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Corporate management turnover in 2007 was slightly below the record levels registered for 2006 but remained very high. 2007 CEO, CFO and C-level turnover totals registered an overall decline of 5%, 2% and 2% respectively from that of 2006. The actual CEO and CFO changes for 2007 overall, however, were far more "significant" and in many cases were far more high-profile for the companies involved than were those registered in 2006.
Liberum attributes the continued high level of management turnover to a number of key factors:
increasing competition both domestic and international;
growing complexities of business and work;
increasing government regulations e.g., Sarbanes Oxley and other laws;
increasing shareholder activism;
the sub-prime credit crisis;
increasing independence of many corporate boards.
Outlined below are the key management change data points for 2007. After the yearly numbers, you will find a close-up look of the key management change numbers for December 2007 along with a list of "significant" CEO changes in December Liberum advises investors give a second look at Liberum offers the most comprehensive system for monitoring corporate turnover.
2005, 2006 & 2007 Quarter by Quarter
C-LEVEL Change Comparisons
All C-level Changes
(Directors, CEOs, CFOs down to VP Level)
2005
1st Quarter - 3,135
2nd Quarter - 3,354
3rd Quarter - 3,787
4th Quarter - 6,396
TOTAL - 16,672
2006
1st Quarter - 7,539
2nd Quarter - 8,316
3rd Quarter - 6,214
4th Quarter - 5,989
TOTAL - 28, 058
(a 68% increase over 2005)
2007
1st Quarter - 6,430
2nd Quarter - 8123
3rd Quarter - 6321
4th Quarter - 6483
TOTAL - 27,357
(2% decline from 2006)
CEO Changes
2005
1st Quarter - 518
2nd Quarter - 500
3rd Quarter - 400
4th Quarter - 481
TOTAL - 1,899
2006
1st Quarter - 755
2nd Quarter - 727
3rd Quarter - 650
4th Quarter - 611
TOTAL - 2,743
(30% increase over 2005)
2007
1st Quarter - 626
2nd Quarter - 686
3rd Quarter - 641
4th Quarter - 664
TOTAL - 2,617
(5% decline from 2006)
CFO Changes
2005
1st Quarter - 457
2nd Quarter - 426
3rd Quarter - 408
4th Quarter - 426
TOTAL - 1,717
2006
1st Quarter - 630
2nd Quarter - 654
3rd Quarter - 551
4th Quarter - 466
TOTAL - 2,301
(23% increase over 2005)
2007
1st Quarter - 489
2nd Quarter - 646
3rd Quarter - 620
4th Quarter - 574
TOTAL - 2,329
(1% increase over 2006)
To illustrate the growing significance of top management change, Liberum outlined below the key C-level management change statistics for 2007 and December 2007. For detailed information behind the statistics or for comparison data contact Liberum Research directly.
2007 C-level Management Change Statistics
Grand Total - 27,357
Top Industry Sectors
Drugs/Biotech - 2,520
Banking - 2,376
Manufacturers - 1,382
Top Industry Hires by Sectors
Grand Total - 12,545 or 44% of grand total
Drugs/Biotech - 1,383
Banking - 1,185
Energy - 769
2007 C-level Changes by Status Breakdown
17% or 4,596 were internal moves
46% or 12,545 were new hires from outside the firm
0% or 123 left firms without clear explanation
24% or 6,432 were promoted within the firm
13% or 3,626 resigned or retired from the firm
0% or 35 were terminated
2007 CEO Change Statistics
Grand Total - 2,589
Top Industry Sectors
Banking - 234
Drugs/Biotech - 226
Energy - 185
Top Industry Outside CEO Hires Only
TOTAL - 599 OR 23% OF Grand Total
Drugs/Biotech - 60
Metals/Mining - 53
Energy - 48
2006 CEO Level Breakdowns By Status
26% or 662 were internal moves
23% or 599 were new hires from outside the firm
1% or 22 left firms without clear explanation
27% or 702 were promoted within the firm
23% or 589 resigned or retired from the firm
1% or 15 were terminated
2007 CFO Change Statistics
Grand Total - 2,263
Top Industry Sectors
Drugs/Biotech - 203
Energy - 151
Metals/Mining - 129
Top Industry Outside CFO Hires Only
Total - 811 or 36% of Grand Total
Drugs/Biotech - 86
Energy - 67
Metals/Mining - 62
Key December 2007 Management Changes
27 Companies with CEO Changes Worth Re-examining
According to Liberum's Management Change Database, a total of 224 CEO related changes occurred during December 2007. Here are 27 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.
12/3 Arrowhead Research ARWR (NYSE) $156 million
12/3 Bearing Point BE (NASDAQ) $575 million
12/3 Russ Berrie & Company RUS (NYSE) $335 million
12/4 Famous Dave's of America Inc. DAVE (NYSE) $134 million
12/4 Jones Soda Co. JSDA (NASDAQ) $160 million
12/6 Cabot Corporation CBT (NYSE) $2.319 billion
12/6 Cascade Microtech, Inc. (NASDAQ) $112 million
12/6 Coca Cola Co. KO (NYSE) $147.37 billion (check out Liberum blog)
12/6 Oceanfreight Inc. OCNF (NYSE) $284 million
12/10 Morgans Hotel Group Co. MHGC (NASDAQ) $623 million
12/11 Citigroup C (NYSE) $165.5 billion (check out Liberum blog)
12/11 Double Eagle Petroleum Co. DBLE (NASDAQ) $126 million (check out Liberum blog)
12/12 Federal Signal Corporation FSS (NYSE) $164 million (check out Liberum blog)
12/14 SLM Corporation SLM (NYSE) $11.542 billion
12/17 A. Schulman, Inc. SHLM (NASDAQ) $585 million
12/17 Blue Square-Israel Ltd. BSI (NYSE ADR) $501 million
12/18 Eli Lilly & co. LLY (NYSE) $60.674 billion
12/18 Embarq Corporation EQ (NYSE) $7.364 billion
12/18 Sprint-Nextel Corporation S (NYSE) $40.329 billion (check out Liberum blog)
12/19 Avid Technology, Inc. (NASDAQ) $1.076 billion
12/20 Red Hat, Inc. RHT (NYSE) $3.643 billion
12/20 Zale Corporation ZLC (NYSE) $721 million (check out Liberum blog)
12/21 Marsh & McLennan Cos. Inc. MMC (NYSE) $13.633 billion
12/24 General Cable Corporation BGC (NYSE) $2.960 billion
12/26 Universal Stainless & Alloy Products USAP (NASDAQ) $236 million (check out Liberum blog)
12/27 Checkpoint Systems, Inc. CKP (NYSE) $989 million
12/27 RCN Corp. RCNI (NASDAQ) $588 million
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).
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richard[.]twst.com 
