Babcock & Wilcox CEO Leslie Kass leaves abruptly

  • Push-out Score suggests push-out forces
  • After less than one year in the position
  • Praise, thanks and good wishes for Kass
  • Kenny Young taking over

(exechange) — Barberton, Ohio, November 19, 2018 — Leslie Kass, chief executive of Babcock & Wilcox, leaves. It is an abrupt change. As announced by Babcock & Wilcox Enterprises Inc. in a news release on Monday, November 19, 2018, Leslie C. Kass leaves her post as Chief Executive Officer at the power generation company after less than one year in the role, effective immediately.

No company wants a CEO to flame out in the first year.

Among the 3,000 largest publicly held companies incorporated in the U.S. based on market capitalization, the average tenure of the CEOs who departed over the past 12 months was 9.2 years, according to data compiled by exechange. Only 5 percent of the CEOs who departed over the past 12 months left the position within their first year. Around 11 percent left the position within two years, and 20 percent left the position within three years.

Leslie Kass’s duties will be taken over by Kenneth M. (Kenny) Young, most recently President of B.Riley Financial, Inc.

The fact that Leslie Kass’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.

In general, an outsider does not have the constraints of an insider when it comes to leading painful changes or making unpopular decisions.

Leslie Kass’s move is part of a management shake-up also involving the positions of Executive Vice President of Finance; and Chief Strategy Officer.

“To pursue other opportunities”

The management change is explained as follows. Babcock & Wilcox said: “Leslie Kass, who has served as Chief Executive Officer since February 2018, is leaving B&W to pursue other opportunities.”

The phrase “to pursue other opportunities” opens the door to speculation.

Precise information about Leslie Kass’s future plans was not immediately available.

Wake-up call

Generally speaking, it is often a wake-up call for shareholders when a CEO leaves the position abruptly and without a reasonable explanation.

Share price decline

The change follows a decline in Babcock & Wilcox Enterprises, Inc.’s share price of 88 percent since February 2018.

Chaired by Matthew E. Avril

Babcock & Wilcox Enterprises, Inc. is chaired by Matthew E. Avril.

Matthew E. Avril is a member of the strategic advisory board of Vintage Capital Management, a private-equity investment organization specializing in the defense, manufacturing and consumer sectors. Avril has served and currently serves on the Board of Directors of both publicly and privately held entities.

In the position of CEO since 2018

Leslie C. Kass was President, Chief Executive Officer & Director at Babcock & Wilcox Enterprises, Inc. since February 1, 2018.

Prior to her appointment as CEO, Kass was Senior Vice President, Industrial, and led the company’s B&W SPIG, B&W MEGTEC and B&W Universal subsidiaries.

Previous positions included serving as Vice President of Retrofits and Continuous Emissions Monitoring, Vice President, Investor Relations & Communications, and Vice President, Regulatory and Agency Relationships.

Prior to joining B&W in 2013, she was Vice President of Nuclear Regulatory Affairs for Westinghouse.

She has also served as Senior Director of Business Policy and Fuel Supply at the Nuclear Energy Institute, Manager of Engineering Programs and Components at Entergy’s Arkansas Nuclear One Station, and Senior Project Manager at Entergy’s nuclear operations headquarters.

She began her career as a materials engineer with Altran and Duke Engineering & Services.

Kass has a bachelor’s degree in materials science and engineering from the Massachusetts Institute of Technology, and a master’s in business administration from Duke University’s Fuqua School of Business.

At the time of Leslie Kass’s appointment as Chief Executive Officer at Babcock & Wilcox, Stephen G. Hanks, Lead Independent Director, had said: “We are pleased that our succession planning process has produced a strong internal candidate, and we are confident that we have chosen the right person to lead B&W. Leslie’s extensive knowledge of B&W, its markets, and its customers, combined with her experience in driving operational improvements and strategic initiatives, make her a great fit to build on Jim’s many contributions and lead the Company going forward.”

At the time of her appointment as Chief Executive Officer at Babcock & Wilcox, Kass had said: “I am excited to take on this new role and to build on the already strong foundation B&W has developed as a leading provider of custom-engineered technologies and solutions and aftermarket services to global power and industrial markets. We will continue to focus on improving B&W’s profitability, cash flow, financial flexibility, and consistency across the organization. I look forward to working closely with the Board, Jim, the leadership team and all B&W employees to execute on our strategies to create value for shareholders.”

Push-out Score suggests push-out forces

It is not completely certain what forces eventually triggered Leslie Kass’s sudden move.

The Push-out Score™ determined by exechange suggests that push-out forces may have contributed to the change.

Read the full story in the exechange report 48.2018 ($).