July Executive Turnover Grows as Does Job Growth

August 12, 2014

Liberum Research’s executive turnover data for July 2014 continued to maintain a positive trend for North America’s economies. CEO, C-level and Board of Director changes monitored by Liberum saw high percentage increases from a year earlier for the same month as well as increases from the previous month of June 2014. The only category that experienced declines was CFOs. In totality, the July executive turnover numbers and overall monthly job growth and level of unemployment continue to point in a positive direction for the North American economy. Both ADP and the U.S. Labor Department’s Bureau of Labor Statistics (BLS) released their monthly employment numbers for July. While neither report was fabulous, the trend continues to remain positive. Liberum expects this will be the case through the Fall months.

ADP’s Employment Report for July 2014 stated,

Private sector employment increased in all four major regions and all nine

U.S. Census Bureau Divisions during the month of July 2014. The ADP National Employment Report(R) reported total U.S. private sector employment increased by a total of 218,000 jobs from June to July.

The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) Employment Report for July stated,

Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today.

Job gains occurred in professional and business services, manufacturing, retail trade, and construction.

Both the unemployment rate (6.2 percent) and the number of unemployed persons (9.7million) changed little in July. Over the past 12 months, the unemployment rate and the number of unemployed persons have declined by 1.1 percentage points and 1.7 million, respectively.

Liberum’s Comparison Breakdown of Key July Executive Turnover

Below is a breakdown of Liberum’s key executive category percentage changes for July 2014 compared with July a year earlier and the previous month of June 2014.

For July 2014 increases took place in three key categories. CEO changes increased 18% from a year earlier, C-level changes increased 11% and board of director changes increased 21%, whereas CFO changes declined a mere 4%.
The month to month change in executive turnover (June 2014 to July 2014) also showed a positive picture with increases in three of the four key categories of 38% for CEOs, C-level changes increased 30% and board of director changes increased 48%, while CFO changes declined 13%.

Below are the overall turnover totals for July. The information is just illustrative of how institutional investors could view executive turnover and its possible relationship with a company’s performance. Using Liberum’s database could offer a totally new perspective on investment and is a potential way to come up with unique special situation opportunities.

KEY CEO CHANGES – JULY 2014

79 COMPANIES WITH CEO CHANGES WORTH RE-EXAMINING

According to Liberum’s Management Change Database, a total of 225 CEO related changes occurred during July 2014. Here are 79 from the time period that caught my eye. By significant, 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.

