07T18:28:00.002-04:00

I have resisted putting Steve Ballmer, Microsoft’s MSFT (NASDAQ) CEO, on the Liberum CEO Watch List for sometime now. Ballmer’s ongoing startling statements about Microsoft and the industry along with his lack of innovation over the last number of years has begun to be examined by a number of specialists in the field. Rumors even are heard about bringing Bill Gates back. While it is hard to believe Ballmer is really at risk, maybe he should be. Just today, Adam Lashinsky, the Senior Editor for Fortune wrote a piece in which he said,

He (Ballmer) is presiding over the umpteenth reorganization of the company he has run for years, having succeeded his pal, Bill Gates. His online business, whose Bing search engine is making modest gains against industry leader Google, lost more than $700 million last quarter.

Yet here was Ballmer traveling down a semantical rabbit hole over the future of the PCs. In Ballmerworld, it doesn’t matter that the PC is shrinking in relevance. Any device is a computer, and people will want to use Windows because they’re so familiar with it. By the way, Windows 7, Microsoft’s latest release, is crushing it, further proof that computer users love Microsoft.

CEOs certainly are paid to put on a happy face and represent as well as possible. But hearing Ballmer at the Wall Street Journal’s D conference left me with one question: What is the guy smoking? Windows 7 has been a “success” in part because Microsoft’s previous effort, Vista, was such a stinker. Businesses the world over held off so long on upgrading their PCs that once Microsoft got it right they had no choice but to start replacing obsolete equipment.Semantics aside, Ballmer knows as well as anyone that the future of personal-computer industry is in mobile devices. Here, Microsoft’s hand is so weak that its most important global equipment partner, Hewlett-Packard (HPQ), is buying a beleaguered smartphone maker, Palm (PALM), for its superior mobile operating system.

Ballmer really needs to show he understands his marketplace and his competition and how he expects to deal with it. So far, in this regard he has been a dismal failure. Under his tutelage the stock has not really shown much shine either.Stay tuned.

Lagging T-Mobile USA Opts for New Strategy And CEO

2010-05-26T10:11:00.003-04:00

T-Mobile USA, which is owned by Deutsch Telekom AG (XE: DTE), the fourth place mobile phone carrier in the US behind Verizon, AT&T and Sprint, has finally opted for change. Early today the company announced that long time CEO, Robert Dotson, will be stepping down in February of 2011. In his place, the company appointed Philipp Humm to be the CEO-designate as of July 1. He will officially take over the CEO slot on February 2011. T-Mobile has continued to lag its key rivals in the United States and for some time now has needed a new strategy. Humm was previously the CEO of T-Mobile Deutschland from 2005 to 2008 and is currently the CRO of sales and services for Europe for Deutsch Telekom. He is well respected, understand the company and will bring new ideas to the table.

It is about time T-Mobile got serious about its operations in the United States. The firm needs to be either acquired or come up with a new strategy to compete in the ever competitive wireless marketplace. The selection of Humm appears to make a great deal of sense. Currently, T-Mobile USA has falling subscriber numbers and increasingly poor service a combination for further problems. According to a story by Archibald Preushat for the Wall Street Journal T-Mobile USA,

… likely had the worst first quarter out of all the wireless players in terms of subscriber-base development. T-Mobile USA lost 118,000 contract customers, consistent with recent trends, but the number of net new prepaid customers fell 92% from the fourth quarter, a startling drop that shows the strength of some of the other prepaid players. Sprint Nextel, which continues to lose its more valuable customers, showed particular strength in its prepaid business.

We may see some changes before the official change over in February of next year. Investors must keep a close eye on all the upcoming management changes and possible strategy shifts. Stay tuned.

For more:

GigaOm

Nokia Awakens from Big Sleep - Is it too late?

2010-05-11T12:34:00.003-04:00

Nokia NOK1V (Finland), the world’s largest maker of mobile phones, has for sometime now been lagging the big players in smartphones. Nokia’s Management has seemed to have been asleep at the wheel while Apple, RIM, even Motorola and Google have leapfrogged the firm with regard to smartphones. Finally after much consternation by investors and analysts, the firm just announced the appointment of Anssi Vanjoki, a longtime executive at the firm, and the company’s current marketing chief to serve as the new smartphone chief. The announcement along with other management related changes, some of which have occurred over the last year, continue to put the firm in a spotlight they would much rather avoid.

Nokia needs to get a fire under its design and production capabilities to compete with the other big players eating the firm’s lunch. The latest changes are expected to go into effect by July 1. Keep a close eye on Mr. Vanjoki as he takes on a truly challenging task that is vital to Nokia’s continued success.

Bloomberg updated 5/12

US Cellular Selects Fast Food Marketing Exec As CEO

2010-05-10T12:16:00.005-04:00

US Cellular USM (NYSE), the wireless voice and data service provider, announced the selection of Mary Dillon to be the firm’s new president and CEO. Ms. Dillon will succeed John Rooney who announced his planned retirement back in February. Ms. Dillon has been the EVP and Global Chief Marketing Officer of McDonalds since 2005. Her selection appears to be a terrific choice for CEO. She brings to the table the type of executive needed to help US Cellular compete in its market. She has both marketing and operational expertise. Ms. Dillon will take over the reigns of the firm on June 1. She faces real challenges to the company’s business but she has the skills to help the firm meet those challenges.

Rooney’s announcement back in February that he would be retiring raised concerns for the company. He had been instrumental in building the firm from a small company that collected roaming fees as its key source of revenue into a powerful regional carrier.

Keep a close eye on the transition and the business moves Dillon makes after she takes over the company.

Amgen Promotes CFO Bradway to President and COO - Succession Planning?

2010-04-27T10:52:00.001-04:00

Amgen AMGN (NASDAQ), the world’s largest biotechnology company, announced the promotion of Robert Bradway, the firm’s CFO, to President and Chief Operations Officer. Bradway’s promotion comes at the same time it was announced that George Morrow, the firm’s highly regarded EVP of global commercial operations, would retire as of January 31, 2011. Amgen is currently awaiting a hoped-for approval from the FDA for its potential blockbuster osteoporosis drug denosumab. If the drug gets approved, Morrow would have been instrumental in the drug’s promotion and sale worldwide had his retirement not been announced. That new responsibility for sheparding the drug will now pass to Bradway.

Bradway’s promotion indicates he is being groomed for the CEO position held by Kevin Sharer. Sharerwho is currently 62, is expected to retire upon his 65th birthday. All eyes should keep a close eye on Bradway. A Reuters article raised the specter that Amgen is moving more and more away from research and development towards acquisitions. The article pointed to Bradway’s promotion as another indicator of this growing trend.

Bank of America's Moynihan makes Smart Move

2010-04-14T10:54:00.003-04:00

Earlier today Bank of America BAC (NYSE) under the new leadership of Brian Moynihan made a smart move. The bank appointed Charles Noski as the new CFO. His appointment will fill the vacancy that has been open for a significant amount of time. Noski, an outsider to the bank, is highly qualified. According to Bank of America’s press release.

Noski had been the CFO of defense contractor Northrop Grumman, AT&T, Hughes Electronics and United Technologies. He has also served as a board member for a number of Fortune 500 firms including Morgan Stanley, Microsoft, ADP and others.

The bank continues to make significant management change related steps to right the ship and start moving ahead. This latest major appointment comes on the heels of a number of management related changes Moynihan has already taken in his short tenure as BofA’s new CEO.

For more:

Reuters

Declining Executive Turnover May Have Bottomed - Good News for the Economy?

