Arkansas Sees Turnover in CEOs

Once every 18 months or so, Arkansas Business takes a look at the CEOs of the publicly traded companies headquartered in the state. Once a year seemed too frequent since the faces in the corner office tend to be stable - or they used to.

Since the last round of CEO Profiles was published in May 2008, the roster of public companies in the state has dropped by one. (Even the "investor relations" link on the Equity Media Holdings Corp. Web site is dead these days.) Six of the remaining 19 companies, including the state's three largest companies, have installed new CEOs or will shortly. Tyson Foods Inc. of Springdale has had two CEOs in the interim.

There are other changes as well. For one thing, there's a woman in the mix for the first time since the late Vida Lampkin retired as CEO of tiny HCB Bancshares Inc. 10 years ago this month. Judy McReynolds will succeed Robert A. Davidson as CEO of Arkansas Best Corp. of Fort Smith on Jan. 1.

And the one-year stock returns for many of the CEOs are breathtaking, some of them in the triple digits. That's because the date we chose to compare, Nov. 20 - the Friday before Thanksgiving - turned out to be exactly one year after the worst day on Wall Street in all of 2008. On Nov. 20, 2008, the Dow Jones Industrial Average closed at 7,552, a nadir it hadn't seen since 1998. Of course, the market would sink lower still in February and March of this year. Too bad we won't be doing a year-to-year comparison next spring.

(Stock price returns were not calculated for CEOs on the job for less than a year.)

In addition to McReynolds, the new names on the list are:

  • Michael T. Duke, who succeeded H. Lee Scott Jr. as CEO of Wal-Mart Stores Inc. of Bentonville on Feb. 1;
  • David Wood, who succeeded Claiborne Deming as CEO of Murphy Oil Corp. of El Dorado on Jan. 1;
  • Donnie Smith, who on Nov. 19 succeeded Leland Tollett, who on Jan. 5 succeeded Richard L. Bond as CEO of Tyson Foods;
  • Randy Sims, who succeeded John Allison as CEO of Home BancShares Inc. of Conway on July 17; and
  • Daniel Cushman, who replaced Robert Weaver as CEO of P.A.M. Transportation Services Inc. of Tontitown on July 13.

Turnover of more than 30 percent in less than a year is unusually high. Among the Standard & Poor's 500 companies, 10 percent changed CEOs in 2008, according to research by Spencer Stuart, the international headhunter firm that tracks such things. In the first three quarters of 2009, 37 (including Wal-Mart, Murphy and Tyson) of the 500 largest public companies had named new CEOs.

The new CEOs on our list do fit the national trend in this way: Only one of the six, P.A.M.'s Cushman, was an external hire. Of the 52 new S&P 500 CEOs hired last year, 83 percent were internal promotions. (This year's new crop of S&P 500 CEOs are somewhat more likely to be outside hires - 21 percent.)

Wal-Mart, Murphy and Tyson ranked No. 2, No. 89 and No. 92 on the 2009 Fortune 500 list, based by total revenue in fiscal 2008. They are also the only companies among the S&P 500.

The only other Arkansas company among the Fortune 500 is Dillard's Inc. of Little Rock, No. 358, while four more of Arkansas' public companies were among this year's Fortune 1000: J.B. Hunt Transport Services of Lowell, No. 583; Windstream Corp. of Little Rock, No. 656; Baldor Electric Co. of Fort Smith, No. 910; and Arkansas Best, No. 954.

Even though most of Arkansas' public companies are of the smaller variety, their CEOs tend to fit the same mold as the big boys.

  • According to Spencer Stuart's research in 2008, the median age for S&P 500 CEOs was 54. That's exactly the median age for Arkansas CEOs as well.
  • Only three S&P 500 CEOs were under 40 last year; only one in Arkansas is: USA Truck Inc.'s Cliff Beckham, 37.
  • Two-thirds of S&P 500 CEOs are between 50 and 59 years old. Eleven of 19 in our list are in their 50s.
  • The average tenure for S&P CEOs is between six and seven years. The average tenure for Arkansas CEOs - including the half-dozen who have been in the job for less than a year - is 6.5 years.
  • Only 14 of the S&P 500 companies - 2.8 percent - had female CEOs. The arrival of Judy McReynolds as one of 19 means Arkansas has twice that record.