Menu
Welcome to edition 43 of C-Suite Transitions, a weekly series on InsideArbitrage that tracks appointments and departures at publicly traded companies during the prior week. We highlight five appointments and departures each week by picking the largest companies from the full list of management changes.
Once again we saw a large number of sudden departures with executives leaving their companies at short notice. In some cases, multiple executives resigned simultaneously.
Sudden Departures
Workday (WDAY) Names Zane Rowe as its new Chief Financial Officer, Succeeding Barbara Larson.
We have written about Workday several times in the past and mentioned the sudden departure of Workday’s co-CEO Chano Fernandez last December, in one of our C-Suite Transition articles a few months ago:
Chano Fernandez was with Workday for 9 years in various roles after joining the company in 2014. He was President of the Europe, Middle East and Africa (EMEA) and Asia-Pacific and Japan (APJ) regions, and was also co-President of Workday before taking on the co-CEO role. Mr. Fernandez has held senior leadership positions at several companies including SAP, Infor, Blue C, and McKinsey & Company. He was at German software company SAP from October 2007 until December 2013 as Head of Innovation Sales EMEA.
Earlier this year, on March 16, 2022, private equity firm KKR (of Barbarians at the Gate fame), announced the appointment of Chano Fernandez as a Senior Advisor to KKR’s global technology team. According to the press release,
“Mr. Fernandez will advise the KKR team on its investment activities in the technology sector globally, with a focus on the enterprise application software segment in Europe and North America. In his role, Mr. Fernandez will help to identify and assess new opportunities, and provide guidance to the management teams of KKR’s portfolio companies on operations and growth strategies.”
The sudden departure of Mr. Fernandez comes as a surprise to investors and the stock was down around 2% after hours following the announcement. Workday ended regular trading on Wednesday down 1.17% in a strong market. It is possible that Chano Fernandez plans to expand on his advisory role with KKR or take on a more active role in one of its portfolio companies. Aneel Bhusri has been an advisory partner at the VC firm Greylock Partners for nearly 24 years.
Workday’s co-founder and CEO Aneel Bhusri, who also serves as the Chairman of the company’s Board of Directors will step down from his position after January 2024. Bhusri has consistently been the driving force behind Workday as one of its co-Founders, despite frequently serving with different co-CEOs.
Workday announced that Carl Eschenbach had been appointed as the new co-CEO to succeed Chano Fernandez.
Zane Rowe Chief Financial Officer
On May 19, 2023, the Board of Directors of Workday appointed Zane Rowe as Chief Financial Officer, effective June 12, 2023.
Mr. Rowe is the latest top executive to depart VMWare (VMW) while Broadcom (AVGO) attempts to close its $61 billion acquisition of the company.
For seven years, Mr. Rowe served as CFO at VMware, managing the business’s financial and accounting operations. After Pat Gelsinger resigned to become CEO of Intel, Mr. Rowe also served as interim CEO from February to May 2021. Mr. Rowe headed North American sales at Apple and held the positions of CFO at EMC, and CFO at United Airlines before joining VMware.
Mr. Rowe said. “I have known Aneel Bhusri, Workday’s CEO, Carl, and many members of the Workday team for a long time, and look forward to working with them to continue to drive the company forward.”
“Zane’s experience with scaling high-growth organizations, coupled with his deep financial expertise, make him the perfect leader to support Workday’s continued momentum as more and more organizations turn to us to help them navigate the changing world of work” said Carl Eschenbach, co-CEO, Workday.
Barbara Larson
According to the press release Barbara Larson, Workday’s current CFO will step down after a period of transition in order to spend more time with her family.
On May 19, 2023, the Board of Directors announced that she will step down from that role effective June 12, 2023, and continue as an Executive Vice President of Workday through November 1, 2023. She will then serve as a consultant to Workday through July 8, 2024.
Ms. Barbara was promoted to CFO in February 2022. She joined Workday in 2014 and has held various roles of leadership in the company’s finance team.
