Latest news with #SveaHerbst-Bayliss
Yahoo
29-07-2025
- Business
- Yahoo
Analysis-The most precarious job in America's boardrooms: CEO
By Svea Herbst-Bayliss and Isla Binnie NEW YORK (Reuters) -U.S. companies are removing their CEOs at the fastest clip in two decades, data shows, as increased scrutiny from shareholders and boards result in reduced tolerance for sub-par returns or wayward conduct. At least 41 CEOs have exited S&P 500 companies so far this year, compared with 49 for all of 2024 – making the fastest pace on an annualized basis since 2005, according to data from nonprofit executive research group The Conference Board and data analytics company ESGAUGE. In the latest example, consumer goods company Procter & Gamble, the maker of Tide laundry detergent and Bounty paper towels, said on Monday CEO Jon Moeller will be replaced next year by longtime executive Shailesh Jejurikar. Moeller, who has been CEO since 2021, will become executive chairman, a powerful role on the board that allows the former chief to retain a strong voice in company affairs. Before that in the last three weeks alone Tylenol-maker Kenvue replaced its CEO and health care products distributor Henry Schein said its CEO will leave at year's end. In interviews, more than a dozen executive recruiters, investors, bankers, lawyers and industry advisers attributed the high turnover this year to a range of reasons, some building up from economic and social changes since the Covid-19 pandemic. While high inflation, geopolitical instability and the Trump administration's trade war has complicated the job of CEOs, diversity gains made boards more independent and demanding of the person in the top job, these people said. At the same time, in a stock market setting new records but driven mostly by large tech names, underperformance had given activist investors, who push for corporate changes from selling a division to buying back more stock, greater sway, leading to management changes. "Trying to fire the CEO has become a referendum on what's perceived to be a failed company strategy," said Peter da Silva Vint, managing partner at consulting firm Jasper Street, which works with companies facing pressure from activist investors. "And investors have become more comfortable with it as a mechanism to send a message." CEOs at companies that are lagging their peers are most at risk for demands from activists, with almost half – 42% – of S&P 500 companies that changed leaders last year foundering in the bottom 25th percentile for total shareholder returns, according to a November study led by The Conference Board. Take the case of Kenvue, where the board said it was replacing CEO Thibaut Mongon "to unlock shareholder value and reach its full potential" after the stock had lost 16.5% since its spin out from Johnson & Johnson two years ago. In contrast the S&P 500 has climbed 41% since August 2023, when Kenvue became a fully independent company. Kenvue took action after three U.S. hedge funds -- Starboard Value, Tom's Capital and Third Point – agitated for change at the company, and Starboard CEO Jeffrey Smith got a board seat in March to settle that hedge fund's proxy fight. The battle at Kenvue continues, however. The other two funds continue to agitate for more changes, including divesting assets and possibly selling the entire company, according to people familiar with the matter. With a new CEO on board investors, are confident a sale is sure to follow, the sources said. Kenvue declined to comment, Mongon could not be reached for comment and the hedge funds did not respond to requests for comment. "Activist investors are feeling more empowered, and if they have bought into a company's five-year plan then they want someone to exercise it," said Georgetown University professor Jason Schloetzer, an expert in corporate governance. "And if the guy at the top can't do it, they'll find the next one." Beyond shareholder activism and performance, changes in the makeup of boards over the past decade when there had been a new focus on adding diversity was also playing a role in the shakeup at the top, corporate governance experts said. Such boards were acting with greater independence, putting CEOs on tighter leash, these people said. "Newer members have more objectivity relative to prior generations," said Jason Baumgarten, head of global board and CEO practice at executive recruitment firm Spencer Stuart. Another factor in the high CEO turnover: less tolerance of unethical behavior, especially after the #MeToo movement. Questions over personal conduct led to the departure of at least two of the 40 CEOs at S&P 500 -- at Kroger and Kohl's. Representatives for the companies did not respond to requests for comment and the former executives could not be reached for comment. But the trend goes beyond publicly traded companies as well. Earlier this month, Andy Byron, the married CEO at privately held technology company Astronomer, left his position after a video of him embracing the firm's human resources chief Kristin Cabot, who is not his wife, at a Coldplay concert went viral. Astronomer did not respond to a request for comment and Byron could not be reached. Reputational risk and corporate culture have become central to a company's long-term value, Jasper Street's da Silva Vint said. "Today's boards are far more willing to act decisively, removing executives, not only to enforce policy, but to protect shareholder, employee and public trust," he said.