2010-04-09T11:40:00.002-04:00

Executive turnover has continued to decline throughout the great economic recession. Liberum’s latest quarterly turnover numbers for CEOs, CFOs, Board of Directors and C-level executives (defined to include CEOs, board of directors, CFOs, COOs, down to VP level) continued to show a drop in turnover for all key categories for the first quarter of 2010. This declining trend in executive turnover has continued since the first quarter of 2008 for all key executive turnover categories (see the CEO, CFO and C-level graphs below for quarterly turnover comparisons). For the first time since early 2008, Liberum expects the declining trend in executive turnover to have bottomed. We expect to see turnover numbers to begin to increase as we move into the second quarter of 2010.

While the first quarter of 2010 continued to show significant declines in executive turnover when compared with the first quarter of 2009, we have finally seen the overall executive turnover declines slowing when the figures are compared with the last quarter of 2009. If this trend continues, increased executive change at the top of companies may actually mean the economy is in for real expansion and growth.

GRAPHICAL REPRESENTATION OF QUARTERLY EXECUTIVE TURNOVER 2005 - 2010

Investors' Management Change Conundrum - Inside or Outside CEO?

2010-03-30T16:16:00.001-04:00

Academics, investors, human resources, board members, corporate executives all have their own opinion on whethdr it is best to outside for a new CEO or hire from within. Liberum continually covers research that points to different conclusions on this question. A new report has come out that claims outside CEO hires tend to increase corporations’ market value. According top a story in Canada’s Globe and Mail, Spencer Stuart, the executive search firm, examined

… the track records of 210 new CEOs of large Canadian companies hired between 1995 and 2006, and measured how much the companies gained in share price during the CEOs’ first three years at the helm.

The results show better performance for CEOs hired from outside in all scenarios, but most especially when the firms are struggling and have forced out their existing CEOs.

The report challenges a view in corporate governance circles that CEOsuccessions work best when internal candidates are selected because they already know the company and need less transition time.

Anyone interested in this issue should contact Spencer Stuart to find out more about the study.

EasyJet Goes Outside the Box Again For A New CEO

2010-03-24T10:40:00.003-04:00

EasyJet EZJ (LSE) the European discount airline, as it has done so in the past, has gone outside the company for a new CEO with no experience in the airline industry. Yesterday the company announced it has selected Carolyn McCall as its next CEO. McCall currently is the CEO of the struggling Guardian Media Group, the company that publishes the UK’s Guardian and Observer newspapers. McCall has overseen most of the restructuring efforts that the newspaper group has undertaken to survive in the latest troubles facing newspaper industries worldwide. McCall replaces Andy Harrison who will become the CEO of the Whitbread PLC , the hotel and restaurant group. While McCall leaves one troubled industry for another in which she has no experience, the selection still has merit. According to a story by Robert Lea and Susan Thompson in the Times Online who quoted an EasyJet insider,

“The airline has been looking for someone who has experience of a highly competitive market, someone from a consumerfacing industry, someone at home with the transition to the internet and someone adept at government lobbying. Carolyn McCall was a very impressive candidate.”

The airline has seen a number of management changes over the last few months. Back in January the company put in place a new chairman, Sir Michael Rake chairman of BT Group PLC and CFO, Chris Kennedy an EMI executive. All the management changes have taken place after one of the company’s major shareholders and its founder, Sir Stelios Haji-Ioannou, expressed his objections to the company’s aggressive plans for expansion at the expense of dividends. McCall is expected to toe the line with regard to the founder’s needs. She also appears to be a very interesting choice. Stay tuned

Activist Investor Burkle Pushes New CEO on Barnes and Noble

2010-03-18T10:54:00.007-04:00

Activist Investor Ron Burkle, a major investor in Barnes & Noble (BKS) NYSE, has been pressuring Barnes & Noble’s board for some time. A few weeks back, Burkle accused B&N’s board of protecting the controlling family’s interests in the company after he tried unsuccessfully to increase his share in the company. Burkle has been viewed by the board and many others as working to take over the struggling book retailer. Today, shortly after the latest major dust up with Burkle, the firm announced that William Lynch would succeed Steven Riggio as CEO. Riggio, who is a member of the controlling family, after he leaves his CEO position will remain as the vice chairman of the firm. The company’s press release stated Riggio would remain actively involved in the company.

Lynch, who has run the firm’s ecommerce business, has been viewed as the person responsible for launching B&N’s eReader the Nook which has been intended to compete with Amazon’s Kindle and now Apples iPad. Besides the promotion of Lynch, the company also announced that the firm’s chief operating officer, Mitchell Klipper, would be promoted to CEO of the firm’s retail group.

Most analysts will likely view the latest moves as way to thwart further attempts by Burkle to get his way with the firm. There is no way this recent move puts an end to the drama playing out behind the scenes for control of the firm. In addition to Burkle, another activist investment firm recently bought a large portion of the firm as well.

Stay tuned.

For more:

The Deal.com (updated 3/22)

Canada's WestJet CEO Resigns

2010-03-16T10:46:00.002-04:00

Westjet WJA (TSX), Canada’s second largest airline and for some time considered its most successful, Monday announced the sudden resignation of its CEO Sean Durfy. Durfy took over the company’s CEO position back in 2007. He has been with the airline since 2004 when he joined to head the airline’s marketing, sales and airport operations. While Durfy has been instrumental in much of the low cost airlines success over the last few years, he has also been in charge of its efforts to grow which have seen a number of bumps in the road lately. The low cost airline has been experiencing ongoing implementation problems with its new reservations systems and has found itself straining under its continuing efforts to grow.

Durfy’s resignation announcement was coupled with the airline’s appointment of Gregg Saretsky as Durfy’s successor. Saretsky, the company’s current executive vice president of operations and vice president of WestJet Vacations, will take over as of April 1. Saretsky has only been with the firm since June 2009. He came to WestJet from Alaska Airlines where he worked for a decade. Prior to Alaska Airlines, Saretsky worked for the defunct Canadian Airlines.

Durfy announced his resignation yesterday. In the press release he was quoted,

“This was a very difficult decision for me; however, after careful consideration, I have decided that this is best for me and my family,” … “Those things I set out to accomplish at WestJet have now been achieved and I believe this is an appropriate time to allow others to carry the torch while I spend more time with my young family.”

After an agreed upon transition period up to September 1, Durfy will leave the firm and resign from the board of directors.

Despite many of the growing pains the airline has experienced lately, overall Durfy appears to have done a good job in managing the company. It will be very interesting to see what type of stamp Saretsky will put on the firm.

Stay tuned.

For more:

Financial Post

CTV News

The Vancouver Sun

I Aviation CA (update March 17)

Technitrol Takes on New CEO To Watch

2010-02-23T11:16:00.001-05:00

Technitrol TNL (NYSE), a worldwide producer of electronic components, appointed Daniel M. Moloney to be its new CEO. Moloney most recently has been an executive vice president with Motorola and the president of its Home and Network Mobility business. Moloney replaces James M. Papada III who has been the firm’s CEO and chairman. The company has been planning for the succession for a long time. Technitrol appears to have made a good choice for its next top executive.

Moloney had spent ten years at Motorola in a variety of high level positions. The announcement that Moloney will be leaving Motorola comes shortly after the firm made it formal in early February that it would be split into two independent companies. One company to be headed by Sanjay Jha, currently the co-executive of Motorola, would run the mobile phones and setboxes. This was the company Moloney would have worked for if he had not decided to leave Motorola and become CEO of Technitrol.Moloney appears to have the skills and background to run Technitrol. Keep a close eye on his moves for the next year once he gets up and running.