Earnings
Workday reported fiscal Q1 2024 revenue of $1.68 billion, a 17.4% increase over the first quarter of fiscal 2023. Subscription revenue was $1.53 billion, a 20.1% increase over the same period last year. The number that really caught my eye was that the 24-month subscription revenue backlog was $9.79 billion, up 22.9% year-over-year. The total subscription revenue backlog of $16.65 billion was up a healthy 31.6% year-over-year. It was not surprising to see the stock spike up following these results. Cash, cash equivalents, and marketable securities were $6.33 billion as of April 30, 2023. The company has a strong balance sheet with $3.08 billion in net cash, providing enough firepower for the company to pursue acquisitions.
Operating loss decreased from $72.8 million in the same period last year to $19.8 million. Non-GAAP operating income for the first quarter was $395.9 million (23.5% of revenues), compared to non-GAAP operating income of $288.6 million (20.1% of revenues), in the same period last year. The stock is up 33% over the last year.
It was interesting to see that they continue to significantly beat earnings estimates most quarters.
“Given these results, we are raising the low end of our fiscal 2024 subscription revenue guidance to a range of $6.550 billion to $6.575 billion, representing 18% growth over the prior fiscal year. We expect second-quarter subscription revenue to be $1.611 billion to $1.613 billion, also 18% growth. In addition, we are maintaining our fiscal 2024 non-GAAP operating margin guidance of 23%, as we drive a balance of both growth and margin expansion.” said Barbara Larson, CFO, of Workday.
Appointments
1. Lazard (LAZ): $28.69
On May 26, 2023, Lazard appointed Peter R. Orszag currently Chief Executive Officer of the Financial Advisory business of the company and Lazard Group LLC to succeed Kenneth M. Jacobs as Chief Executive Officer effective October 1, 2023.
| MarketCap: $2.51B | Avg. Daily Volume (30 days): 702,775 | Revenue (TTM): $2.64B |
| Net Income Margin (TTM): 8.39% | ROE (TTM): 23.93% | Net Debt: $1.82B |
| P/E: 12.75 | Forward P/E: 9.77 | EV/EBIDTA (TTM): N/A |
| P/S (TTM): 1.11 | P/B (TTM): 4.90 | 52 Week Range: $27.71 – $42.14 |
2. VMware (VMW): $136.29
On May 25, 2023, VMware announced the appointment of Karen E. Dykstra as Chief Financial Officer, effective June 9, 2023.
| MarketCap: $57.33B | Avg. Daily Volume (30 days): 1,196,226 | Revenue (TTM): $13.35B |
| Net Income Margin (TTM): 9.84% | ROE (TTM): N/A | Net Debt: $6.38B |
| P/E: 43.30 | Forward P/E: 17.30 | EV/EBIDTA (TTM): 23.52 |
| P/S (TTM): 4.01 | P/B (TTM): 35.12 | 52 Week Range: $103.55 – $137.56 |
3. Avery Dennison (AVY): $161.13
On May 23, 2023, the Board of Directors of Avery Dennison Corporation, a Delaware corporation elected Deon Stander as President and Chief Executive Officer, effective September 1, 2023.
| MarketCap: $13.16B | Avg. Daily Volume (30 days): 548,616 | Revenue (TTM): $8.76B |
| Net Income Margin (TTM): 7.77% | ROE (TTM): 34.22% | Net Debt: $3.2B |
| P/E: 19.62 | Forward P/E: 17.06 | EV/EBIDTA (TTM): 12.85 |
| P/S (TTM): 1.50 | P/B (TTM): 6.59 | 52 Week Range: $150.40 – $202.73 |
4. TREX Co. (TREX): $51.35
On May 23, 2023, Trex Company appoints Bryan Fairbanks as interim Chief Financial Officer effective June 9, 2023.
| MarketCap: $5.76B | Avg. Daily Volume (30 days): 1,191,016 | Revenue (TTM): $1.01B |
| Net Income Margin (TTM): 15.37% | ROE (TTM): 24.12% | Net Debt: $396.53M |
| P/E: 37.75 | Forward P/E: 39.22 | EV/EBIDTA (TTM): 22.84 |
| P/S (TTM): 6.16 | P/B (TTM): 12.78 | 52 Week Range: $38.68 – $66.77 |
5. Fox Factory (FOXF): $88.92
On May 25, 2023, Fox Factory Holding announced Dennis C. Schemm as Chief Financial Officer and Treasurer, effective June 12, 2023.
