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New York, NY, United States, 2007/10/18 - The first half of October has seen a number of high-profile CEO turnovers Sprint, Hershey, UPS, Northern Trust and BAE Systems along with others investors should keep a close eye on. Should the markets take a hit, turnover can be expected to rise.
As the markets have settled down some over the last number of weeks there still remains a great deal of uncertainty on Wall Street and in the investing community. Hints continue that the credit crisis is far more problematic than first viewed and could ultimately have a more deleterious impact on the markets than have already occurred. The first half of October has seen a number of high-profile CEO turnovers ( Sprint S (NYSE), Hershey HYS (NYSE), United Parcel Service UPS (NtYSE), Northern Trust NTRS (NYSE) and BAE Systems PLC BA (LSE)) along with some others that investors should keep a close eye on. Should the markets take a major hit, turnover can be expected to jump precipitously.
13 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING
According to Liberum's Management Change Database, a total of 120 CEO related changes occurred during October 1-17, 2007. Here are 13 from the time period that caught my eye. I'm looking for situations where I think a particularly strong or weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation.
10/1 Canadian Superior SNG (AMEX) $403 million
10/1 The Hershey Company HSY (NYSE) $10.415 billion
10/1 Trident Microsystems, Inc. TRID (NASDAQ) $910 million
10/2 Bioject Medical Technologies, Inc. BJCT (NASDAQ) $20 million
10/2 International Rectifier IRF (NYSE) $2.457 billion (check out the Liberum blog)
10/3 Coldwater Creek Inc. CWTR (NASDAQ) $995 million
10/4 Onyx Pharmaceuticals ONXX (NASDAQ) $2.392 billion
10/8 Sprint Nextel corporation S (NYSE) $50.983 billion (check out the Liberum blog)
10/9 Jackson Hewitt Tax Service, Inc. JTX (NYSE)
10/12 Progress Energy, Inc. PGN (NYSE) $12.184 billion
10/15 F.N.B. Corporation FNB (NYSE) $1.002 billion
10/15 U.S. Auto Parts Network, Inc. PRTS (NASDAQ) $257 million
10/16 Pomeroy IT Solutions, Inc. PMRY (NASDAQ) $95 million
Liberum expects the overall level of management change to continue to remain high as we move through the fall and into the winter. The first half of October results has seen higher turnover than was registered in the equivalent time period in October 2006. Two out of three key category (CEO, CFO and all C-level management changes) totals for October 1-17 are higher than the numbers registered in October 1-16, 2006 while the third was static. Overall management turnover as compared with the same time frame in 2006 increased 11%, while CEO turnover declined a mere 1%, and CFO turnover increased a significant 25%.
OCTOBER 1-17, 2007 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1,320
TOP INDUSTRY SECTORS
• Drugs/Biotech - 144
• Metals/Mining - 95
• Banking - 89
TOP INDUSTRY SECTORS FOR NEW HIRES ONLY
GRAND TOTAL - 664 or 50% of grand total
• Drugs/Biotech - 84
• Metals/Mining - 54
• Business Services - 39
OCTOBER 1-17, 2007 C-LEVEL TOTAL BREAKDOWNS BY STATUS
11% or 146 were internal moves
50% or 664 were new hires from outside the firm
1% or 7 left firms without clear explanation
24% or 317 were promoted within the firm
14% or 184 resigned or retired from the firm
0% or 2 were terminated
OCTOBER 1-17, 2007 CEO CHANGE STATISTICS
GRAND TOTAL - 119 TOP INDUSTRY SECTORS
• Banking - 14
• Energy - 14
TOP INDUSTRY OUTSIDE CEO HIRES ONLY
TOTAL - 31 OR 26% OF GRAND TOTAL
• Energy - 5
• Banking - 4
• Metals/Mining - 4
OCTOBER 1-17, 2007 CEO LEVEL BREAKDOWNS BY STATUS
21% or 25 were internal moves
26% or 31 were new hires from outside the firm
1% or 1 left firms without clear explanation
28% or 33 were promoted within the firm
24% or 28 resigned or retired from the firm
1% or 1 was terminated
OCTOBER 1-17, 2007 CFO CHANGE STATISTICS
GRAND TOTAL - 120 TOP INDUSTRY SECTORS
• Drugs/Biotech - 16
• Banking- 9
• Energy - 8
TOP INDUSTRY OUTSIDE CFO HIRES ONLY
TOTAL - 45 OR 38% OF GRAND TOTAL
• Drugs/Biotech - 10
• Energy - 3
• Metals/Mining - 3
OCTOBER 1-17, 2007 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 298 TOP INDUSTRY SECTORS
• Metals/Mining - 69
• Drugs/Biotech - 24
• Manufacturing - 21
TOP INDUSTRY OUTSIDE DIRECTOR HIRES ONLY
TOTAL - 186 OR 62% OF GRAND TOTAL
• Metals/Mining - 41
• Drugs/Biotech - 16
• Software - 13
Investors need to diligently monitor key management changes. Certain management changes should be viewed as a "special situation" that can have a direct and major impact on a company's performance and share price.
New CEOs know more than the market about the company. Their decision to take the position contains information. Likewise the departing CEO. Likewise departing CFOs.
New CEOs will bring new skills and often-times a new direction. This is normally significant, and worth analyzing.
The next step is to get a reliable source of these investment leads - and that's why funds use Liberum (a division of The Wall Street Transcript).
The largest database of C-level executive change at public companies. Frequently quoted in the financial press, Liberum helps investors monitor this important, continuous stream of investment events. The data is also useful for investment bankers, private equity, executive search and consulting firms. The data can be used in numerous ways.
Daily customizable alerts, a searchable database, custom reports, xml feeds. Liberum clients get the data the way they can best exploit it. Get a short trial. And check out our management change blog.