Founder’s quick exit bewilders PSA investors
NORCROSS, Ga. - Some two weeks after Pediatric Services of America announced that founder and CEO Joseph Sansone was retiring, the circumstances surrounding his sudden departure remain shrouded in mystery.
Company Chairman Edward Wissing, who has temporarily assumed the role of CEO, declined to comment on the departure for this story, as did Sansone.
In the wake of this silence, PSA’s stock has taken a drubbing It took an immediate hit on the news of Sansone’s retirement, falling 25% to $7.50 from $10.05. It has slipped further since, closing at $7.08 Aug. 27.
PSA is searching for a permanent replacement for Sansone.
Sansone, 60, had been president and chief executive since PSA was formed in 1989, and he is credited with growing PSA from a start-up company of 12 employees into a network of 120 branch offices in 22 states. He lead the company through a restructuring in the late 1990s, and over the past few years PSA has added more depth to its management team, including the appointment of Wissing in 2002.
While the company has refined its business model and strengthened its executive leadership, the investment community is surprised by the rocky transition.
“Usually there is a little better communication and a little more fine transition,” said Schuyler Hoss, president of Northwest Healthcare Management. “But there should not be any long-term pull back in the stock because of his departure. It is a very solid company.”
According to Hoss, PSA has done a good job of identifying its core strengths over the last few years.
“The company has a more focused business model,” he said. “PSA is bigger than Joe. The management team they have brought in the last couple of years and the depth of executive resources is now significantly greater. Three to five years ago his departure would have caused me more concern.”