Yahoo
30-06-2025
- Business
- Yahoo
Lamb Weston settles with Jana, giving activist big voice on board
By Svea Herbst-Bayliss NEW YORK (Reuters) -Lamb Weston reached a settlement with Jana Partners which gives the activist investor a big presence on the french-fry maker's board and averts a bruising board fight. The agreement, announced on Monday, will add four of Jana's proposed director candidates to the board and two other mutually agreed-upon directors, expanding the board from 11 to 13 members. The Jana candidates are Bradley Alford, a former Nestle USA CEO who will become chairman; Timothy McLevish, a former Lamb Weston executive chairman; food industry executive and Continental Grain adviser Ruth Kimmelshue; and Jana's portfolio manager Scott Ostfeld. The two new mutually agreed on directors are Lawrence Kurzius and Paul Maass, who both have food industry experience as top executives. The truce marks one of the biggest settlements in terms of directors changing over this year and comes after Jana spent more than seven months pushing management for operational and capital improvement and possibly even a sale. Lamb Weston, based in Eagle, Idaho, with a market value of roughly $7.6 billion, supplies frozen potato products, including tater puffs and hash brown patties, to companies like McDonald's and restaurant company Yum Brands. The company's stock price has dropped more than 35% in the last 12 months and slipped modestly to trade at $53.33 early on Monday. Lamb Weston CEO Mike Smith, who moved into the top job late last year after a poor earnings announcement amid shrinking demand for its products, welcomed the settlement. "We are confident this outcome is in the best interests of the company and all of our shareholders," he said. Jana had been laying the path to a bruising board fight and faced a deadline of Monday to nominate director candidates and officially launch a fight. In a survey, commissioned by Jana, roughly half of Lamb Weston's top 50 shareholders said they wanted the entire board thrown out, giving Jana ammunition to press its points. The hedge fund, which owns roughly 7% of Lamb Weston, teamed up with Continental Grain, a privately held company that owns and operates companies in food and agribusiness, on the investment. Jana has history with Lamb Weston. A decade ago, it pushed packaged food company Conagra Brands to divest Lamb Weston, which had been a unit since it bought the french fry maker in 1988. In 2016, Lamb Weston began trading as a public company. Jana previously called on Frontier Communications to sell itself before Verizon Communications bought it. The firm also pushed for a sale of New Relic, which was taken private by TPG and Francisco Partners. And it pushed for a sale of Zendesk, which was taken private in 2022 by investment firms led by Hellman & Friedman and Permira. Sign in to access your portfolio
Yahoo
13-06-2025
- Business
- Yahoo
US trucker Forward Air attracts takeover interest from buyout firms, sources say
By Svea Herbst-Bayliss and Abigail Summerville NEW YORK (Reuters) -Private equity firms including Blackstone and Apollo Global Management have expressed interest in acquiring U.S. trucker Forward Air, people familiar with the matter said. They signed confidentiality agreements with the company, allowing them to review documents and receive other information to shape a potential bid. Platinum Equity and Clearlake Capital are also able to review material after having signed agreements, the sources said. Initial takeover bids are due to be submitted during the first week of July, added the sources, who noted there was no guarantee the quartet of buyout firms would submit offers. There is also a possibility other suitors may emerge. The sources spoke on condition of anonymity to discuss private deliberations. The company declined to comment, as did Blackstone and Apollo. Platinum and Clearlake were not immediately available for comment. Forward Air, which specializes in moving hauls which do not take up a full truckload, said earlier this week it is committed to advancing its strategic alternatives review, which was announced in January and could include a sale of the company. Shares in the Greeneville, Tennessee-based company have tumbled from $121 in late 2021 to roughly $20 now, shrinking its market valuation to roughly $610 million. But on a fully diluted basis, including net debt, analysts said the company's enterprise value is closer to $2.5 billion. Private equity investors may be interested in Forward Air because they see a path to growth for the company which is already the dominant player in a niche area of the transportation market, but fell on tough times after an unpopular acquisition in 2024. The company bought freight forwarder Omni Logistics in a deal that was not voted on by shareholders, added debt and created operational disruptions, the analysts added. Not long after the deal was finalized in early 2024, several investors began pressuring the company to review its business, which resulted in the company's January 2025 announcement. Frustrated by little visible movement on the review, activist investor Ancora Holdings, which owns 4% of the company, in May mounted a campaign to remove three long-serving directors that it blamed for signing off on the Omni deal and stalling the sales process. The withhold campaign was a success and the trio resigned this week after the company's annual meeting.
