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

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.

More Changes at Wachovia - More to Come

Now that Wachovia has it's new CEO, Robert K. Steel, in place (see earlier blog)  more top management changes have already begun.  Yesterday, long-time employee and current CFO, Thomas J. Wurtz, announced he would be stepping down as soon as his replacement was found.  Steel, who is under intense pressure to find ways to right the ship, is already hard at work putting his his own on stamp on the firm.  

One can expect continued management changes at the top as Steel looks to get his own team in charge.  According to a story by David Mildenberg of Bloomberg,

"Wurtz is part of the collateral damage at Wachovia and I expect more is coming," said Gerard Cassidy, an analyst at RBC Capital Markets.

Former chief financial officer Robert Kelly, who was Wurtz's predecessor, "could stand up to Ken Thompson but the analyst community never had that feeling with Tom Wurtz."

Paul Davis of the American Banker stated,

Wurtz was a key public defender of the company's October 2006 acquisition of Golden West Financial Corp., a transaction that largely contributed to G. Kennedy Thompson's ouster as Wachovia's chief executive officer in June.

As executive and lower level changes continue at Wachovia there is a great deal more needed to right this ship.  Stay tuned.

For more:

Reuters

Times Online

Orlando Sentinel

Tampa Bay Journal

MarketWatch

Electronic Arts in Midst of Hostile Takeover Jettisons CFO

John Riccitiello, Electronic Arts' ERTS (NASDAQ) CEO, and according to many analysts the driving force behind EA's controversial hostile takeover attempt of software gaming firm Take-Two, appears to be consolidating his control and management approach to the firm. In a surprise announcement, EA's CFO Warren Jensen, who has had the position since 2002, announced he would be resigning. Jensen's resignation comes shortly after another major change in top management took place recently (appointment of new president and COO). The company provided no specific reason for the CFO change. In the company's press release Jensen said,

“It’s time for me to write the next chapter in my career – and I wish EA the best in the dynamic period ahead.”

Jensen's exit comes at a strange point in the company's circumstances, the hostile takeover bid for Take-Two. While only speculation on my part, Riccitiello who finds himself under increasing pressure as corporate profits continue to remain weak and his takeover bid of Take-Two which has turned hostile has up to this point failed to succeed. He has felt the need to revamp top management to meet his own specific requirements and make certain his underlings remain beholden to him. According to Mark Bruno in Financial Week analyst Doug Creutz of Cowen & Co. said,

it’s likely Mr. Riccitiello—who returned to EA early last year after co-founding venture capital firm Elevation Partners—is simply looking to place his own people on the video game company’s management team. “[Mr. Riccitiello]’s been back for a year now and he may be looking for someone with a different point of view,” said Mr. Creutz. “Jenson was a well-regarded CFO, but Riccitiello may be after someone with more of an innovator’s mind-set.”

It is difficult to figure how this specific management change at this juncture in the company's business makes sense. We will just have to wait and see what transpires with the hostile bid and the company's plans for the future. As it stands for the moment Jensen will remain with the firm for a number of months, so we can assume he still could be helpful with the takeover bid. According to a story in the Financial Times,

...Riccitiello has made several management changes since he succeeded Larry Probst as chief executive a year ago. He has reorganised the company into four different “labels” with separate heads and this month appointed a chief operating officer, John Pleasants, to lead the company’s global publishing operations.

We will just have to wait and see.

Stay tuned.

For more:

Spong
Paidcontent.org
Reuters
Financial Times
Venturebeat
Business Journal
The Escapist
Ars Technica