Updated from 12:17 p.m. EDT

Bristol-Myers Squibb ( BMY) removed Peter Dolan as chief executive, a day after an independent monitor recommended he be fired, and replaced him temporarily with James Cornelius, the former chairman of Guidant.

Leaving along with Dolan is Richard Willard, senior vice president and general counsel. Sandra Leung, vice president and corporate secretary, was appointed to act as interim general counsel.

The departures follow a recommendation on Monday from Frederick Lacey, a former federal judge assigned to monitor the company's corporate conduct, that the executives be terminated.

James Robinson III, the chairman of the board, said he wanted to express "deep appreciation and respect for Peter for his unyielding commitment to our company's mission, values and purpose, and for his many impressive achievements in developing and executing a successful strategy that has put Bristol-Myers Squibb squarely on a path toward growth and leadership for the future."

Those observations are debatable, considering that under Dolan's watch more than half of Bristol-Myers' market capitalization vanished. Since May 2001, when he became CEO, the company's stock is down 56.4%. During the same period, the S&P 500 is up 2.6% and the Amex Pharmaceutical index of big drug stocks is down 12.8%.

By early afternoon, the stock was up 58 cents, or 2.5%, to $23.98 on heavier-than -average trading.

"We view the removal of Dolan as an indication that the board is listening to investors," says David Moskowitz of Friedman Billings Ramsey. JPMorgan's Chris Shibutani says Dolan's departure was a positive development and the appointment of Cornelius a logical choice.

If you liked this article you might like

Are Fund Managers Better Than Their Funds?

Are Fund Managers Better Than Their Funds?

Can Regional Brokers Keep Outperforming?

Can Regional Brokers Keep Outperforming?

Wyeth Deal's Big, but Pfizer Still Needs a Blockbuster

Wyeth Deal's Big, but Pfizer Still Needs a Blockbuster

Cosmetic Surgery Stocks Keep Stiff Upper Lip

Cosmetic Surgery Stocks Keep Stiff Upper Lip

For Abbott, Diversity Remains Paramount

For Abbott, Diversity Remains Paramount