DATE COMPANY TICKER EXCHANGE MARKET CAP $ MILLIONS

07-11 Accretive Health ACHI OTC 911

07-01 Actavis, Inc. ACT NYSE 38959

07-01 Alere Inc. ALR NYSE 3256

07-17 Amber Road, Inc. AMBR NYSE 384

07-18 American Apparel, Inc. APP NYSE 189

07-14 American International Group, Inc. AIG NYSE 79638

07-24 Arno Therapeutics ARNI OTC 35

07-10 Aurcana Corporati AUN CVE 52

07-08 Axion Power Intl AXPW OTC 32

07-21 Calibrus Inc CALB OTC

07-31 Canadian Imperial CM NYSE

07-01 Cannabis Sativa, CBDS OTC 94

07-16 Cannabusiness Gro CBGI OTC

07-22 Cannlabs Inc. CANL OTC

07-23 Cash America International, Inc. CSH NYSE 1305

07-07 Cca Industries, I CAW NYSE 25

07-02 Changing Tech CHGT OTC

07-07 Clean Diesel Tech CDTI NASDAQ 30

07-30 Clean Enviro Tech CETC OTC 883

07-09 CryoLife, Inc. CRY NYSE 260

07-28 Darden Restaurants, Inc. DRI NYSE 6203

07-30 Dendreon Corporation DNDN NASDAQ 329

07-02 Deq Systems Corp. DEQ CVE 19

07-02 Echo Therapeutics ECTE NASDAQ 27

07-03 Efactor Group Cor EFCT OTC 50

07-29 Eltek Ltd. ELTK NASDAQ 15

07-07 Empire Global Cor EMGL OTC 20

07-21 Ezcorp Inc EZPW NASDAQ 517

07-11 Fuelstream Inc FLST OTC 188

07-09 Gaming Partners International Corp. GPIC NASDAQ 66

07-29 Genworth Financial, Inc. GNW NYSE 8070

07-08 Headsup Entertain HDUP OTC

07-02 Horizon Lines Inc HRZL OTC 14

07-22 Integrated Drilli IRIG OTC 28

07-16 Intelgenx Technol IGX CVE 40

07-28 Jgwpt Holdings In JGW NYSE 142

07-01 Leidos Holdings, Inc. LDOS NYSE 2888

07-08 Lexicon Pharmaceu LXRX NASDAQ 855

07-31 MAXIMUS, Inc. MMS NYSE

07-30 Meadowbrook Insurance Group, Inc. MIG NYSE 309

07-24 Medbox Inc MDBX OTC 432

07-24 MGPI Ingredients, Inc. MGPI NASDAQ 146

07-10 Micronet Enertec MICT NASDAQ 25

07-24 Neogen Corporation NEOG NASDAQ 1619

07-28 Neurokine Pharm NEUKF OTC 1

07-18 Neurotrope, Inc. NTRP OTC 22

07-31 Northsight Capita NCAP OTC 48

07-28 NTELOS Holdings Corp. NTLS NASDAQ 269

07-02 Omnicare, Inc. OCR NYSE 6575

07-24 Pacific Continental Corporation PCBK NASDAQ 248

07-09 Petromaroc Corp 0LZ FRANCE

07-29 Powerdyne PWDY OTC 2

07-21 Purespectrum, Inc PSRU OTC 263

07-30 RealNetworks, Inc. RNWK NASDAQ 276

07-29 RMG Networks Holding Corporation RMGN NASDAQ 26

07-01 Santa Fe Gold Cor SFEG OTC 8

07-17 Scio Diamond Tech SCIO 20

07-24 Sierra Metals Inc. SMT TORONTO 283

07-08 Sierra Monitor Co SRMC OTC 16

07-31 Silver Predator C SPD CVE 4

07-18 Solera Natl Banco SLRK OTC 13

07-29 Sollensys Corp SOLS OTC 6

07-21 Sterling Group Ve SGGV OTC 3

07-24 Suburban Propane Partners, L.P. SPH NYSE 2716

07-03 Sun Bancorp, Inc. /NJ SNBC NASDAQ 372

07-31 Target Corporation TGT NYSE 38383

07-10 Team, Inc. TISI NYSE

07-21 Tesco Plc TSCO LONDON 222

07-31 The Bon-Ton Stores, Inc. BONT NASDAQ 201

07-21 Tractor Supply Company TSCO LSS 8986

07-21 Trans Energy Inc TENG OTC 56

07-29 Turner Valley Oil TVOG OTC 889

07-29 Vantage Health VNTH OTC 18

07-01 Vape Holdings Inc VAPE OTC 23

07-10 Vapor Hub Interna VHUB OTC 9

07-23 VirtualScopics, Inc. VSCP NASDAQ 12

07-12 Wanderport Corpor WDRP OTC 1

07-07 WebMD Health Corp. WBMD NASDAQ 1953

07-17 Zhone Technologies, Inc. ZHNE NASDAQ 121

JULY 2014 MANAGEMENT CHANGE STATISTICS

C-LEVEL MANAGEMENT CHANGE STATISTICS

GRAND TOTAL – 1570

TOP INDUSTRY SECTORS

> Drugs/Biotech – 155

> Banking – 149

> Business Services – 103

JULY 2014 CEO CHANGE STATISTICS

GRAND TOTAL – 225

TOP INDUSTRY SECTORS

> Drugs/Biotech – 24

> Business Serivces – 18

> Banking – 15

JULY 2014 CFO CHANGE STATISTICS

GRAND TOTAL – 158

TOP INDUSTRY SECTORS

> Drugs/Biotech – 22

> Banking – 15

> Business Services – 13

> Energy – 13

JULY 2014 BOARD OF DIRECTOR CHANGE STATISTICS

GRAND TOTAL – 556

TOP INDUSTRY SECTORS

> Drugs/Biotech – 62

> Banking – 53

> Energy – 32

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.

May’s Executive Turnover Totals Defy Weak Job Growth
June 22, 2012

Tepid Job Growth Fails to Stall Executive Turnover
September 13, 2012

First Quarter Executive Turnover Raises Job and Economic Growth Concerns
April 12, 2013

March Executive Turnover Defies Weakened Job Growth Numbers
April 09, 2015

Second Quarter Executive Turnover Shows Real Growth
July 19, 2011