Verisign Shifts Top Management

Verisign VRSN (NASDAQ), a provider of digital infrastructure for networked companies announced that Stratton D. Sclavos, who has been with the firm for twelve years, resigned as CEO, effective immediately. The Board elected William A. Roper, Jr. as President & CEO. He has served as the board's lead independent director and has been a member of the board since 2003. The board also elected Edward A. Mueller as Chairman of the Board.

As with so many other technology related companies, Verisign was caught up in the options backdating scandal. The company initiated its own investigation of its management which according to the company has been substantially completed. According to Verisign, the review did not find intentional wrongdoing by any current member of senior management, including Sclavos. The abrupt announcement was not however, a reassuring sign.

Sclavos' replacement, William A. Roper, Jr., nevertheless, appears to be a really solid choice. He had vast experience in different areas while at Science Applications International Corporation. He most recently served as executive vice president at the firm. He also served as the company's CFO and was instrumental in some of the company's acquisitions and also worked on the sale of specific parts of the firm.

Keep an eye on Verisign to determine why Sclavos left and how Roper and Mueller intend to run the company.

Related Articles:

Motley Fool (July 10, 2007)
Wall Street Journal (subscription req.)
Barron's Tech Trader Daily
CNET
Blogging Stocks
Schaeffer's Research
Verisign Gets Nasdaq Notice (May 17)
Seeking Alpha (May 30th)
InfoWorld (May 31)

More on Advance Auto Parts

As a further follow-up to Thursday's blog on Advance Auto Parts AAP (NASDAQ), the company announced on Friday an additional management change within the top ranks. Elwyn G. Murray, III, assumed additional responsibilities. He was chosen to serve as Executive Vice President, Merchandising, Supply Chain and Technology, effective immediately. Murray joined Advance in April 2005 as Executive Vice President, Administration. Prior to joining the Company, he served as Senior Vice President of Store Operations for Food Lion, based in Salisbury, North Carolina, with whom he was employed for 16 years. A the same time, Dave Mueller resigned as Executive Vice President, Merchandising and Marketing. Mr. Mueller joined Advance in March 2003 and had held his position since November 2004.

Stay tuned.

Advance Auto Searches For New CEO

The well respected CEO of Advance Auto Parts, Inc. AAP (NYSE), Michael N. Coppola who had been with the firm since 2001, resigned May 5th effectively immediately. The company installed John C. Brouillard, a board member, as the interim chairman, president and CEO of the firm. Advance Auto Parts has initiated a search both within and outside the firm for a new CEO.

Check out Jerry Marks' (Autoretailstocks.com) May 23 piece on SeekingAlpha.com

Backdating May Have Led to Black Box CEO Exit

According to an article by Corilyn Shropshire of The Pittsburgh Post-Gazette, backdating of stock options may have been a reason for Fred C. Young, the CEO of Black Box Corporation BBOX (NASDAQ), May 22 resignation. For additional details see the article.

Series of Management Changes Hit Healthcare Firm

National Medical Health Card System, Inc. NMHC (NASDAQ), which provides PBM services to plan clients through its network of licensed pharmacies, has undergone a series of management changes over the last number of months. The most recent top management changes included changes in the CEO & President, CMO, General Counsel and CIO positions. The changes were supposedly based upon the recommendations made by NMHC's Chairman, Thomas W. Erickson who was just appointed the company's interim CEO & president and replaced James Smith. The recent changes were based on Erickson's work with the company since his selection to Board back on February 27th. Erickson, who shortly before his appointment to the board in February joined New Mountain Capital, LLC, the owner of the company's Series A Preferred stock.

Erickson previously played a role as CEO, interim CEO and chairman with six other businesses in the healthcare sector over the last 13 years. In the company's press release he stated, "today's actions commence what we hope will be an on-going process of cost and service improvements for our customers and shareholders." As mentioned above the other appointments were rather significant as well. Marty Magill the company's SVP for Sales became the Chief Marketing Officer for the company. George McGinn joined the firm to become the new General Counsel and Patrick Moroney became the interim Chief Information Officer.

It appears activist shareholders behind the scenes are playing a significant role in the company and are seeking to generate more value from the firm. Keep a watchful eye on how the changes implemented by the new team play out over the next few months.

Booz Allen Study Confirms Growing Power of Boards

May 22, Booz Allen Hamilton announced the results of its CEO turnover study. According to the study:

Global CEO departures have leveled off at a high plateau, and less than half of CEOs leaving office in 2006 departed under normal circumstances, according to the sixth annual survey of CEO turnover at the world’s 2,500 largest publicly traded corporations released today by management consulting firm Booz Allen Hamilton. The study found that corporate boards are quicker than ever to replace underperforming CEOs, as they focus more on grooming in-house leaders and turn to outsider and interim CEOs less often as outsider results continue to disappoint.

Booz Allen's conclusions are similar to those Liberum Research has been providing to our email subscribers for the last year and a half. For details on the Booz Allen study go to the firm's site.


