- After almost 10 years in the position
- Thanks for Longe
- Michael Kuta and David Aldous taking over temporarily
- Search for a successor
(exechange) — Broomfield, Colorado, January 17, 2023 — This news came shortly after Martin Luther King Jr. Day. Kevin Longe, chief executive of DMC, leaves his position. As announced by DMC Global Inc. in a news release and in a regulatory filing published on Tuesday, January 17, 2023, Kevin T. Longe has left his post as chief executive officer at the metalworking business, after almost 10 years in the role, effective January 15, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 8.3 years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
DMC will undertake a search for a successor.
Kevin Longe’s duties as CEO will be taken over temporarily by Michael Kuta and David Aldous, most recently chief financial officer (Kuta); and chairman (Aldous) at DMC Global Inc., as interim co-Chief Executive Officers.
“Improving returns for the Company’s stakeholders”
DMC did not give an explicit reason for Kevin Longe’s departure from the CEO post. Aldous stated: “As we enter the next phase of DMC’s evolution, we are dedicated to improving returns for the Company’s stakeholders. We will continue to ensure each of our businesses has the leadership, strategy, and resources that will enable their long-term growth. With our businesses positioned for success, we are now at an important inflection point in our development as a company.”
“Accelerating the integration of Arcadia”
Kuta added: “We are laser focused on enabling each of our businesses to achieve their growth objectives, deliver industry leading margins and improved free cash flow. Our highest priorities include accelerating the integration of Arcadia, strengthening the profitability of DynaEnergetics, achieving commercial success with NobelClad’s new products, and improving DMC’s cash flow through more effective working capital management and targeted cost reductions. I am very encouraged by the strength of DMC and its businesses, as well as our prospects for growth and improved returns for our shareholders.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.8% of cases), implementation of a planned succession (16.2%) and the statement that the time was right for a change (8.6%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.9% of cases), personal reasons (2.9%) and conduct issues (2.4%). Rather rarely stated reasons are health problems (2.1% of cases), career change (2.1%), death (0.9%), the desire for more time with family (0.6%) and disagreement (0.6%). Sometimes, more than one reason was given. In 31% of cases, no reason was given.
Precise information regarding Kevin Longe’s future plans was not immediately available.
“Stepped down”
DMC said: “Kevin Longe has stepped down as president and chief executive officer, effective immediately.”
DMC further said: “Kevin Longe has stepped down as President and Chief Executive Officer of the Company, and that Mr. Longe has resigned as a director of the Company.”
Share price decline since January 2022
The announcement follows a decline in DMC Global Inc.’s share price of 49% since January 2022.
In the position of CEO since 2013
Kevin Longe became CEO of the Company in 2013.
Longe became the Company’s President and Chief Executive Officer in March 2013.
He has served as a director since joining the Company in July 2012 as the Company’s Chief Operating Officer.
From March 2011 until agreeing to join the Company, Longe served as an executive of Sonoco, Inc., first as President of Sonoco’s Thermo Safe business from March 2011 to March 2012 and then from March 2012 to July 2012 as a Vice President and General Manager with Sonoco’s Protective Packaging Division.
From April 2010 until joining Sonoco, Longe was self-employed performing consulting and investment work.
From 2004 through April 2010, Longe served in various positions at Lydall, Inc., most recently (2007-2010) serving as president of its subsidiary, Lydall Performance Materials, Inc.
Longe holds a B.B.A, with distinction, from The University of Michigan and an M.B.A, with distinction, from the J.L. Kellogg Graduate School of Management at Northwestern University.
No statement by Kevin Longe
In the news release announcing his departure as CEO of DMC Global Inc., Kevin Longe received thanks.
The announcement of his departure as CEO does not include a statement by Kevin Longe.
Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 108 words. The longest statement was 382 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5, according to exechange data.
34% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 339 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 17, 2022, to January 16, 2023), the average Push-out Score was 5.7, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 34% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, one in three departing CEOs were forced out or fired.
Pressure in the energy sector exactly at the critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the consumer staples, communication and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, utilities and financials sectors, as measured by average Push-out Scores.
In the energy sector, which includes DMC Global Inc., the average Push-out Score over the past 12 months was 5, which is exactly at the critical threshold of 5.
Push-out Score for Kevin Longe’s move determined
The Push-out Score regarding Kevin Longe’s move is explained point by point in the exechange report.
exechange reached out to DMC and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 4.2023 ($).