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Struggling A&P Takes on New CEO

2010-07-23 11:14:13

The Great Atlantic and Pacific Tea Company GAP (NYSE), often referred to as as supermarket chain A&P, has appointed Sam Martin its new CEO and Chairman.  The company has been struggling.  Martin who just left his position as COO for Office Max replaces Ron Marshall as the CEO.  Marshall, according to the press release,

left his position just after five months at the helm.

The struggling retailer is faced with another key management change at the top while trying to right itself.  Just yesterday as part of the CEO announcement the company also announced its quarterly earnings which were far from reassuring.  The firm reported a fiscal quarterly loss of $122 million. While the selection of a CEO at the firm has been an example in how CEO selections should not be made, Martin's selection may actually be the medicine the firm needs. Martin, who some speculated wanted to become the CEO of Office Max and may have known he was going to be passed over, has the requisite qualifications to help The Great Atlantic and Pacific Tea Company right itself has both high level operational expertise and a background in the food/supermarket business.  Prior to his stint as COO at Office Max, which began back in 2007, Martin served as an executive at Wild Oats before it was acquired by Whole Foods.  Prior to his work with Wild Oats Martin served with a number of other supermarket/food chains (Shopko stores and Fred Meyer). Supermarket chains in general have been struggling during the economic recession as consumers seek out new ways to reduce their food bills and still get convenience shopping.  Martin has a real challenge ahead of him but he appears to have the right type of expertise and business acumen to make a go of it.   Keep a close eye on the company there may be some positive surprises over the next year. For more: MarketWatch Businessweek NASDAQ

CEO Watch - Nokia CEO, Olli-Pekka Kallasvuo

2010-07-16 10:55:43

Over a month ago we briefly examined the continuing problems Nokia NOK1V, the world's largest phone manufacturer, has found itself  facing with the explosive growth of the smartphone market.  Nokia unlike Apple and even Motorola, HTC, Samsung etc. has been a true laggard in this marketplace.  With this growing competition in the smartphone marketplace Nokia's share price has declined a whopping 67% in the three years since Apple introduced the iPhone (according to an article in Bloomberg).  For some time some shareholders and analysts have been calling for the CEO, Olli-Pekka Kallasvuo's head.  The CEO has recognized the problems facing Nokia and recently has made some internal management changes to address the issues.  Time is running out as shareholder and now possibly board member patience is dissolving.  It is hard to see at this point in time as the iPhone4, Google Android phones, Blackberries and other sophisticated smartphones are coming into the marketplace what Nokia can do to reverse its problems.  Nokia needs a big winner and it needs it soon. Fair or not it, looks as if Olli-Pekka Kallasvuo's time as CEO may be limited.  It may be the right time for the Finnish based firm to hire a seasoned CEO from outside the firm. For more: Business Insider

2nd Quarter Executive Turnover Remains Slow - Inkling Of A Shift Arises

2010-07-06 11:59:00

Executive turnover in the second of quarter of 2010 continues to decline as the financial crisis and the related recession still impact executives at companies large and small.  While overall worker employment has remained a serious problem, companies have done little to change top executives during the economic crisis.  This is not to say there have not been major executive changes at public companies but rather the totals have been lower than in the past.  Investors need to  keep on top of executive changes as a way to monitor their investments or investments they might be considering. Second quarter 2010 CEO and CFO overall changes both dropped 16% when compared with the second quarter totals for 2009.  Overall C-level changes (defined by Liberum as covering board of directors, CEOs, CFOs, COOs, CIOs, presidents, EVPs, SVPs down to VPs) for the second quarter of 2010 dropped a whopping 37% when compared with the second quarter of 2009.  The drop in C-level changes for the second quarter of 2010 was much smaller when compared with the first quarter total for 2010 - the drop was only 7%.  The percentage drops for CEO and CFO changes for the second quarter were also much smaller when compared to the first quarter of 2010 than the totals for the first quarter of 2009.  Below are three separate graphical representations of the quarterly change totals for CEO, CFOs and C-level executives.

CEO Watch - Steve Ballmer, Microsoft Update #1

2010-06-23 11:39:54

Microsoft MSFT (NASDAQ) and particularly Steve Ballmer, the firm's CEO, continues to find itself on the hot seat. More and more analysts and tech pundits are beginning to question the firm's direction and leadership.  Yesterday, Kara Swisher of the Wall Street Journal's All Things Digital examined some of the problems facing Microsoft and it's chief executive in her piece entitled, What to make of the Microsoft-Is-Falling-And-Can't-Get-Up Meme. Swisher is by no means in the camp seriously worried about the firm's immediate future but she suggests there is a real need for some change at the firm.  According to Swisher,

Microsoft, as all tech companies do, needs to change, and a lot faster than it has so far; the company has been trying mightily to do so in search and recently, in mobile, where it is woefully far behind; its leadership under Ballmer, who took over from co-founder Bill Gates, has been meh enough to keep its stock moribund.

But, by no means recently–even if there is a better CEO for Microsoft out there than Ballmer–have I found the company execs ignorant about the tougher issues or unwilling to consider changes needed.

In fact, in its high-flying days, Microsoft did have a tin ear to criticism. No longer, and I would call its execs appropriately concerned about fixing its issues, although their efforts do suffer from the company’s massive size and inertia in making the right moves.

Thus, they certainly might not be successful at innovating, although these are the very kinds of problems Apple CEO Steve Jobs solved when he returned to a rotten company in what, in its current glory days, seems eons ago.

And Microsoft has been getting the same questions that are beginning to be asked about Google.

… That’s why–at this point–I can see no need for panic to set in about Microsoft...

… As for today, even though we are all terminal, the sky looks like it will remain intact at Microsoft for a little bit longer.

Swisher is rather pragmatic about Microsoft's situation but pragmatism does not always reign particularly when you are talking about one of the largest and formerly most successful tech firms in history.  Keep a close eye on Ballmer and Microsoft.

Recommended Reading - CEO Succession Planning Lags Badly Research Finds, Stanford Graduate School of Business

2010-06-17 11:52:16

The gap in succession planning at corporations continues to raise serious problems for companies.  The Stanford Graduate School of Business' June issue examined research on CEO succession planning conducted by Heidrick & Struggles, the executive search firm, and Stanford's Rock Center for Corporate Governance.  According to David Larker a professor at Stanford's Graduate School of Business,

“We found that this governance lapse stems primarily from a lack of focus: boards of directors just aren’t spending the time that is required to adequately prepare for a succession scenario.”

To get a summary of the research's findings go to Stanford's GSB News.