Issue Date: December 15, 2008
Changes At Helm For Three Firms
IN THE FACE OF A RAPID DECLINE in the world's economic climate, three major chemical companies have announced the election of new CEOs.
Chemtura says its CEO, Robert L. Wood, has resigned, effective immediately, for what it terms personal reasons. He has been replaced by Craig A. Rogerson, the former CEO of specialty chemical maker Hercules, which was acquired by Ashland last month.
At Eastman Chemical, CEO J. Brian Ferguson announced that he will retire after the firm's annual meeting on May 7, 2009. He will be replaced by James P. Rogers, currently Eastman's president. And at Nova Chemicals, longtime CEO Jeffrey M. Lipton will retire effective May 1, 2009, to be replaced by Christopher D. Pappas, currently president and chief operating officer.
The changes at the helm are happening amid a worsening economic climate and stock price declines that for all three firms exceed the broader market's fall. Chemtura's shares were trading at about $1.35 last week, down from about $8.00 at the beginning of the year. Nova's shares have plummeted from more than $30.00 in January to about $4.50. And at around $30.00, Eastman's stock price is half what it was in January.
In a conference call with investors, Ferguson, 54, insisted that his departure is unrelated to the firm's declining fortunes, noting that he will be in charge for the next six months. "It's not like I'm leaving just because we have trouble," he said. "I'm going to be here for all the hardest part of the recession."
Regarding Nova, Dmitry Silversteyn, a chemical stock analyst with Longbow Research, says he sees the departure of the 66-year-old Lipton as a normal transition for the CEO of more than 10 years.
On the other hand, Silversteyn's view is that Wood, 53, was pushed out by a board frustrated with a low stock price and management missteps. Investors had faith in Wood prior to his firm's 2005 merger with Great Lakes Chemical, he says. "But he frittered away a lot of that goodwill in his handling of post-acquisition Chemtura."
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