Job security has been in relatively scarce supply in the executive offices of Orange County’s top public companies over the course of the recession and ongoing recovery.
Nearly one in three of the top 50 companies on this week’s list of largest public companies based here have seen a change in chief executives over the past five years, according to Business Journal records.
The rate of change is even more pronounced among the top 25 companies on the list, which is based on annual revenue.
Ten of the county’s top 25 companies have changed CEOs since the onset of the Great Recession. A few have seen multiple changes.
Add to that tally a dozen or so former top public companies that were either acquired by buyers outside OC, taken private, or went bust over the past five years, resulting in CEO changes.
Among those are Apria Healthcare Group Inc., which went private; Beckman Coulter Inc., acquired by Washington D.C.-based conglomerate Danaher Corp. last year; and the now-defunct Downey Financial Corp.
Santa Ana-based Ingram Micro Inc., the perennial No. 1 on the public companies list, is the latest among the top 50 to see a change.
Alain Monie (pronounced ah-LAHN MONE-yay) recently replaced Gregory Spierkel, who had served as chief executive for the technology distributor since 2005 (see stories, pages 1, 70.)
“It’s the right time to leave,” Spierkel said in announcing the change, which saw Monie promoted from president at Ingram, which saw $36 billion in sales last year.
Spierkel’s roughly six-year tenure falls in line with national executive hiring trends, which suggest that more than a few additional executive changes could take place in OC this year.
Average Tenure
The average tenure of a public company CEO has been a little less than seven years over the past 20 years.
Turnover appears to have slowed down a bit on a national basis during the recession.
“Typically in recessionary times, executive turnover tends to decline as companies hunker down and tend to keep most top executives in place while laying off lower-level employees,” noted a recent report from New York-based Liberum Research, a senior management research firm.
Not every large OC public company got that memo, with some of the area’s largest retailers and real estate companies in particular seeing big shake-ups over the past five years.
The two largest retail chains with headquarters in Orange County—Anaheim-based Pacific Sunwear of California Inc. (No. 19 on this week’s list, page 12; related story, page 6) and Foothill Ranch-based Wet Seal Inc. (No. 23)—reworked their executive staffs amid ongoing efforts to improve sales and switch up their mixes of merchandise.
Wet Seal has seen three CEOs since 2007, including current leader Susan McGalla, who took over the top spot in early 2011.
One of the longest-tenured chief executives here is in apparel manufacturing and retail.
Robert McKnight, cofounder of Huntington Beach-based Quiksilver Inc. (No. 7), has held the CEO role at the company since 1978.
President’s Role
He also reassumed the president’s role at the company in 2008, and is credited with getting Quiksilver over some self-inflicted financial woes and an industry downturn.
Two real estate companies have seen the most number of executive changes over the past five years, among those on the top half of this year’s public company list.
Irvine-based Standard Pacific Corp.’s Scott Stowell, who took over as CEO of the largest homebuilder based in OC at the start of the year, is the fourth person to hold the job since early 2008.
Stowell took the reins from Ken Campbell, a turnaround specialist who joined Standard Pacific from New York-based hedge fund MatlinPatterson Global Advisers, the homebuilder’s dominant shareholder.
Campbell helped bring Standard Pacific back from the brink of bankruptcy. The company now counts a market value of about $900 million, not counting preferred stock.
“I have served [as CEO] for almost three years, which is about as long as a restructuring guy like me should stick around,” Campbell said when announcing Stowell’s promotion late last year.
Fellow real estate company Grubb & Ellis Co., based in Santa Ana (No. 36), also is on its fourth CEO since 2007.
Grubb & Ellis is also in its last year of being an OC-based public company. The bulk of the commercial brokerage’s assets were bought in a bankruptcy-driven deal by New York-based BGC Partners Inc. late last month.
BGC is in the process of working out details of that deal, and the expected combination of Grubb with another brokerage it owns, Newmark Knight Frank.
The status of Grubb Chief Executive Thomas D’Arcy—and other remaining Grubb executives—under BGC’s ownership has not been announced.
CoreLogic
The next CEO change for one of the public companies here could come at No. 12 Santa Ana-based CoreLogic Inc., now headed by Anand Nallathambi—if one vocal shareholder group gets its way.
CoreLogic’s second-largest shareholder, Boston-based hedge fund Highfields Capital Management LP, last year urged the company to consider selling itself, among other ideas for improving shareholder return.
CoreLogic announced last month that it plans to stay the course with its current business strategy, and Highfields officials reacted critically, calling for Nallathandi’s ouster and other board-room changes.
CoreLogic’s shares have risen some 10% since that dust-up, with the data analytics company’s market value increasing to about $1.7 billion. The company’s shares are up more than 25% for the year. Nallathandi has made no public comments in response to Highfields’ call, and has given no indication he plans to leave the company.
Download the 2012 OC’s LARGEST 100 PUBLIC COMPANIES list (pdf)