Energy Solutions CEO Resigns - Stock Tumbles

2010-02-19T13:59:00.005-05:00

Earlier today Energy Solutions Inc. ES (NYSE) announced that the firm's CEO and Chairman, Steve Creamer, had resigned his position effective immediately. The nuclear waste storage firm's stock price plummeted today. Creamer's resignation comes just two months after the firm's CFO, Philip Strawbridge, had resigned. The company immediately replaced Creamer with Val Christensen, who has been serving as the firm's president since 2008 and was previously evp and general counsel. The apparent abrupt management change was examined in a story by Bob Mims for the, The Salt Lake Tribune,

...slide may have prompted the new chief executive and the board to hold a quickly-announced teleconference call at mid-morning out of Boston, in which Christensen stressed that Creamer's departure - though coming earlier than expected - had been part of a succession plan approved by the board early last year.

"This was going to happen this year," Christensen said. However, he flatly refused to release detailed information on the reasons for Creamer's admittedly "abrupt" decision to resign some one to five months earlier than originally scheduled. Christensen said Creamer made his decision during a board meeting on Thursday.

"About a year ago, I was made [EnergySolutions] president as part of a longer term succession plan. The board and CEO Steve Creamer identified me as the most likely candidate. Steve's plan throughout the [past] year was to depart the company sometime in the spring or summer [of 2010]."

The dramatic management change requires investors to keep an extremely close eye on next week's fourth quarter earnings announcement and moves that top management takes over the next six to twelve months.

John Thain Gets Second Chance

2010-02-08T11:03:00.002-05:00

John Thain, the former CEO of Merrill Lynch, who found his reputation in tatters after Bank of America acquired Merrill in the midst of the financial crisis, has been given a second chance to revive his reputation. Yesterday, CIT Group CIT (NYSE) announced that Thain would immediately become the new CEO and chairman of the small business lender. CIT had gone into bankruptcy under the leadership of Jeffrey Peek who ultimately had to give up his leadership role of the firm.CIT has been a very important lender to small and mid-sized businesses. It finds itself coming out of bankruptcy and hopes Thain can work wonders with the firm. An article in Forbes summed up Thain’s situation with regard to the Bank of America acquisition of Merrill and how it impacted his reputation and firm.

As chairman and CEO of Merrill Lynch, Thain’s deal to sell Merrill was considered a lifesaving move for the company at the height of the financial crisis. But he then came under fire for having paid out $3.6 billion in bonuses to Merrill employees just before the deal closed, and for spending more than $1 million to redecorate his office at Merrill, despite its massive losses.

CIT announced yesterday, as the firm moves out of bankruptcy, that Thain would serve as the firm’s new CEO and chairman. Thain replaces interim CEO Peter Tobin who will remain on the company’s board of directors. The decision to select Thain may actually be a good fit. Thain’s expertise could actually be very beneficial to CIT’s circumstances.

What's Behind the Sudden Departure of PSS World Medical's CEO?

2010-02-05T11:11:00.001-05:00

Wednesday of this week, PSS World Medical Inc. PSSI (NASDAQ), a medical distributor company, unexpectedly announced the immediate departure of its CEO and Chairman, David A. Smith. Smith who had been with the firm since 1987 and was appointed CEO in 2002 and later his Chairman in 2007 has left the firm with virtually no comment. The company selected Gary Corless, another long term employee and the current COO, to replace Smith as CEO. The company also appointed Delores Kesler, a director since 1993, as the new chairman.Smith’s sudden and unexpected departure had an immediate negative impact on the company’s stock. Smith’s departure comes according to Kimberly Morrison, a reporter for the Jacksonville Business Journal,

The management change comes on the heels of several strong quarters of financial performance for the company. Despite a difficult environment, the company’s fiscal 2010 earnings growth is expected to be more than 30 percent.

PSS World Medical, a Jacksonville-based distributor of medical products, reported net income for the nine months ended Jan. 1 was $52.9 million, a 40.3 percent increase from the same period the year before. Although the third quarter results were slightly below analyst expectations, Kreger said the confirmed guidance suggested accounting and financial performance was not behind the change.

Investors will continue to wonder what exactly was behind the sudden change at the firm. Corless, the new CEO, worked quite closely with Smith and is likely to continue the policies Smith put in place. Anyone interested in this sector or specific company needs to stay on top of ongoing events. The reasons for Smith’s departure will more than likely come out.

Struggling Borders' CEO Resigns

2010-01-26T11:28:00.006-05:00

Borders Group BGP (NYSE), the struggling book retailer,

announced today that its CEO, Ron Marshall, has resigned as CEO and director of the firm effective immediately. Marshall was appointed CEO just over a year ago. Borders has been struggling for some time and has been facing increasing pressure from activist investors (Pershing Square Capital). At the same time the company has appointed EVP and Chief Merchandising Officer, Michael J. Edwards, as the interim CEO. According to a story by Mark Clothier for Bloomberg,

Borders… last reported an annual profit in 2006, has seen revenue drop for the past three years as consumers spent less on books and non-essential items amid declining home values and rising unemployment.

Marshall’s resignation comes after the company announced very disappointing sales news. According to a blog story in The New York Times,

Last week, the company announced a nearly 14 percent decline in sales over the 11-week holiday period ending Jan. 16, compared with same period last year. The company was also forced to issue a statement denying rumors that it had extended the time it took to pay bills to small publishers.

Rumors abound that Marshall’s comes as he is about to take a new CEO position.The interim CEO has a very difficult task ahead of him. Edwards has extensive retail experience but he has never faced a more daunting task than the problems currently faced by Borders. The search for a new CEO will need to find a possible miracle worker.

For more:

MarketWatch

Slate's Big Money (update 1/27)

CEO Watch - Vikram Pandit, Citigroup Update #3

2010-01-20T09:54:00.001-05:00

The ongoing saga at Citigroup continues. Vikram Pandit, who took over as Citigroup’s CEO two years ago, is approaching an imaginary make or break deadline. While Pandit is not responsible for the difficulties Citigroup got itself into, his management style and circumstances have not brightened his star as CEO. Throughout his tenure he has been making top management changes and has slowly addressed many of the problems facing the company, he has not, however, appeared to be a take charge executive and has often surrounded himself in a cocoon with a small group of close executives. According to a story by Eric Dash in today’s New York Times,

“We have made enormous progress in 2009,” Mr. Pandit said on Tuesday. The question is whether Citigroup and its leader are progressing quickly enough to satisfy restive employees and shareholders. Even some Citigroup executives say privately that they are worn out after a seemingly endless stream of late-night calls, emergency meetings and management turmoil.

… Given that showing, Mr. Pandit is under pressure to prove that the company can finally make money. Prince Walid bin Talal of Saudi Arabia, a major Citgroup shareholder, said last week in an interview with the Fox Business Network that he had told Mr. Pandit that the honeymoon was over. “Now it’s time to deliver,” he said.

The bank announced another terrible quarter the other day. while numbers were not a surprise, time is no longer on Mr. Pandit’s side.

For more:

HuffPost

Key Annual and Quarterly Management Change Numbers 2005 - 2009

2010-01-12T13:24:00.001-05:00

2008 and 2009 have had surprising results when examined for executive turnover. While the United States went into recession back in December 2007, and most of the world suffered from the growing credit/financial crisis, overall executive turnover levels followed a declining trend as we moved through 2008 and 2009.

For 2008 CEO turnover declined nearly 10%, CFO turnover declined 14% and overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) turnover declined nearly 15% as compared with 2007 totals.

The number totals continued to decline even more precipitously for 2009. CEO turnover declined 27%, CFO turnover declined 36% and overall C-level turnover declined 30% as compared with 2008’s already low levels. The numbers would be even more stark if compared with 2007.

