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New York, NY, United States, 2007/05/18 - April and May (1-16) were characterized by corporate earnings announcements, proxy votes and an expected increase in executive turnover. Executive turnover typically increases during earnings season.
Executive turnover typically increases during earnings season. April and the first half of May's key turnover statistics temporarily staunched the slowing trend in C-level turnover that first appeared in the last quarter of 06' and continued throughout the first quarter of 07'. Both April and May's (1-16) key turnover totals came reasonably close to matching the totals registered in the same period a year ago.
April's overall C-level turnover declined 2% from the 06' total for April and Board of Director Changes, which was very high for the month due to proxy season, declined 8% over the same month in April 06'. CEO turnover on the other hand, increased 2% for April 07' over the same month in 06' while CFO turnover jumped 18% over the 2006 total for April. May (1-16) 07's totals showed a slight increase in some key categories and declines in others. Overall C-level turnover increased 9% over the same period in 06' whereas CEO turnover declined 20% and CFO turnover declined a mere 2%. Board of Director changes was extremely high in May 07' but that was also the case in 06' when it registered a Liberum record.
Liberum expects the overall level of management change to continue to remain high, yet show continuing signs of moderation as we move through the remainder of the spring business season, particularly at the top levels of corporate management. To illustrate the growing significance of top management change, Liberum outlined below a breakdown of the latest changes for May 1 - 16, 2007. We have also included a list of companies that experienced CEO changes during the May for which investors might wish to re-examine for investment possibilities. For detailed information behind the statistics or for comparison annual data contact Liberum Research directly.
MAY 1 - 16, 2007 MANAGEMENT CHANGE STATISTICS
C-LEVEL MANAGEMENT CHANGE STATISTICS
GRAND TOTAL - 1,826
TOP INDUSTRY SECTORS
• Drugs/Biotech - 176
• Banking - 162
• Energy - 144
TOP INDUSTRY SECTORS FOR NEW HIRES ONLY
GRAND TOTAL - 760 or 42% of grand total
• Banking - 83
• Drugs/Biotech - 79
• Business Services- 45
MAY 1 - 16, 2007 C-LEVEL TOTAL BREAKDOWNS BY STATUS
32% or 576 were internal moves
42% or 760 were new hires from outside the firm
0% or 3 left firms without clear explanation
15% or 274 were promoted within the firm
12% or 212 resigned or retired from the firm
0% or 1 was terminated
MAY 1 - 16, 2007 CEO CHANGE STATISTICS
GRAND TOTAL - 126 TOP INDUSTRY SECTORS
• Drugs/Biotech - 18
• Telecom - 16
• Energy - 12
TOP INDUSTRY OUTSIDE CEO HIRES ONLY
TOTAL - 36 OR 29% OF GRAND TOTAL
• Drugs/Biotech - 6
• Manufacturing - 4
• Metals/Mining - 4
MAY 1 - 16, 2007 CEO LEVEL BREAKDOWNS BY STATUS
30% or 38 were internal moves
29% or 36 were new hires from outside the firm
0% or 0 left firms without clear explanation
20% or 25 were promoted within the firm
21% or 27 resigned or retired from the firm
0% or 0 was terminated
MAY 1 - 16, 2007 CFO CHANGE STATISTICS
GRAND TOTAL - 118 TOP INDUSTRY SECTORS
• Drugs/Biotech - 14
• Telecom - 12
• Energy - 9
• Metals/Mining - 9
TOP INDUSTRY OUTSIDE CFO HIRES ONLY
TOTAL - 48 OR 41% OF GRAND TOTAL
• Drugs/Biotech - 7
• Metals/Mining - 6
• Telecom - 5
MAY 1 - 16, 2007 BOARD OF DIRECTOR CHANGE STATISTICS
GRAND TOTAL - 702 TOP INDUSTRY SECTORS
• Drugs/Biotech - 87
• Energy - 50
• Manufacturing - 50
TOP INDUSTRY OUTSIDE DIRECTOR HIRES ONLY
TOTAL - 253 OR 36% OF GRAND TOTAL
• Drugs/Biotech - 32
• Manufacturing - 23
• Insurance - 22
According to Liberum's Management Change Database, 362 CEO related changes have occurred during April and May (1-16) - all situations that investors might wish to re-examine for investment potential either positive or negative.
6 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING
Here are 8 from May 1-16, 2007 that caught my eye. I'm looking for situations where I think a particularly strong or particularly weak choice has been made - given the apparent current state of the company - or where there is an interesting special situation.
5/1 Zimmer Holdings ZMH (NYSE) $21.46 billion (check the Liberum blog)
5/1 Cyberonics CYBX (NYSE) $547 million (check the Liberum blog)
5/1 BP plc (ADR) BP (NYSE)
5/1 Westaff Staffing WSTF (NASDAQ) $93 million
5/3 Mobility Electronics, Inc. MOBE (NASDAQ) $89 million
5/8 Ikanos Communications IKAN (NASDAQ) $210 million
5/10 Presstek PRST (NASDAQ) $218 million (check the Liberum blog)
5/10 JetBlue JBLU (NASDAQ) $1.91 billion (check the Liberum blog)
WHY FOLLOW THIS STUFF?
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 contains information.
• Likewise the departing CEO
• Likewise departing CFOs
• New CEOs will bring new skills and 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.
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 new management change blog.