CEO Watch - Citigroup's Chuck Prince Update 2

Late this morning BloggingStocks reported an unconfirmed report that there was an emergency board meeting at CitiGroup. Speculation arose that the board would push Prince out. Is the end for Prince really near or is this just another rumor pushing the stock?

Executive Compensation

Blogging Stocks has an interesting post on the never ending controversy surrounding executive pay. Worth a read.

Children's Place is No Children's Fight

Ezra Dabah who was recently forced to resign as CEO of The Children's Place Retail Stores PLCE (NASDAQ) in a recent 13D filing has indicated he and other interested parties were considering making an offer to acquire the company. Dabah despite giving up his position as CEO remains the largest shareholder of the firm. Last week he began making attempts to clear his name (see earlier blogs). If Dabah can get a real private equity player to back him, he may get his chance to run the firm again and get his revenge.

Stay tuned.

For more see:

Investopedia
CNN Money
Streetinsider.com 13D tracker
Houston Chronicle
TheStreet.com
Reuters

CEO Watch - Prince, CitiGroup Update

Chuck Prince responded yesterday to the furor surrounding his management of Citigroup. The bank announced a major reorganization along with key management changes. The question is whether the changes are enough to quell outside calls for his his head. According to a piece by Landon Thomas, Jr. and Eric Dash in today's New York Times,

Citigroup announced that it would combine its investment banking and alternative investment units, bringing the groups together under one leader. Vikram S. Pandit, a former Morgan Stanley executive who runs Citigroup’s alternative investment division, will lead the new group, to be called the institutional client group.

For full details on the changes see Citigroup's press release.

Prince remains under pressure and stays on our CEO Watch List.

For more see:

Financial News
Crains
Newsvine
Bloomberg Update
Times Online UK
Seeking Alpha
BloggingStocks

Children's Place ex-CEO Fights Back

Former Children's Place CEO, Ezra Dabah has come out fighting a few weeks after being forced to resign as CEO (see earlier blog). According to an article by Michael Barbaro in today's New York Times,

Mr. Dabah fired off a testy letter last night to the acting chairwoman of Children’s Place, charging that his resignation was “solely attributable to a power play by certain members of the board” and upbraiding the company for making remarks “that have disparaged my good name and reputation.”

The two-page letter, by turns angry and boastful, suggests that a nasty behind-the-scenes battle played out at the company over Mr. Dabah’s conduct, resulting in a split board vote on whether he should remain in the job.

As the stock has gone into a tailspin and rumors continue about a possible sale of the company, Dabah, who remains the largest shareholder, has succeeded in muddying the waters surrounding the firm even further. Dabah insists,

... he is innocent of any wrongdoing, that the board and he "mutually agreed" that he would resign and that his resignation "was without cause."

This story has legs and will continue for some time.

For more on the story see:

Bloomberg Update 3
Crains
Reuters
NY Times Dealbook

Keep A Close Eye on Retailer - Talbots

Back in June, Talbots, Inc. TLB (NYSE) was one of 28 out of a total 211 CEO changes I recommended investors consider for re-examination. On June 29, Talbots announced its board of directors appointed Trudy F. Sullivan as the Company's President and Chief Executive Officer, effective August 6, 2007. Sullivan was appointed to replace retiring Chairman and CEO Arnold Zetcher who had been involved in running the company for twenty years. Sullivan prior to her appointment was the president of Liz Claiborne and was also previously a leader of J. Crew. She has had vast experience in retailing and merchandising with a number of companies including Filenes and Jordan Marsh.

Talbots is a leading international specialty retailer and cataloger of women’s, children’s and men’s apparel, shoes and accessories. The company operates a total of 1,364 stores, with 1,125 stores under the Talbots brand name and 239 stores under the J. Jill name which the company acquired. The company has been working hard to integrate J. Jill into its overall operations. Both brands target the age 35+ female population. Unlike many retailers who are always seeking to stay on top of the latest women's fashion trends, Talbots has followed a tradition of constancy. It may be that this concept of success for the chain has begun to wear thin under constant competition and changing tastes. Talbots like many of its direct competitors is a company in transition.

It's struggling with declining profitability and weakness in its core Talbots misses' brand, which, together with petites, accounts for $1.3 billion, or 79 percent of Talbots' overall retail sales. Comparable sales for all Talbots retail concepts grew only 1.3 percent last year.