The declines in executive management took place while overall unemployment in the United States and Canada continued to increase as we moved through 2008 and 2009. By the end of 2009 with the recession statistically over, the United States had, according to the U.S. Bureau of Labor Statistics, an overall unemployment rate of 10% one of the highest rates for the last few decades.The continuing declines in executive turnover were seen both on a quarterly and annual basis. Public companies, unless forced to by business events or scandals, have shown a reticence to make changes in their top executive ranks as the leaders of those corporations have made efforts, and in many circumstance extreme efforts, to tightened their belts, lower expenses, inventories and overall employee levels within the lower ranks of corporations. We expect that once the economy begins to truly recover, the level of executive turnover will begin to rise.

CEO Watch List - Robert Kelley, Bank of New York Mellon

2009-12-30T10:57:00.001-05:00

obert Kelley, the CEO of Bank of New York Mellon, who at one point was speculated to be a candidate to replace Ken Lewis as CEO at Bank of America, apparently may finds his own position at risk. Kelley, whose candidacy for the Bank of America CEO position was a frequent on-off affair, was ultimately forced out of consideration for the BofA position, according to a number of analysts, when news came out that he would need to get an exorbitant deal to take the job at Bank of America. There was no way in this current atmosphere that BofA would have been able to move forward with a large compensation/buyout package. Now according to story by American Banking News,

… many are questioning Kelly’s commitment to Bank of New York Mellon, since a lack of pay restrictions might have catapulted him to Charlotte. BNY Mellon spokesperson Rob Gruendl commented that “Bank of America pursued Bob Kelly and they never really got close.” However, this should not ease the concerns of investors. Bove rhetorically asks “Is he here for the duration or will he jump if some other institution, not as influenced by the government, meets his price?”

I have placed Kelley on the CEO Watch List but remain skeptical his position at Bank of NY Mellon is truly at risk.

Insight Enterprise, Inc. Appoints New CEO to Fill Vacancy

2009-12-21T11:25:00.003-05:00

Insight enterprises, Inc. NSIT (NASDAQ), a distributor of computer hardware and software, pushed out its former CEO, Richard Fennesy, back in early September of this year (see earlier blog). Last week, the company finally selected a new president and CEO to take Fennesy’s place, Kenneth Lamneck. Lamneck will also join the company’s board. He will replace the current interim CEO, Tony Ibarguen who seemed to be hoping to get the position permanently. Prior to his new position, Lamneck was president of Tech Data America’s division. According to a story by Andrew Johnson for the Arizona Tech Republic,

Chief among his (Lamneck) tasks as the Fortune 500 firm’s new leader will be addressing internal operational challenges stemming from recent acquisitions and distractions from a major accounting restatement early this year.

The article goes on to quote the chairman and co-founder, Timothy Crown, from a phone conversation in which he referred to Lamneck’s previous work,

“By putting up good numbers quarter after quarter, . . . it gives me confidence that he’s the right guy for us,”

Appointing a CEO from the outside is the right move for Insight. It is very early to determine, however, whether Lamneck is the right guy. The Arizona Tech article mentioned a few analysts that question his specific expertise forInsight’s business approach and products.

The fact that most of Lamneck’s experience has been in IT distribution could be a challenge for the new executive, according to Matthew Sheerin, an analyst with Thomas Weisel Partners in New York.

Unlike Insight, which typically sells hardware and software directly to businesses that use it, Arrow and Tech Data distribute technology to resellers like Insight or manufacturers that integrate components into finished products.

Lamneck faces real challenges in making his new position a success. According to Scott Campbell, who wrote a story for ChannelWeb,

Next year, Lamneck will also tackle starting up a hardware business in Europe, where Insight has a strong software presence after acquiring Software Spectrum. “I’ll be spending a good amount of time understanding how to address that. That’s a big opportunity and it’s an important part of the early agenda,” he said.

In addition, Lamneck faces hurdles trying to integrate Insight’s legacy product business with more value-added services, such as those picked up by Insight’s acquisition of networking solution provider and managed services provider Calence.

One thing for sure, Lamneck is eager to take on the challenge. Stay tuned.

BofA's Long Nightmare Maybe Over - Insider Moynihan Gets the Crown

2009-12-17T11:20:00.003-05:00

While I have been in the camp pushing for an outside candidate to replace Ken Lewis as Bank of America’s CEO, the board finally has made a decision and went with inside candidate Brian Moynihan. Moynihan, who is currently the president of the bank’s consumer and small business banking, is very familiar with all the working parts of the bank and his ascension should make for a relatively smooth transition, a positive for the selection. Paul Davis of the American Banker wrote,

Moynihan has maintained a relatively high profile at B of A since joining the $2.39 trillion-asset Charlotte company in 2004 when it bought FleetBoston Financial Corp., where he was a top lieutenant to chairman and CEO Charles Gifford. Many observers said he appeared to be a frontrunner because Gifford and Thomas May, a former Fleet director, were on the committee charged with finding Lewis’ successor.

According to a piece in the Wall Street Journal’s Deal Journal a Citi analyst said,

He is also generally well liked by the investment community, and from our conversations with current and former BAC employees, he is consistently viewed by his peers as a very intelligent and strategic thinker.

Paul Davis wrote a story in today’s American Banker in which he quoted Anthony Polini an analyst for Raymond James Associates. Polini said,

… Choosing Moynihan appears to endorse the business model built over decades by Lewis and predecessor Hugh McColl Jr., including coast-to-coast retail banking and market leading positions in mortgage, credit cards, brokerage and investment banking. Moynihan was picked to run the investment bank in January following the ouster of former Merrill Lynch & Co. CEO John Thain.

“The selection says that while the economy and recession have been lousy, the board still believes that the company model is intact,” Polini said. “It is a vote of confidence for the strategy.”

Moynihan has his work cut out for him. While the bank has managed to recently pay back the government for the TARP related money many difficulties remain. While the government will have to go along with the new choice, it is hard to imagine it was delighted with the board’s choice for an inside candidate. The new selection comes on the heel of the announcement that the vice chairman of Bank of America Merrill Lynch, William J. McDonough would resign.Stay tuned as it all plays out. There are likely to be more changes on the board and within the executive ranks.

GM's New Chairman Turned Interim CEO, Shows How to Take Charge

2009-12-15T10:43:00.002-05:00

Ed Whitacre, GM’s chairman and now interim CEO, appears to be in the mold of Lee Iaccoca who took charge of Chrysler back when the government saved it the first time around. While Whitacre, a former head of AT&T, is no car guy like Iaccoca, he has quickly taken charge of the firm and instituted a number quick and major changes. He has already made a number of major changes in management, he has also been taking great strides to build up employee morale throughout the company. Automobile workers are beginning to get the sense there might be some light at the end of the tunnel. Today’s New York Times has a story by Bill Vlasic entitled, In the Changeover at G.M., a New Hands-on Attitude. Vlasic writes,

In his new role as chief executive of G.M. as well as chairman, a post he has held since July, Mr. Whitacre is focusing on shaking up the automaker’s famously bureaucratic culture by singling out individuals and giving them both the responsibility and authority to make things happen.

“The only place there was any really solid accountability here was right at the top,” said Mr. Whitacre, 68, delivering his blunt assessment of the corporate culture at G.M. in his soft-spoken Texas drawl.

“I want to make sure people understand that the responsibility for this company to be successful is not just with the C.E.O.,” he said. “It’s them.”

“My style is really just to say, ‘let’s get going,’ ” he added. “Let’s do something, let’s move, and let’s not be constrained by something that has happened in the past. Nobody is going to be fired for trying something new around here.”