Yahoo
04-06-2025
- Business
- Yahoo
Jefferies hires Lazard's Thomas for activism defense, sources say
By Svea Herbst-Bayliss NEW YORK (Reuters) -Jefferies has hired a veteran Lazard banker as global head of the firm's activism defense practice, people familiar with the situation said on Wednesday, as more corporations face pressure from activist investors. The New York-headquartered bank is bringing on Richard Thomas, a managing director who has served as co-head of Lazard's Equity Advisory practice, the people said. Thomas will replace Chris Young, who had been the head of activism at Jefferies and is leaving the bank, said the people who were not authorized to discuss personnel matters publicly. Thomas will report to Chris Roop, who is head of mergers and acquisitions for the Americas. Bloomberg first reported the news of Thomas' move. A Jefferies representative declined to comment. Thomas and Young did not respond to requests for comment. The move comes as many banks are paying more attention to defending their clients from the overtures of investors flexing their muscle and demanding a host of changes from selling the company to switching out the chief executive officer. While protecting companies against pushy investors was once a nice-to-have add-on service, it has become a lucrative business that major investment banks and many boutiques are scrambling to offer clients. In April, JPMorgan hired two managing directors to beef up its activism defense group and other banks are said to be looking to make new hires, bankers and lawyers said. Jefferies ranked 10th in Bloomberg's tally of Global Financial Advisers last year, trailing Goldman Sachs, JPMorgan and Bank of America, which claimed the top three spots in defending companies against activists last year. At the same time, Jefferies has been on a broader hiring spree, having most recently poached four senior tech bankers from Guggenheim Partners. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-06-2025
- Business
- Yahoo
Jefferies hires Lazard's Thomas for activism defense, sources say
By Svea Herbst-Bayliss NEW YORK (Reuters) -Jefferies has hired a veteran Lazard banker as global head of the firm's activism defense practice, people familiar with the situation said on Wednesday, as more corporations face pressure from activist investors. The New York-headquartered bank is bringing on Richard Thomas, a managing director who has served as co-head of Lazard's Equity Advisory practice, the people said. Thomas will replace Chris Young, who had been the head of activism at Jefferies and is leaving the bank, said the people who were not authorized to discuss personnel matters publicly. Thomas will report to Chris Roop, who is head of mergers and acquisitions for the Americas. Bloomberg first reported the news of Thomas' move. A Jefferies representative declined to comment. Thomas and Young did not respond to requests for comment. The move comes as many banks are paying more attention to defending their clients from the overtures of investors flexing their muscle and demanding a host of changes from selling the company to switching out the chief executive officer. While protecting companies against pushy investors was once a nice-to-have add-on service, it has become a lucrative business that major investment banks and many boutiques are scrambling to offer clients. In April, JPMorgan hired two managing directors to beef up its activism defense group and other banks are said to be looking to make new hires, bankers and lawyers said. Jefferies ranked 10th in Bloomberg's tally of Global Financial Advisers last year, trailing Goldman Sachs, JPMorgan and Bank of America, which claimed the top three spots in defending companies against activists last year. At the same time, Jefferies has been on a broader hiring spree, having most recently poached four senior tech bankers from Guggenheim Partners. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