J. Jill's comps have slid 4.4 percent since May of last year, a drop Talbots management believes is based on store merchandise that was not brand-appropriate.

In August, Talbots reported a second-quarter loss of $13.3 million, compared with a loss of $3.9 million for the same quarter in 2006.

In a short period of time, Sullivan has been working hard to put her stamp on the company. Up to now she has shown the right stuff during a very demanding time and declining profits. She has already made some top management appointments (named the president of its J. Jill group, Philip H. Kowalczyk, as it new chief operating officer), hired a global business consulting firm to work on ways according to Sullivan to make the brand "relevant, fresh and consistent". The company is already looking to find a new advertising agency.

The next big step for Sullivan will be to attract and appoint a replacement for executive vice president and chief merchandising officer Harold Bosworth who retired at the end of July. As one of the key positions in the firm, Sullivan needs to get the right appointment to demonstrate to the street and its competitors she means business and knows what is needed to get the brand back on track. Despite the tough women's retailing market, if Sullivan continues to make the right moves there may be real potential for the company's performance.

Keep an eye on Sullivan.

Liberum CFO Data - Clue to The Job

Entrepreneur magazine analyzes the increasingly difficult job faced by CFOs.

CEO Watch - Gary Forsee, Sprint Nextel Update 2 - Steps Down

Gary Forsee made it official, he stepped down late Monday afternoon. The company appointed CFO Paul Saleh as Acting CEO. Now comes the real test, what will Sprint Nextel do? In a piece by Amy Thomson of Bloomberg:

Even with new leadership, Sprint may have a tough time meeting the challenge of stitching together two networks after the $36 billion purchase of Nextel Communications Inc. in 2005. The stock has fallen 22 percent since the acquisition, customers still complain about dropped calls, and new ads haven't stemmed the loss of subscribers.

"The problems that Sprint Nextel has are bigger than Gary Forsee,'' said Chris King, a Stifel Nicolaus & Co. analyst in Baltimore who rates the shares ``hold'' and doesn't own them. "This is certainly not a story that's going to be turned around in six months or so, regardless of who's in charge.''

An earlier story in Computerworld summed up Sprint's situation succinctly:

Forsee's departure is good for the company, said Tad Neeley, a principal at Gemini Partners Inc. and a private equity investor in a mobile virtual network operator (MVNO).

"Sprint now needs to focus on developing its strategic plan and figuring out, really, what it wants to be," Neeley said. "Gary Forsee wasn't really providing that kind of leadership." Although it has valuable assets, such as a good [third-generation] mobile data network and the spectrum it's using for WiMax, Sprint hasn't made the most of the Nextel acquisition, he said.

Stay tuned.


For more:

BusinessWeek (more analysis)
Bloomberg Update
USA Today
CNN Money
GigaOm
Newsvine
MarketWatch
Yahoo
Bloomberg
BloggingStocks

CEO Watch - Gary Forsee, Sprint Nextel Update

Leslie Cauley in USA Today reported earlier today,

"Sprint, reeling from news reports that it is searching for a new CEO, plans to announce that its chairman and CEO, Gary Forsee, is stepping down, according to people familiar with the board's plans.

Sprint, which could announce Forsee's departure as early as Monday, plans to appoint an interim successor until a permanent replacement can be found, these same sources said. They declined to be identified by name or affiliation because no official announcement has been made by Sprint."

The question remains can a new management turn things around quickly enough? This specific issue was briefly covered by Monica Alleven in today's Wireless Week in Review.

Stay tuned as Sprint navigates into new and unsettling waters.

For more:

SEC Investor
WSJ Deal Journal

CEO Watch - Gary Forsee Sprint Nextel

Sprint Nextel remains mum on speculation that its Chairman and CEO, Gary Forsee may be on the chopping block. Forsee has been under the gun for sometime now as Sprint has continued to lag behind its main competitors. With Sprint's recent crap shoot on Wimax technology more and more shareholders (activists in particular) are expressing their growing concerns. The Wall Street Journal on its website Thursday afternoon:

... quoted unidentified people familiar with the situation, that Sprint Nextel's board had begun quietly talking to industry leaders for a successor and hoped to announce a selection by early December.

The real question remains, who could Sprint-Nextel come up with that could do a better job. If you have any ideas, let us know.

For more:

Information Week
Bloomberg Update1
International Herald Tribune
CNN Money
Deal Journal (suggested possibilities)