Whitacre is showing CEOs around the country possible ways to make changes at companies faced with inertia and growing problems. His management style may have some inherent risks and his lack of automobile related expertise is a potential problem but he has shown what a strong and savvy CEO can do in a little amount of time. Stay tuned.

Unilever CFO Leaving After Less than One Year of New CEO in Place

2009-12-10T12:22:00.003-05:00

Jim Lawrence, Unilever’s UL (NYSE) CFO is leaving the company. Lawrence, who was appointed CFO back in August of 2007, has chosen to resign his position. He leaves the job less than a year after CEO Paul Polman was put in place. Lawrence is one of many changes that have occurred in the executive ranks since Polman took the reigns of the firm. According to a story by Clementine Fletcher and Jeroen Molenaar for Bloomberg,

Lawrence, 57, chose to resign and won’t receive severance pay when he leaves at the end of 2009, spokesman Flip Dotsch said. The executive will keep his “significant” stake in Unilever, Dotsch said. His holding is worth about 14 million euros ($21 million), data compiled by Bloomberg shows.

Speculation has been around that Lawrence had hoped to get the CEO position. Whatever the reason, Polman has been making real strides to the company back on track to compete more effectively with its key rival Proctor & Gamble.The Bloomberg reporters went on to write,

The first reason for the departure is “probably personal, the second is probably because he wants to become a CEO,” said Marco Gulpers, an analyst at ING Groep NV in Amsterdam with a “buy” on the stock. “They go their separate ways in harmony, as I understand. I think his successor will be an outsider.”

Keep a close eye on who Unilever selects to replace Lawrence and also where he ends up and what he ends up doing.

For more:

Reuters

Times Online

Speculation is Growing on Possible GM CEO Candidates

2009-12-08T11:42:00.002-05:00

Now that Ed Whitacre, GM’s chairman, has taken over as interim CEO and is moving at sprint speed to get GM back on track, speculation is beginning to arise on possible candidates to fill the CEO position. It was made public yesterday that Spencer Stuart, the executive search firm, will he handling the CEO search for GM. While a number of analysts think Whitacre as interim CEO might actually end up with the job, Randolph Gulian, evp/general manager for recruitment process outsourcing and executive search for Allegris RPO, in an interview with the Deal.com has come up with a number of very unusual but possible candidates. During the interview, Gulian mentioned Mark Hurd, HP’s CEO and General Electric’s John Rice. While neither of these men may actually be candidates the possibility of someone big from outside the automobile industry may just be the way to go. Check out the entire interview, Gulian seems to be on to something.

GM Update: It's official - Henderson out, Time Magazine's Alex Taylor III Explains Why

2009-12-02T13:55:00.003-05:00

Alex Taylor III wrote a brief story for Time on GM’s surprise announcement that Fritz Henderson was out as GM’s CEO and Ed Whitacre, GM’s chairman would serve as interim CEO until replacement is found. Taylor was right on the mark in his explanation. IN the story he wrote,

Henderson will be remembered as being as smart and experienced as any GM CEO, but he appeared tone-deaf when it came to listening to Whitacre and the rest of his board of directors. Since he had no role in picking them and they owed him nothing, that proved to be a fatal mistake.

When the board made it clear that it wanted Henderson to replace chief financial officer Ray Young, Henderson dawdled. He could rightly complain that government curbs on executive pay made it difficult to recruit experienced financial executives, but it must have looked to the board as if he couldn’t make a decision or was simply stalling.

Check it out, it’s worth the read.

For a bit more read:

Slate

Not Official - Fritz Henderson, GM's CEO to Resign

2009-12-01T16:47:00.001-05:00

The internet is abuzz with rumors that Frederick “Fritz” Henderson, GM’s CEO who took the reins after GM’s longtime CEO Rick Wagoner was forced out, is about to resign. The rumor is yet to be confirmed but appears quite plausible. According to CTV News Chairman Ed Whitacre, Jr. will serve as the interim CEO until a replacement is found for Henderson. Let’s hope GM selects someone innovative and ready to go. While Henderson was a vast improvement over Wagoner he has still not shown the kind of leadership necessary to take the new company out of the abyss.

Marks and Spencer Hooks Big Fish for CEO

2009-11-18T10:59:00.002-05:00

Marks & Spencer’s MKS (LSE) well known CEO Sir Stuart Rose, who has been instrumental in turning the fortunes of the British clothing retailer around, will officially be replaced next year. The company has been working on a CEO search for nearly two years. Rose was even on my CEO Watch list back in September 2008. M&S selected Marc Bolland ,the highly regarded CEO of supermarket group William Morrison Supermarkets PLC, as it new CEO. Bolland is a real catch for M&S and a serious loss for William Morrison. According to a story by Sarah Shannon for Bloomberg,

Bolland joins M&S as the company seeks to restore same- store sales growth after two years of decline. He spent three years as CEO of Morrison, restoring profit after the 2004 purchase of competitor Safeway led to the company’s first-ever loss. M&S gets close to 50 percent of sales from food.

“To get someone with credibility in place is a huge positive,” said Paul Mumford, a fund manager at Cavendish Asset Management who holds Marks stock. M&S’s food division has been “suffering” from cheaper-priced supermarkets and Bolland will “help them move towards winning back market share.”

… The appointment “removes the uncertainty that’s been hanging over the stock for some time,” according to Mumford.

… “He brings a wealth of consumer marketing experience and has made a great success of his time at Morrisons,” Rose, who will remain as M&S’s part-time chairman, said in the statement. Rose will stay on to “ensure a smooth transition,” the retailer said, and will leave as planned by July 2011.

Bolland’s selection is a real feather in M&S’s hat. Despite the long amount of time it took to find a CEO, Bolland has many of the qualities M&S needs as it moves forward. According to a story by James Davey and Mark Potter for Reuters,

Bolland is widely regarded as having delivered a successful turnaround at Morrisons. Previous to that job he was chief operating officer at Heineken (HEIN.AS) based in the Netherlands.

… He took the reins from Ken Morrison, son of the founder and a major shareholder, and showed the kind of diplomacy he may need during what could be a period of powersharing with Rose.

Rose said the handover period would be about six weeks.

Ignoring some analysts’ calls for him to sell off Morrison’s food manufacturing operations and invest in non-food ranges, Bolland stuck with the group’s traditional “Market Street” format of fresh food counters and gave it a makeover.

Combined with innovative promotions and new product ranges, he transformed Morrison into the fastest growing of Britain’s top four food retailers for most of the past two years.

Bolland’s greatest risk as M&S’ new CEO is his lack of clothing expertise. He seems to be a quick learner and I would expect he will rely on his team to help him come up to speed. Stay tuned.

For more:

EMS Technologies Makes Change at the Top

2009-11-13T11:00:00.001-05:00

EMS Technologies EMLG (NASDAQ), the maker of software used in satellite and ground networks, on Wednesday announced the immediate resignation of Paul B. Domorski, as CEO and board member of the firm. In his place, the company selected Neilson A. Mackay, the company’s executive vice president and chief operating officer. The announcement came shortly after the firm’s stock suffered a 28% fall after the company announced a sizeable decline in net profits for the third quarter. According to a story by Peralte C. Paul for the The Atlanta Journal-Constitution,

John B. Mowell, EMS Technologies’ chairman, said the change is not because of the company’s recent earnings performance. The company reported last week it made a third-quarter profit of $5.3 million, down from $6.1 million a year earlier.

“It was a tough decision; it was not instigated by earnings,” Mowell said in an interview Wednesday. “This is not a reaction to an over-weakness on the part of Paul. He is a great leader, and he is a great man.”