| MarketCap: $3.80B | Avg. Daily Volume (30 days): 275,576 | Revenue (TTM): $1.62B |
| Net Income Margin (TTM): 12.25% | ROE (TTM): 18.83% | Net Debt: $325.85M |
| P/E: 19.14 | Forward P/E: 18.73 | EV/EBIDTA (TTM): 14.02 |
| P/S (TTM): 2.56 | P/B (TTM): 3.56 | 52 Week Range: $69.28 – $127.54 |
1. Lazard (LAZ): $28.69
On May 26, 2023, Lazard announced Kenneth M. Jacobs steps down as Chief Executive Officer and has been appointed Executive Chairman of the Board of Directors October 1, 2023.
| MarketCap: $2.51B | Avg. Daily Volume (30 days): 702,775 | Revenue (TTM): $2.64B |
| Net Income Margin (TTM): 8.39% | ROE (TTM): 23.93% | Net Debt: $1.82B |
| P/E: 12.75 | Forward P/E: 9.77 | EV/EBIDTA (TTM): N/A |
| P/S (TTM): 1.11 | P/B (TTM): 4.90 | 52 Week Range: $27.71 – $42.14 |
2. Vmware (VMW): $136.29
On May 25, 2023, VMware (VMW) announced that Current VMware Chief Financial Officer and EVP Zane Rowe will be leaving the company, effective June 9, 2023.
| MarketCap: $57.33B | Avg. Daily Volume (30 days): 1,196,226 | Revenue (TTM): $13.35B |
| Net Income Margin (TTM): 9.84% | ROE (TTM): N/A | Net Debt: $6.38B |
| P/E: 43.30 | Forward P/E: 17.30 | EV/EBIDTA (TTM): 23.52 |
| P/S (TTM): 4.01 | P/B (TTM): 35.12 | 52 Week Range: $103.55 – $137.56 |
3. Macy`s (M): $13.59
On May 25, 2023, Macy’s announced that Elisa D. Garcia Chief Legal Officer and Secretary has informed the company that she intends to retire on October 6, 2023, after seven years of service.
| MarketCap: $3.84B | Avg. Daily Volume (30 days): 12,648,734 | Revenue (TTM): $25.31B |
| Net Income Margin (TTM): 4.65% | ROE (TTM): 30.56% | Net Debt: $5.42B |
| P/E: 3.37 | Forward P/E: 3.89 | EV/EBIDTA (TTM): 4.03 |
| P/S (TTM): 0.16 | P/B (TTM): 0.99 | 52 Week Range: $13.97 – $24.90 |
4. TREX Co. (TREX): $51.35
On May 23, 2023, Dennis Schemm informed Trex Company of his intention to resign from the position of Chief Financial Officer effective June 9, 2023.
| MarketCap: $5.76B | Avg. Daily Volume (30 days): 1,191,016 | Revenue (TTM): $1.01B |
| Net Income Margin (TTM): 15.37% | ROE (TTM): 24.12% | Net Debt: $396.53M |
| P/E: 37.75 | Forward P/E: 39.22 | EV/EBIDTA (TTM): 22.84 |
| P/S (TTM): 6.16 | P/B (TTM): 12.78 | 52 Week Range: $38.68 – $66.77 |
5. Primoris Services (PRIM): $26.80
On May 22, 2023, Primoris Services Corporation announced John F. Moreno Jr., steps down as Chief Operating Officer effective as of May 22, 2023.
| MarketCap: $1.48B | Avg. Daily Volume (30 days): 303,351 | Revenue (TTM): $4.89B |
| Net Income Margin (TTM): 2.78% | ROE (TTM): 12.97% | Net Debt: $1.33B |
| P/E: 11.03 | Forward P/E: 9.29 | EV/EBIDTA (TTM): 8.95 |
| P/S (TTM): 0.27 | P/B (TTM): 1.18 | 52 Week Range: $15.82 – $28.19 |
If you are reading this article and have not signed up to receive such articles by email, please sign up either for our free, IA Plus or IA Premium service here. If you are an existing subscriber, you can login to the InsideArbitrage.com website to adjust the kinds of articles you receive by email by turning on or turning off specific categories of articles.
Voluntary Disclosure: I hold a long position in Workday.