The announcement of a leadership shuffle at the arts and crafts retailer Michaels saw its shares rise by more than 32 per cent. The company has announced the appointment of Walmart executive Ashley Buchanan as a replacement for its new CEO Mark Cosby.
The company said that while Cosby will stay on through April 1 to help with the transition, Buchanan will start his role at the company as the president and designated CEO on January 6. Following this change however, Cosby will continue to remain on the company’s board. Cosby was appointed to the CEO’s post just a couple of months ago.
Michaels reported in an SEC filing that an annual base salary of $1.2 million will be given to Buchanan in addition to a signing bonus of almost $3.7 million that will be paid to him over a period of two years. Some bonuses at Walmart that he forfeited by joining Michaels will be included in his signing bonus. 500,000 options and 795,000 shares of restricted stock to be priced January 6 that vests over two years was also awarded to Buchanan by the board of Michaels. As of Thursday’s closing price of $6.02 a share, the total value of the restricted shares was at $4.8 million
Before Cosby was officially named as the CEO of the company at the end of October, he served at the position in an interim basis since February. Cosby was president of Office Depot’s North America business before he had joined Michaels.
“It has been an honor to lead Michaels and to help the company clearly define its core customer and develop a strategy centered on the Makers,” Cosby said in a press release.
Buchanan was the chief merchandising officer at Sam’s Club before he joined Walmart in 2007 and was also made the chief merchandising officer for the retailer’s US e-commerce business. That was in July and was a part of a reshuffle at the retailing giant.
“I am excited to welcome Ashley as his impressive skills and extensive experience make him uniquely suited to lead Michaels into its long and bright future,” Cosby said. “He brings innovative thinking and a wealth of merchandising and digital expertise that will help us engage our Makers and deliver unique crafting experiences.”
There have been quite a few turnovers of CEOs this year. According to business and executive coaching firm Challenger, Gray & Christmas, up till November of 2019, a total of 1,480 chief executives have left their companies which marks the highest on record for the first 11 months of a year. 2008 however is still the year with the highest number of turnovers of CEOs with 1484 CEOs leaving their companies. That year was at the height of the global financial crisis and 2019 just behind 2008 in that aspect. Records for CEO departures and turnovers have been kept by the firm since 2002.
Shares of Michaels closed at a price of $8.00. The stock is still down more than 40% year to date.
(Adapted from CNBC.com)