The chairman then went on to state,

… the board opted to put Mackay at the helm because the company needs a leader with the technology and engineering background in addition to the business credentials.

It appears obvious that despite what the chairman said, the change was precipitated by the significant earnings decline and poor performance of the firm during the third quarter. The change from within may actually bode well for the firm going forward. Mackay has been with the firm for some time and understands the business. Domorski was not the only key change at the firm over the last number of months. Back in August , David A. Smith abruptly resigned as vice president and general manager of the company’s Defense and Space Division.Keep a close eye on the firm for the next couple of months.

Must Read - AIG's Benmosche Threatens to Jump Ship, Wall Street Journal

2009-11-11T11:04:00.006-05:00

Anyone following top executives has to read today’s story by Liam Pleven, Serena NG, and Joann S. Lublin in the Wall Street Journal. The column is entitled, AIG’s Benmosche Threatens to Jump Ship. Benmosche, AIG’s hard charging CEO, appears to be exacting pressure on the AIG board and the Obama Administration.

At a board meeting last week, the strong-willed industry executive told fellow AIG directors that he was “done” but agreed to think it over after other board members reacted with shock, according to the people.

… It isn’t clear whether Mr. Benmosche would actually resign. In his short tenure at AIG, he has developed a reputation for making provocative remarks and ruffling feathers as he seeks to achieve his goals.

He has only been CEO for three months and continues to make waves. He has a little of AIG’s famous former CEO Hank Greenberg in him. Check out the story.

For more:

CEO Watch List - S. Sundaresh, Adaptec Update #1

2009-11-03T10:19:00.002-05:00

Sundi Sundaresh’s reign as Adaptec CEO is looking more and more precarious. Steel Partners, an activist investor/shareholder, is claiming to have the votes to get him dismissed. Steel Partners has been working for more than a year to make management changes at the firm. According to a story by Chris Mellor in the UK’s Register,

AP is now reporting that Steel Partners claims it has amassed enough proxy votes from shareholders to boot Sundaresh off Adaptec’s board. The board says it’s waiting for certification of the votes cast before ceding or claiming anything.

If Steel Partners is certified as having sufficient written consents from shareholders then Sundaresh better pack his CEO bags, as can the anti-Steel Partners board members. Adaptec faces having a new CEO, probably an interim one, and a new board that will quite rapidly announce a new strategy aiming at getting Steel Partners a return on its Adaptec investment.

Stay tuned as the answers start rolling in on Sundaresh’s fate as well as that of the firm.

For more:

Steel Partners Press Release

Praise for BP's CEO

2009-10-28T10:04:00.000-04:00

Tony Hayward, the CEO of oil giant BP, deserves credit for BP’s latest performance. According to breakingviews.com in the New York Times,

The worst may be over for the major oil and gas companies, if BP is any sign. The oil giant’s profit almost halved in the third quarter from 2008. But the drop was less than investors feared and income rose from the preceding quarter. Tony Hayward, the chief executive, can take as much credit as the recovering oil price for BP’s performance.

Hayward took over the CEO post at BP back in May 2007 after BP’s CEO at the time, Lord Brown, resigned after a legal injunction was lifted that had prevented publication of details about his private life.

CEO Watch List - S. Sundaresh, Adaptec

2009-10-26T11:30:00.001-04:00

Adaptec’s ADPT (NASDAQ) CEO, S. Sundaresh, has come under increasing pressure. Adaptec creates hardware and software to manage, protect and store digital data. Last week on October 22, RiskMetrics Group and Proxy Governance Inc. pressed for the removal of Sundaresh as Adaptec’s CEO. The pressure ratcheded up today when Steel Partners, the activist hedge fund and large shareholder in the company, continued its push to get Adaptec shareholders to follow suit by signing what is known as the White consent card. Steel Partners put out a press release today over Business Wire that was included in a Reuters link. Adaptec continues to fight back to try and stop the Steel Partners push. Back on October 6, Adaptec put out its own release to counter the arguments being made by Steel Partners.

Keep a close eye on how this all plays out. Activist investors are beginning to raise their heads again.

Caterpillar Shows How Succession Planning is Done

2009-10-22T11:10:00.001-04:00

Caterpillar CAT (NYSE) today announced its CEO succession plan for the retirement of current CEO, James W. Owens. The company has picked an insider, Douglas R. Oberhelman, to succeed Owens. According to the firm’s press release,

The Board of Directors of Caterpillar Inc. (NYSE: CAT) elected Douglas R. Oberhelman to the offices of Vice Chairman and Chief Executive Officer – Elect, effective January 1, 2010. Oberhelman, 56,

currently serves as Group President of Caterpillar with responsibility for the company’s engine and gas turbine businesses, human services, rail services and remanufacturing divisions

…. Announcing the succession plan at this time allows Oberhelman to concentrate on aligning resources for the future and defining critical success factors for Caterpillar’s leadership going forward. He will serve as Vice Chairman and Chief Executive Officer – Elect until the June 2010 Caterpillar Board of Directors meeting, at which time he will be elected Chief Executive Officer and a member of the Board of Directors, succeeding James W. Owens, 63. Owens will continue to serve as Chairman of the Board and Chief Executive Officer until July 1, 2010. He will remain as Chairman of the Board through October 31, 2010, when he will retire in accordance with the company’s long-standing mandatory retirement policy and be succeeded by Oberhelman at that time…

Expect a relatively smooth transition going forward. More firms need to take heed and examine what Caterpillar has done on CEO succession.

Immersion corporation CEO Resigns and Leaves Immediately

2009-10-21T13:10:00.002-04:00

Immersion Corporation IMMR (NASDAQ) which develops hardware and software for simulating tactile experiences — such as the feel of an object or the jolt of an explosion during a video game — in order to enhance on-screen events saw its CEO, Clent Richardson, leave today. The company has been at risk of being delisted from NASDAQ. Just the other day NASDAQ,

granted an exception to Rule 5250(c)(1) of its listing standards to enable Immersion’s Common Stock to remain listed on NASDAQ while it completes its internal investigation and restatement of its historical financial statements.

Immersion has appointed former CEO, Victor Vegas as the interim CEO.

Keep an eye on the moves Viegas takes and who the board settles on to take the CEO position. There may be more here than meets the eye.

Poor Earnings - CEO change?

2009-10-20T14:02:00.001-04:00

Are we beginning to see some change in the top management environment? Throughout the current recession we have seen most public companies stay with their top management even as their firms continued to show weak results. Just lately, we have begun to see some companies that have fared poorly lately experience changes at the top. In my previous post, I examined the change at Nokia after poor performance. Now we have the announcement that Eric Claus the CEO of the Great Atlantic and Pacific Tea Company (known as A&P) GAP (NYSE) will be leaving his position immediately. Claus’ departure comes as the company’s performance continues to slide. While the change might not be considered a huge surprise it comes without a real successor ready to take Claus’ position. In the interim, A&P will be run by Executive Chairman and former CEO, Christian W.E. Haub. According to a story in the Wall Street Journal byKelly Nolan and Veronica Dagher,

Haub is also partner and co-CEO of Tengelmann Warenhandelsgesellschaft KG, A&P’s largest shareholder.

We may start to see more and more changes at the top of companies that fail to perform up to expectations.

For more:

Bloomberg

Marketwatch

APP.com

Poor Financial Results Usher in Quick Management Changes

2009-10-16T12:34:00.004-04:00

Nokia NOK (NYSE) the once indomitable Finnish based wireless phone company just announced some management changes. Nokia who has found itself with an uphill battle in today’s smartphone era is battling Apple and many of the others. So far, its results have been nothing to brag about. In a story hat appeared on Newsvine,

The company said Timo Ihamuotila, head of global sales, will replace Rick Simonson as the chief financial officer on Nov. 1. Simonson will head the mobile phones sector in the devices unit.

