ActivIdentity CEO Resigns, Replaced by COO

The board of directors of ActivIdentity ACTI (NASDAQ), a provider of digital identity assurance that provides authentication and user management products, announced the resignation of Chief Executive Officer and Senior Vice President of Sales Jason Hart effective November 1, 2007. Hart will continue to serve as a member of the Board of Directors. The board also announced the appointment of Thomas Jahn, the company's Chief Operating Officer, as the new Chief Executive Officer effective November 1, 2007. Jahn was also elected to serve as a member of the Board of Directors.

Hart's resignation came just after the company announced a revision in its previous guidance for the fourth quarter of fiscal 2007, which ended on September 30.

"The reduced guidance reflects ActivIdentity's dependence on large orders and the slippage of several large orders from fiscal Q4 into Q1. We are disappointed with our revised guidance for the fourth quarter; however, we do believe this to be primarily an issue of timing. We expect to receive the majority of these slipped orders during the current quarter of our fiscal year 2008," said Jason Hart, chief executive officer.

Jahn appears to be well qualified to run the company, the big question remains can he bring something new to the table to get the company to perform. Jahn has vast experience in the field and has had a varied background covering all the necessary areas that would qualify him to be ActivIdentity's new CEO. I hope the board sees something about Jahn that's not readily apparent with regard to his ability to turn things around at the firm

Stay tuned

Noble Corp. Remains Upbeat After CEO Departure

In an earlier blog in late September, I discussed the unexpected departure of Noble Corporation's NE (NYSE) CEO, Mark A Jackson. Noble so far seems to be handling Jackson's departure rather well. The company's latest earnings beat analysts' expectations.

Noble's net income increased to $318.3 million, or $1.18 per share, from $207.2 million, or 76 cents, last year. Revenue jumped 41 percent to $791.3 million, while contract-drilling costs climbed 27 percent.

The company continues to insist there was nothing extraordinary in Jackson's departure. The current interim CEO and Chairman, William Sears, remains very upbeat on the company's future. Currently, the company has retained an outside executive search firm to assist in the permanent hiring of a CEO.

For more see:

Houston Chronicle
Reuters
MarketWatch

BofA CEO Stays Above the Fray of Falling Earnings

Unlike CitiGroup, Bank of America's latest drop in earnings (32%) does not translate into job risk for the bank's CEO, Ken Lewis. In a piece by Ben White in today's Financial Times Lewis is quoted during yesterday's conference call indicating there will be changes at the bank (jobs and management responsibilities).

Ken Lewis, chief executive, said he would review every business that led to the dismal third quarter performance, which was much worse than analysts expected.

“What I can’t say is that we will stay the course and go forward as we have in the past,” he said. “The probability of changes and elimination of some businesses and infrastructure reassessment is very high.”

In a piece by David Mildenberg on Bloomberg he stated that during yesterday's conference call Lewis said

... the company plans to scale back its investment banking unit after trading mistakes led to $717 million of losses.

Keep an close eye on what Lewis and top management do to address the earning problems facing the bank. Unlike Prince, Lewis has been a master until now at managing BofA.

For more see:

Independent UK
DealBook
Reuters
SeekingAlpha
Times Online UK

CEO Watch - Citigroup's Chuck Prince Update 3

CitiGroup denies Prince departure rumors. Time will tell.

For more see:

Crain's New York Business

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.