For more on the study:

New York Times
International Herald Tribune
Press Release

Pfizer Recent Management Changes - Will it Help?

Pfizer PFE (NYSE), the pharmaceutical behemoth, announced over the weekend major leadership changes in two critical function areas, research and development and finance. Long-time head of research and development, John Mattina, will retire as soon as Pfizer finds a successor and CFO, Alan Levin, will retire immediately.

Pfizer continues to undergo management reorganization that first began back in July 2006, when Hank McKinnell CEO and Chairman resigned from his position after growing unease over his stewardship of the firm. McKinnell was replaced by a surprise appointee, Jeffrey Kindler the firm's in-house counsel at the time. Kindler, a non-scientist, is the first person to run the company who was not a scientist by trade. Under Kindler's short reign, there have already been a number of changes in management as well as the initiation of a plan to cut employee staff worldwide (10% cut by end of 2008). Kindler has not, however, made a significant mark on the firm. Since his stewardship and under the direction and promotion of Research and Development Chief Mattina, the company experienced a major setback with the recent cancellation of Phase III clinical trials for the firm's expected blockbuster drug torcetrapib which had been designed to increase good cholesterol. Torcetrapib was Mattina's baby. The company was forced to cancel the development of the drug after an unexpected increase in the risk of deaths and heart-related problems were directly attributed to the drug's usage during ongoing clinical trials.

Alan Levin, who had been CFO since late February 2005, appears to have resigned to allow Pfizer to find someone who will be better able to handle Wall Street.

Kindler seems to be searching for a management formula rather than relying on a overall strategic approach to get the firm back on track. His decisions have been slow in the making and generally dependent upon events rather than through an overall strategic focus. He continues to talk about the possibility of acquisitions and renewed focus on research and development and Many on Wall Street saw yesterday's changes as positive, but the real question remains, can Pfizer develop a long-term strategy to improve the company which may just be too large to operate efficiently in today's marketplace.

For more on the changes:

See Forbes
Financial Week Article
Daily Speculations
Hemscott Empowering Investors
Times UK online

Updated Information to Presstek's Selection of New CEO

Earlier today I was contacted by a representative for Presstek regarding my May 11 piece concerning the firm's selection of its new CEO, Jeff Jacobson. In the piece, I stated, "... the company found itself mired in an SEC investigation of its accounting methods. " Presstek's representative indicated I did not get the facts exactly right.

According to Presstek's representative:

The company did not have any accounting errors in the reporting of our 2006 results. In rebuilding our product line, we incurred certain costs and, in reviewing them with our auditors, were unsure of the best method of accounting to use in reporting them.

We decided to ask the SEC to review the situation and they agreed with our actions. This review process, however, caused delays in our filing the financial forms required of all public companies and also triggered a routine notification from the NASDAQ stock exchange warning us that failure to file our reports would result in Presstek being delisted from the NASDAQ stock exchange. As soon as the SEC provided its opinion, we promptly completed our filings, eliminating any risk of NASDAQ delisting. Due to these accounting issues, our auditors advised us that we needed to increase our accounting capabilities for the future, a process that our new Chief Financial Officer has well underway."

Surviving a CEO Change - Not Always Easy

In the May 17 edition of Business Week's Management IQ blog, Jena McGregor did a piece on the Harvard Business Review's lead article in the May edition entitled, "Surviving Your New CEO". McGregor states the authors speak to the individual, telling you how to make the cut after the new guy arrives. She even provides an outline of the tips provided in the piece.

Management change continues to remain a key factor to investors and employees.

Take a look at the tips.

Cirrus Logic's Youthful In-house Appointment

Cirrus Logic CRUS (NASDAQ) announced the appointment of current vice president and general manager of Cirrus' mixed signal audio product line, Jason Rhode as the company's new CEO. The position became vacate in March after David French the company's CEO since 1999 resigned. French resigned following an internal investigation of options backdating that ensnared Cirrus like so many other tech firms. The company has said it will need to restate financial results dating back to 2001, and it expects to record $22 million to $24 million in additional stock option expenses.

After French resigned, the company founder and current chairman of the board, Michael L. Hackworth, took over as acting CEO and president. In its press release today announcing the selection of Jason Rhode as the new CEO, the Chairman Michael Hackworth stated, "we interviewed numerous external candidates for this position, but in the end the board of directors felt that Cirrus Logic is fortunate to have a number of strong leaders within the company," ..."Jason... possesses the vision, energy and commitment to drive the company into a new era of growth, built around the company's solid foundation as a leading supplier of analog and mixed-signal semiconductors." My take on the appointment is somewhat different and far more skeptical. Cirrus most likely had difficulty finding a qualified candidate from outside the firm to take on the challenge of running Cirrus.

Rhode is only 37 years of age and has never had top-level executive experience. He is an expert in his field with numerous patents to his name and a PhD in electrical engineering. He will most likely need time to come up to speed in his new executive duties. Whether he will be able to lead the firm to new heights and profits remains to be seen.