Simonson has been CFO since 2004 and will continue to be on the executive board, Chief Executive Officer Olli-Pekka Kallasvuo said.

“After six successful years as CFO, it is great to have Rick move to such an important operational role,” Kallasvuo said. “Rick Simonson’s deep knowledge of the business and its financials will be valuable
for the significant part mobile phones play in Nokia’s business.”

These changes are surely not the end of the problems facing the company.

For more:

CEO Watch Jeffrey Peek, CIT Update #2

2009-10-13T09:23:00.005-04:00

Back in July, I placed Jeffrey Peek, CEO of troubled business lender CIT, on the CEO Watch list. Early today news came out that Peek, Chairman and CEO, would resign his position at the end of the year. Too often these days top executive changes take place very late in the game. Let’s see if CIT can find a way out of its troubles and bring in a leader that can help its circumstances. According to a story by Alan Rappeport for the Financial Times,

Peek’s resignation comes a little more than a month after CIT extended his contract by another year, signaling that he would lead the company through its restructuring. In his new contract, which was set to expire in September 2010, Mr Peek was prohibited from any compensation not permitted under the terms of the government’s troubled asset relief programme and lost the privilege of using the corporate aircraft.

Hopefully more companies will take a cue from CIT’s troubles and set in place succession plans and at a minimum, make management decisions more quickly when the circumstances require changes.

For more:

Bloomberg

NPR

WSJ Deal Journal

Liberum Research - Third Quarter Executive Change Comparisons Show Declines

2009-10-06T11:15:00.004-04:00

The overall unemployment figures continue to diverge with executive turnover figures compiled by Liberum. Liberum has just completed analyzing third quarter figures for executive turnover. The key totals showed a continuing decline in executive turnover for CEOs, CFOs and overall C-level management as compared with the same time frames in 2008 and 2007 (view graphs below).

CEO turnover declined 23%, CFO turnover declined 36% and overall C-level turnover (from board of directors on down to corporate vice presidents) registered a 24% decline for the third quater of 2009 as compared with the third quarter in 2008. The decline percentages were even larger when compared with the 2007 third quarter.

Investors need to keep a close eye on specific executive changes as well as the actual trends.

CEO Watch Ken Lewis, Bank of America, Update #8

2009-09-30T23:24:00.002-04:00

It's official, Ken Lewis, Bank of America's embattled CEO announced his planned resignation for the end of the year. Lewis in a letter to Bank of America employees explained his reasons for resigning. The letter included in the WSJ's Deal Journal stated that Lewis' decision to resign was his alone and that he was not pressured to do so. Whatever the reason, his planned exit is the end of a sad chapter at the bank and hopefully the beginning of a new era for the bank, an unlilkely scenario at this point.

Are executives Beginning to Find Themselves Back on the Hot Seat?

2009-09-29T11:44:00.001-04:00

Liberum Research’s executive turnover numbers do not yet show an increasing turnover trend. There are, however, more and more specific situations where CEOs and CFOs are resigning as corporate performance has lagged. Just yesterday, Silicon Image SIMG (NASDAQ) the connector chip maker’s CEO, Steve Tirado, resigned after the firm announced its third quarter revenues were expected to be much lower. We are beginning to see more and more top executives leave their positions as their respective firms have failed to perform.

Biotech Terminates CEO and Others

2009-09-29T10:29:00.003-04:00

The board of directors of Sequenom SQMN (NASDAQ) terminated the employment of the president and CEO, Harry Stylli and Elizabeth Dragon, the SVP of R&D after an investigation into the mishandling of test data. Sequenom a biotechnology firm involved in the development of a test for Down’s Syndrome acted quickly after the results of the investigation was completed. Other employees have been affected as well including the firm’s CFO. According to story in GenomeWeb Daily News,

The clear out comes following the completion of an investigation into the mishandling of R&D test data and results on the firm’s SEQureDx Down syndrome test. Sequenom disclosed the problems last April and opened an investigation at that time.

“While each of these officers and employees has denied wrongdoing, the special committee’s investigation has raised serious concerns, resulting in a loss of confidence by the independent members of the company’s board of directors in the personnel involved,” the firm said in a statement.

“In making the transition from researching potential molecular diagnostic tests to developing and commercializing those tests, the company failed to put in place adequate protocols and controls for the conduct of studies in the T21 program … and some employees failed to provide adequate supervision,” Hixson said during a conference call following the announcement. “This resulted in inadequately substantiated claims, inconsistencies and errors in the test data, and results for our T21 program.”

In a recent interview conducted by The Wall Street Transcript of Zarak Kurshid, a vice president for Caris and Company published on September 14, 2009, he said,

”We’re recommending selling Sequenom.”

According to a story by David Olmos for Bloomberg,

(The company’s) planned launch of a prenatal test for Down syndrome may be delayed by more than a year after a finding that research data gathered to develop the screen was mishandled.

Following the terminations and resignations the firm’s board according to its own SEC 8K filing,

… appointed Chairman Harry Hixson, a former president and chief operating officer of Amgen, and Director Ronald Lindsay to serve on an interim basis as CEO and SVP of R&D, respectively. The company’s board of directors also has designated controller Justin File to serve as principal financial and accounting officer.

There is likely more to come as the SEC is investigating the problems at the firm as well.

For more:

Marketwatch

Wall Street Journal

San Diego Union Tribune

Seeking Alpha (update 9/30)

Aeropostale CEO to Resign

2009-09-24T12:39:00.003-04:00

One of few bright spots in the retailing scene Aeropostale ARO (NYSE), the teen retailer, announced today that its longtime CEO going back to 1996, Julian Geiger, would be stepping down at the end of the fiscal year (see press release). For now, the firm will replace Geiger with Mindy Meads, the president and chief merchandising officer, and Thomas Johnson, the chief operating officer, who will serve as co-CEOs. Both executives have performed terrifically at the firm. It is unlikely, however, the two will remain as co-CEOs for very long. Co-CEOs is usually difficult arrangement under normal circumstances but it is even more problematic in a retailing situation.Keep a close eye on how this all shakes out over time. The company does not want to damage a good thing.

For more:

MarketWatch

The Street.com

Businessweek (update 10/1)

CEO Watch List - Ken Lewis, Bank of America Update #7

2009-09-23T09:44:00.001-04:00

Ken Lewis’ CEO chair at Bank of America continues to get hotter and hotter. It is getting more and more difficult to see how Lewis can manage to keep his position much longer. Joe Bel wrote a piece for MarketWatch Tuesday in which he stated,

The multiple probes bearing down on Bank of America Corp. could make it difficult for Chief Executive Ken Lewis to keep his job.

Numerous analysts and management experts are now predicting the when rather than the whether. Stay tuned.

LCA-Vision CEO Resigns for New Position

2009-09-18T12:18:00.001-04:00

Steven C. Straus, the often time embattled CEO of LCA-Vision Inc. a provider of laser vision correction services, according to the company’s press release,

… resigned his position to lead another healthcare company outside of the ophthalmology industry. Management of daily operations will be the responsibility of Chief Operating Officer David L. Thomas and Chief Financial Officer Michael Celebrezze, jointly reporting to the board of directors through non-Executive Chairman E Anthony Woods.

Straus who has been CEO for three years has at times been under pressure from activist shareholders and subject to the weak economy. His exit from the firm may turn out to be a blessing if the company can find its way forward and put in place a CEO that understands the business and its market.Stay tuned.

