2008 Corporate Resolutions: Firing Your Bad CEO's (BSC, BSX, CFC, FINL, MMC, MNI)

2007 has been a volatile year in the stock market, but there are many key technology CEO’s who just aren’t making a passing grade. 247WallSt.com has issued a brief list of some recognized CEO’s in technology whose shareholders would likely be rewarded if the CEO was axed or stepped down.  We think these CEO’s have a great shot at getting the ax in 2008.

We decided to run a GUIDELINES FOR CEOs TO GO.  Most of these CEO’s have a recent history of disappointment, and calling a CEO out can’t be just over stock prices. The CEOs have proven their need to be called on to go. Out of 24/7 Wall St.’s CEO list for 2007, six of the eight that we called on to be fired were fired or finally forced out.  Here’s the full list, with a brief sentence and a link to the full explanations for each:

• Alan Cohen of Finish Line (NASDAQ: FINL) has proven ineptitude if you have watched this last week.  We named him on the list and showed what may happen to that stock before last week’s debacle.  The founder needs to bring in new blood.  Here’s the full scoop.
• Gary Pruitt of McClatchy (NYSE: MNI) is responsible for heading up the acquisition of Knight-Ridder, and the stock has never been the same since.  The balance sheet is now more leveraged and his old glory days are long gone.  Here’s the full scoop on that one.
• James Tobin of Boston Scientific (NYSE: BSX) is a CEO in the middle of  giant quagmire.  Not all of the problems at the company are his issue alone, but they are the worst performer in their sector and this acquisition of Guidant was such a dud that the BSX-GDT combined company is now worth less than Boston Scientific was before it went after Guidant.  Here’s the rest.
• Angelo Mozilo of Countrywide (NYSE: CFC) is a different call here.  We think Angelo will survive if he wants to, but what we think will happen in 2008 is that he will announce his retirement as CEO to bring in more of a day to day operator.  We think Mozilo will remain as non-executive Chairman and here’s why.

Michael Cherkasky of Marsh McLennan (NYSE: MMC) was one of our top candidates to leave his CEO role, and the company finally decided to act ahead of 2008.  But they didn’t heed the writing on the wall and HAD NO REPLACEMENT.  Here was the full scoop on that.

So we already had on of the CEO’s TO GO make the firing squad even before 2008 started.  We do actually have a replacement candidate, although we admit it is an obvious one that may be too easy:

• James Cayne ("Jimmy") of Bear Stearns (NYSE: BSC) is probably not going to be sitting with this Chairman AND CEO role for very much longer.  We understand that he’s well liked, and frankly it’s hard to pick him out of all the other obvious financial companies that are lenders, brokers, traders, guarantors, and the like that had major CDO or mortgage related losses that hurt the company.  But he is already in his 70’s, has spent much time out of the office, recently had health issues, had a reporter ‘pot smoking’ accusation, and there are too many other reasons we think that Bear Stearns will want to replace him.  Unfortunately for him, he probably won’t be running Bear Stearns that much longer. 

We also ran a separate list of five different TECHNOLOGY CEO’S WHO NEED TO LEAVE that include CEO’s of AMD, BigBand Networks, Circuit City, Alcatel-Lucent, and Symantec.

We’ll see what happens in 2008.  Six of our eight that we called on to go in 2007 back in December 2006 were forced out in 2007.

You can subscribe to our free email distribution list to see more previews on other mergers, restructuring, turnarounds, spin-offs, IPO’s and more.  Happy new years to all, even to this lot of CEO’s that need to go.

Jon C. Ogg
January 1, 2008