The Five Dumbest Things on Wall Street This Week: July 20
5. Pennypacker's Petulance
What the heck happened to Gardner Denver's (GDI) CEO? Did Barry Pennypacker not realize all the pennies he would lose by suddenly packing up and shipping off?
Shares of the industrial compressor maker unexpectedly compressed Monday, falling 9% to $48 after Pennypacker, who had been in the top spot since January 2008, shocked investors by resigning three days before the company's second-quarter earnings release. The company, which declined to discuss Pennypacker's dubious departure, said Chief Financial Officer Michael Larsen would serve as interim CEO while its board searches for a full-time successor.In case you were wondering, Pennypacker owns over 43,000 shares of the company's stock as of this past March, so his storming off cost him more than $215,000 in addition to his $6 million a year salary. Yes indeed, Pennypacker's petulance proved quite painful to his personal pocketbook. And we're not just saying that because it's fun to say. As to what the folks on Wall Street are saying, well, they too were caught flatfooted by Pennypacker's abrupt exodus. Nevertheless, the analysts following the stock seemed fairly unified that his, well, abrupt nature probably had something to do with it. "His aggressive style appeared to create conflicts between the board and some of the executive team, and management turnover has been high under his leadership," wrote Robert W. Baird analyst Michael Halloran. In our view, it's understandable for investors to sell first and ask questions later considering the number of CEOs recently booted for inappropriate sexual relationships or some other kind of lapses in judgment. And Pennypacker should have remembered that obvious fact before impetuously bolting and bringing everybody else down with him. So whether or not his prickliness was the real reason for his leaving is irrelevant. Until proven otherwise, we say Pennypacker acted like a putz.
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