The day after it was announced that Kim Lody had been appointed as the new CEO of Capital Senior Living, we had the opportunity for a little one on one with her. Since she has been a director for the past four years, she was obviously well versed in the company’s issues and opportunities. But when asked why shareholders should be confident in her moving forward as CEO when she was a director during the largest collapse in shareholder value ever for the company, she had a decent response: “I wasn’t the CEO, so I had limited influence.” Well, now she is, and the buck will stop with her.
The good news for shareholders is that she has a very strong background in sales and marketing, which is what the company seems to need now more than anything else. The bad news for shareholders is that it appears that the “pitches” received from interested parties last November regarding potential strategic alternatives did not produce a meaningful result, which most likely means the price was not right. There are some buyers who think the company is fairly valued today, given everything going on in the market. For sure, there are investors who take exception to that.
We also asked Ms. Lody what her top three priorities were, now that she is CEO. Her response was 1) sales, 2) marketing, and 3) talent availability/people initiatives. We could only respond, somewhat speechless, that were those not the very things management had been working on for the past two years, so what is different? Is this the same old same old? Although she didn’t say it, we believe she is talking about new blood and a different type of focus. We hope so.
With any change of leadership, investors are willing to give the team some time to turn things around, knowing that it never happens quickly. Whether one year, two years, who knows? What we do know is that time is not on their side, and shareholders would like to see some new initiatives before the first quarter is over. Perhaps Kim and Cindy Baier over at Brookdale can share some recipes for the needed secret sauce. After all, they are both in the same boat trying to plug the leaks.
