Liberum’s executive turnover data for the month of November has continued to show growing turnover within the executive ranks similar to what we have seen for most of previous months this year.  This trend was a complete reversal of what we saw for the previous two years.  November’s increase in executive turnover took place while we saw a positive trend with regard to the number of people filing new unemployment claims and, even more significantly, the economy has actually generated more jobs.  This is not say we are out of the woods with regard to overall employment and the economy but more positive employment signs continue to show up.  In early December, the United States Department of Labor’s Bureau of Labor Statistics (BLS) announced the latest employment numbers.  The official unemployment rate dropped a modest 0.4% down to 8.6%, the lowest rate since March 2009.   There still remains 13.3 million people unemployed a seriously high number.  The modest gain in employment is further tempered by the fact that according to BLS 315,000 people had given up looking for work.  Even las t week we saw another drop in the number of people applying for unemployment.

Below Liberum has outlined in graphical format a November breakdown for CEO, CFO and overall C-level related  turnover.

C-LEVEL RELATED CHANGES FOR NOVEMBER

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After over six months of searching for a new CEO to replace former CEO Dirk Meyer, who resigned back in January and had been rumored to be forced out due to his lack of vision, AMD NASDAQ has finally chosen a new CEO.  AMD has selected Rory Read, Lenovo’s President and Chief Operating Officer to lead the firm as its new CEO.  AMD’s search for a new CEO has been painfully difficult.  The semiconductor firm, which has managed somewhat of a resurgence while under the direction of former CEO, Dirk Meyer, and its current interim CEO, Thomas Seifert still has a difficult road to true recovery and long term survival.  While AMD has been reasonably successful in the PC world as second banana to Intel, the company has very far to go with regard to processors for mobile phones and tablets the current growth generators. AMD has been through rough waters for sometime and many potential candidates have chosen not to be considered for the CEO position.  Throughout the CEO search process a number of potential candidate names have been rumored under consideration including Tim Cook, Apple’s soon to be new CEO after Steve Jobs made his dramatic resignation,  Mark Hurd, Oracle’s co-president and former HP CEO, Pat Gelsinger the Carlyle Group Chief Operating Officer and others have all supposedly turned down AMD.

Read’s selection to run AMD is a positive, the company has finally found someone to take on the challenge.  While Read has an impressive background while at Lenovo as well as significant leadership work while working at IBM for twenty three years he has a monumental task ahead of him.  AMD’s press release announcement contained a terrific spin on Read’s selection.  we will just have to wait and see.  At least company now has a new leader and get to work on addressing many of the firm’s future needs and strategic direction.

Investors need to closely monitor what Mr. Read does upon taking the reigns and going forward.

Newell Rubbermaid NWL (NYSE), the consumer products manufacturer, yesterday announced the selection of Michael Polk as its new CEO.  Polk, currently the president of global foods, home and personal care at Unilever is also a member of Newell’s board of directors.   Polk will succeed Mark Ketchum who was selected as Newell’s CEO back in 2005.  Ketchum back in January of this year announced his intention to retire.   The firm hired a search firm to find a new CEO.  Wisely, the firm selected a seasoned executive familiar with their business but with experience outside the firm.  Polk, who is fifty years old comes in as CEO as Newell has failed  to live up to expectations.  While he has a difficult task ahead of him, he has both the skills and the drive to help find ways to make the firm perform better going forward.

Earlier today, thestreet.com’s Miriam Remer wrote a piece expressing concern about expectations the new CEO will create about the firm.  Remer wrote,

Jefferies analyst Douglas Lane cautioned that Polk will have his work cut out for him in managing expectations after Newell Rubbermaid recently trimmed its full-year outlook. The guidance revision came, in part, because of soft demand in some of Newell Rubbermaid’s consumer product categories such as baby and parenting.

I am not nearly as sanguine as the Jefferies’ analyst quoted.  Polk has a real opportunity to shine in his new position.  Stay tuned.

Cisco Systems, Inc. CSCO (NASDAQ), the one-time darling of investors, finds itself in difficulty.  The company designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide.  Back in early April, the company’s well known CEO,  John Chambers, was forced to admit the company had problems.  According to a story in BizJournals, Chambers wrote a memo in early April to his employees in which he stated,

“We have disappointed our investors and we have confused our employees. Bottom line, we have lost some of the credibility that is foundational to Cisco’s success – and we must earn it back.”

Chambers went on to state,

… he will “address with surgical precision what we need to fix in our portfolio.”

The growing problems facing Cisco were made more problematic yesterday, when Microsoft announced the purchase of Skype.  While most analysts have focused on the problems Microsoft’s acquisition could mean for Google and Apple, Cisco is also at severe disadvantage from this latest acquisition and is in a weaker position than the others to respond.  While Microsoft has not shown great success in the past when it came to telecom acquisitions and the ultimate execution or integration of the acquisitions, the purchase of Skype was a brilliant move.  If Microsoft can make the acquisition work, it will be beneficial in many ways for the firm and may even make its arrangement with Nokia a real winner going forward.  Cisco on the other hand, only has more competition and a greater need for righting its ship.

Investors can expect tremendous pressure on Chambers going forward.  His reign at Cisco seems more and more tentative as we move forward.  He needs to make changes in the company and fast.  Stay tuned.

Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8 percent, the U.S. Bureau of Labor Statistics reported … Job gains occurred in professional and business services, health care, leisure and hospitality, and mining.  Employment in manufacturing continued to trend up.

Investors should keep a close eye on what happens with executive turnover during April and May.

In what many analysts consider a surprise, Bob Kimball, RealNetworks’ CEO and a real force in turning the troubled company in a new direction after little more than one year has abruptly resigned.  So far, Kimball has not really commented on his move.  According to the firm’s press release outgoing CEO Kimball stated:

I took on this role to lead a restructuring and transformation of RealNetworks into a more lean, efficient and effective business and we have completed that phase of RealNetworks’ transformation. Over the past year we have simplified our business, removed more than $70 million in annualized operating expenses and created an entirely new, award-winning product called Unifi.  We are delivering on our promise to build products people love.  All this work has set the stage for Real to embark on its next phase with a clean bill of health and a strong foundation.

After 12 amazing years at Real, it is time for me to find new challenges and opportunities.  I want to thank the Real team for their incredible work over the past 15 months – we’ve come a long way in a short time and I look forward to watching their success in the coming years.

In the meantime, until a permanent CEO is selected, RealNetworks appointed Executive Vice President Mike Lunsford to serve as interim CEO.  The move change in leadership comes at a delicate moment in the firm’s turnaround.  Kimball who had been with the firm for over a decade before becoming its CEO replaced Rob Glaser, the company’s founder.  While in his leadership role Kimball according to a story by Brier Dudley for The Seattle Times,

The move comes as Real enters an intense several years that will test its plan to operate as a smaller company more focused on phone companies and other business customers, as well as games and consumer products.

During Kimball’s tenure, the company also developed a new online media service that may compete with upcoming products from Google and Apple. But Real’s stock has bobbed below $4 for most of Kimball’s time as chief executive.

During 2010, sales fell 29 percent to $401.7 million and the company reported an operating loss of $34.5 million. Its gross margin improved to 64 percent, up from 60 percent the year before, when it lost $237.2 million.

All indications point to the firm finding a new CEO from outside the firm.  Investors should keep a close eye on the company as it continues to find its footing.

Eddie Lambert, the once famed investor, who has been struggling for the last number of years trying to turn his controllinginvestment in Sears into something positive, just announced, after a three year search, the appointment of another new CEO.  Lambert’s selection of Lou D’Ambrosio, a former IBM executive and CEO of Avaya, is another suspect out-of-the-box selection that has many people scratching their heads.  D’Ambrosio an effective high-powered executive with substantial CEO and management experience primarily in the telecom and tech fields has no experience in retail.  A lack of retail experience would seem to be imperative for an organization like Sears.  While D’Ambrosio has been working with Lambert and Sears as a consultant he is now going to be in charge.  What can Lambert be thinking?

According to an article by Jeannine Poggi for TheStreet.com,

In a letter to investors, Lampert said D’Ambrosio is the right man for the job due to his “information and technology background, leadership style and experience in leading and transforming a Fortune 500 company.”

D’Ambrosio led Avaya as it went private, “delivering attractive returns to its shareholders,” Lampert wrote. This could be interpreted that Lampert’s real goal for Sears is to take the company private, not to bring it back to retail dominance.

Ranbaxy Laboratories RANBAXY.BO, the Indian based but Japanese majority owned generics pharmaceutical firm, just the other day lost its long time employee and current CFO, Omesh Sethi.  Sethi announced his resignation from the firm without any explanation.  The resignation comes approximately six months after the firm lost its CEO, Atul Sobti, back in August. Ranbaxy, one of the largest generic drug manufacturers and the largest by sales in India, has been beset with a number of problems.  The company come under increased scrutiny and ultimately an import ban on a number of its generic drugs by the United States FDA back in 2008 after it was discovered there were a number of manufacturing defects at its plants.  According to an article in Bloomberg,

The Food and Drug Administration in the U.S., the world’s largest drug market, in 2008 blocked the import of more than 30 generic medicines from two Ranbaxy factories in India because of manufacturing defects. There is no evidence the drugs are harmful though the violations may lead to defective products, the FDA said at the time.

The firm also lost its original CEO not long before Atul Sobti was hired.  According to The Economic Times of India,

The departure of the CFO follows exit of other top senior executives which began with promoter and CEO Malvinder Singh’s abrupt resignation in May 2009. A year later, his replacement Atul Sobti also stepped down citing differences with the Japanese firm in running the company.

The departure of the CFO follows exit of other top senior executives which began with promoter and CEO Malvinder Singh’s abrupt resignation in May 2009. A year later, his replacement Atul Sobti also stepped down citing differences with the Japanese firm in running the company.

The problems at the firm were complicated by the fact that control of the firm was moved to Japan after Daiichi Sankyo, one of the largest pharmaceutical company’s in Japan, took a 64% controlling interest in the firm.  The continuing management turmoil at the firm appears to relate to Daiichi Sankyo’s approach for the firm.  There was little dispute back in August when the firm’s CEO, Atul Sobti resigned.  He had major differences with Daiichi’s approach to management and strategy.  Investors need to keep a close eye on the firm.  Ranbaxy has been making great strides to resolve the manufacturing problems that resulted in the U.S. import ban.  So far, the firm still does not have a CEO permanently in place.