For more:

Business Courier of Cincinnati

MSN Money

Northrop Grumman CEO to Retire with Succession in Place

2009-09-17T10:48:00.003-04:00

Northrop Grumman NOC (NYSE) chairman and CEO Ronald Sugar will retire January 1, 2010. In his place the board selected president and chief operating officer Wesley G. Bush to run the defense contractor. Sugar, who has served as the company’s CEO since 2003, has been in charge of the firm as its value has continued to increase. Now that a new administration is in place and the U.S. economy has been under intense financial and economic pressures many defense industry firms have been working to move their operations more in line with the problems facing the United States economy. More consolidation and cost cuts can be expected over the next number of years in the defense industry. The selection of Wesley G. Bush allows for a smooth transition at the top of Northrop Grumman and the likelihood of a refocusing in the firm’s business strategy going forward.

For more:

Businessweek

Washington Post

WSJ

Bloomberg
Smartbrief (9/18)

Coldwater Creek CEO Resigns, Replaced by Chairman

2009-09-14T10:27:00.001-04:00

Coldwater Creek, Inc. CWTR (NASDAQ) the women’s retailer announced today that CEO Daniel Griesemer resigned and would be replaced immediately by chairman and co-founder Dennis Pence. He has also resigned his board position. Coldwater has been struggling, just as all other women’s retailers, during the current recession but has managed to control its inventory and stay within predictions by Wall Street. It is unclear exactly what forced the change at the top of the firm. Griesemer had been appointed CEO back in 2007. Investors should keep a close eye on the firm to get a better picture behind the change and what might be planned for the firm going forward.

For more:

Reuters

Corporate Press Release

Morgan's CEO Mack to be Replaced by Gorman in January

2009-09-10T19:36:00.002-04:00

Late today it was announced that the often embattled Morgan Stanley MS (NYSE) CEO John Mack would be replaced in January by the firm’s c0-president James Gorman. Often considered Mack’s possible replacement, Gorman will soon be in the captain’s seat. Mack will continue as chairman. According to a Reuters story by Dan Wichins and Christian Plumb,

Morgan Stanley (MS.N) Chief Executive John Mack is stepping down and will be replaced by retail brokerage head James Gorman, signaling the storied bank is embracing stable businesses after losing big on risky ones.

… “Gorman has really earned his stripes,” said Anton Schutz, president of Mendon Capital Advisors in Rochester, New York, which owns Morgan Stanley shares. “He did a great job at Merrill, he’s doing a good job at Morgan Stanley, and the timing for a change seems to be good, because we’ve made it through the worst of the crisis.”

Many of the street’s analysts are convinced the change at Morgan is related to the issues of risk the bank experienced during the financial crisis and the change at the top is intended to ameliorate that risk going forward. It may be far too early to make that kind of the prediction, we will have to wait and see.

For more:

Insight Enterprise, Inc. Pushed CEO Out

2009-09-10T13:10:00.002-04:00

Insight Enterprises, Inc’s. NSIT (NASDAQ) board Monday September 8 ousted its CEO, Richard Fennesy. Fennesy had been in charge of the firm since 2004. Insight, a distributor of computer hardware and software in North America, carrying thousands of products from major manufacturers, selected a current board member Anthony Ibarguen to serve as the firm’s interim CEO until a successor is chosen. According to Insight, Ibarguen has more than 25 years of IT industry experience including serving as President, Chief Operating Officer and a director of Tech Data Corporation (TECD). Additionally, he served Executive Vice President of Sales and Marketing at Entex Information Services. He also served as President and Chief Executive Officer of Alliance Consulting Group, a privately held IT consulting and software solutions firm.According to a story by Patrick O’Grady for the Phoenix Business Journal,

co-founder and Chairman Tim Crown during a conference call said …“It was with this focus that the board determined that now is the right time to make a change in the CEO position,”

… Crown said there is no one thing that led the board to decide a change of direction is in order, but the company has been buffeted this year having to restate about $61.2 million in earnings related to accounting for certain aged transactions. The restatement involved transactions going back to 1996.

The abrupt change at Insight may augur some positive results for the firm once the dust settles and the firm focuses its business strategy. Keep a close eye on the interm CEO’s moves and the firm’s ultimate choice for a permanent CEO.

CEO Watch, Jeffrey Peek, CIT Update 1

2009-09-04T13:15:00.004-04:00

In July as CIT continued to risk bankruptcy I placed Jeffrey Peek on Liberum’s CEO Watch list. Earlier today it was announced that CIT extended Peek’s contract for another year. In a Reuters story earlier today by Juan Lagorio,

CIT Group Inc said it has extended the contract of Chief Executive Jeffrey Peek for one year, even though his decisions to expand into risky businesses helped to push the lender to the brink of bankruptcy.

… “Keeping him (Peek) on board would minimize any distractions as the company tries to complete its restructuring,” said Sameer Gokhale, an analyst at KBW.

… “Getting a new CEO at this point in time wouldn’t really accomplish anything because the company is dealing with funding, liquidity and capital challenges, and that is not something a new CEO can fix easily,” Gokhale said.

The circumstances surrounding Peek’s contract extension are somewhat similar to many companies today. Boards remain reluctant, particularly during difficult times, to change the “captain of the ship” even while the ship is sinking or floundering. Stay tuned.

For more:

Bloomberg

New CEO Selected for First Solar

2009-09-03T13:52:00.002-04:00

Robert Gillette, a former CEO of Honeywell’s Aerospace, was selected as First Solar’s FSLR (NASDAQ) new CEO. Gillette succeeds Michael Ahearn who will remain as the firm’s executive chairman. Gillette’s selection appears to be a terrific choice. Stay tuned.

For more:

Management Turnover as Change Agent

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RealNetworks CEO Leaves in Midst of Turnaround

Thinking Outside the Box is Not Always Best - Sears

Ranbaxy CFO Exits Adding To Firm's Management Changes

2010 Continues to See Major Declines in Executive Turnover

CEO Watch - William C. Weldon, Johnson and Johnson, Update #2

Against the Grain - Pfizer CEO Resigns Unexpectedly

InfoSpace Fails to Meet Wall Street Expectations - CEO Leaves

Quarterly Executive Turnover Continues to Decline While Overall Unemployment Remains High

HP Selection of New CEO Slammed by Analysts and Market

Recommended Reading - Open letter to Stephen Elop, Nokia’s new CEO: How to make Nokia great again, RCR Wireless

CEO Watch - William C. Weldon, Johnson and Johnson, Update #1

CEO Watch - Nokia CEO Olli-Pekka Kallasvuo, Update #1

CEO Watch List - Bill Weldon, Johnson and Johnson

Beckman Coulter's CEO Resigns

Recommended Reading - How to acquire a team of 'A players’, Globe and Mail

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CEO Watch List- Steve Ballmer, Microsoft

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Recommended Reading - The real outrage is how CEOs are paid, not how much, Fortune

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Recommended Reading - Leading in Turbulent Times, Pearson Books

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Recommended Reading - Paying Big Bonuses Exposes Wall Street's CEO Succession Failure

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CEO Watch - Vikram Pandit, Citigroup Update #3

Key Annual and Quarterly Management Change Numbers 2005 - 2009

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Recommended Reading - What Iceberg? Just Glide to the Next Boardroom, NY Times

Insight Enterprise, Inc. Appoints New CEO to Fill Vacancy

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Must Read - AIG's Benmosche Threatens to Jump Ship, Wall Street Journal

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Recommended Reading- Steven Rattner: Why we had to get rid of GM's CEO, Fortune

Poor Earnings - CEO change?

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