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Pep Boys - Manny, Moe & Jack Message Board

  • bottomfeeder_30120 bottomfeeder_30120 Dec 22, 2005 3:07 PM Flag

    New CEO


    Barington urges Pep Boys to search for new CEO now
    Thu Dec 22, 2005 12:38 PM ET
    BOSTON, Dec 22 (Reuters) - Hedge fund Barington Capital Group on Thursday stepped up pressure on auto parts retailer Pep Boys - Manny, Moe & Jack (PBY.N: Quote, Profile, Research) to replace its chief executive officer, urging the board to start searching for a successor immediately.
    Barington, which has made a name for itself by threatening proxy battles to force changes at a handful of companies, also asked to participate in selecting a new CEO.

    In a letter addressed to William Leonard, Pep Boys' Presiding Independent Director, Barington Chairman James Mitarotonda said it makes sense to begin the process immediately, four months before CEO Lawrence Stevenson's contract expires.

    In November, New York-based Barington began pushing Philadelphia-based Pep Boys, which operates hundreds of auto parts stores and thousands of auto service bays across the country, to reduce its debt and consider strategic alternatives.

    At that time, the hedge fund, which owns over 6 percent of Pep Boys' stock, told the company it may try to win a seat on the board, propose operational changes, and buy or sell additional stock.

    Pep Boys' stock has tumbled 14.47 percent since January but received a boost after Barington's involvement in the company became public. On Thursday the shares were trading at $14.66, up 6 cents, on the New York Stock Exchange.

    In the third quarter, Pep Boys reported a net loss of $11.4 million on revenue of $545.2 million compared with net earnings of $6.7 million on revenue of $558.5 million a year earlier.

    Stevenson has been Pep Boys CEO since 2003.

    In his letter, Mitarotonda told the board it needed to act quickly.

    "The company would need to provide Mr. Stevenson with written notice of its election not to extend the term of his contract on or before February 28, 2006, in order to minimize the company's payment and benefit obligations under the agreement and prevent the agreement from being automatically renewed for successive one-year periods," he wrote.
    � Reuters 2005. All Rights Reserved.

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    • Pep Boys board of directors will NOT provide Larry with written notice that they do not wish to extend the term of his contract and they WILL sign a new three year deal. This is just a guess based on the board�s criminal and derelict actions when the board replaced Mitch. Pep Boys board of directors MAXIMIZED the company's payment and benefit obligations under Mitch�s agreement by signing a new three year deal right before they replaced him with Larry, and that move cost shareholders nearly fifteen million dollars.
      Past performance is the best indicator of future results so I think when they finally do announce Larry�s �retirement� he�ll be leaving with an additional twenty million dollars. Mr. Mitarotonda is not afraid to speak his mind and it is about time someone shined a light on the fifth floor cockroaches. I like the fact that they can no longer blame the peasants working in the stores for their lack of vision. But in the end, all Mr. Mitarotonda can do is ask, make recommendations and keep his fingers crossed because he can�t force the board to do anything!

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