RadioShack Has Opportunity For CEO Update At Meeting

RadioShack Corp.'s shareholders will gather for the consumer electronics retailer's annual meeting Thursday amid questions of who will lead the troubled company as it carries out a turnaround plan.

Shareholders will vote on just one item - the election of 10 directors to serve until next year's annual meeting - when they meet at RadioShack's headquarters in Ft. Worth, Texas. All of the nominees are current directors, with the longest tenure belonging to Thomas G. Plaskett, who has been on the board since 1986.

Shareholders and market watchers will be listening for any comment executives make on the search for a new chief executive. Chief Operating Officer Claire Babrowski was named president and interim CEO after David Edmondson resigned Feb. 20 amid questions about his academic credentials.

Investors will also be listening for any update RadioShack gives on the turnaround plan that was unveiled earlier this year and which was developed while Edmondson was still at the helm. The 18-month turnaround effort includes closing 400 to 700 stores so that the company can concentrate on improving its top-performing stores. RadioShack is also cutting costs and replacing old, slower-selling items with new, faster-moving merchandise within higher growth categories.

RadioShack said in its April 13 proxy statement that it will give a report on its business operations at the annual meeting and that there will be time for questions. It made no reference to whether it will provide an update on the search for a CEO.

Edmondson stepped down as CEO after it was revealed the the college from which he claimed to have received two degrees had no such records. At the time of the resignation, Edmondson was also facing a trial for driving while intoxicated.

The board issued a press release on Feb. 14 following a Fort Worth Star-Telegram story that raised questions about Edmondson's college credentials and the trial, saying it was aware of the matters raised in the article and that Edmondson had its support.

The following week when Edmondson resigned, the board said it knew about some, but not all, of the issues.

RadioShack has said it's conducting an internal and external search but it hasn't set a timetable to name a new CEO.

"There will definitely be some interest with regard to the CEO search," Pali Research analyst Stacey Widlitz said. "I got the impression they're down to the final group but that an announcement isn't necessarily coming up in the next week or so."

Whether shareholders will show any displeasure with the board regarding Edmondson by withholding their votes remains to be seen. RadioShack's shareholders have the option to vote in favor of all nominees, withhold votes for all of them or withhold votes for specific nominees.

RadioShack's stock tumbled in February when the company reported fourth-quarter results and again the day after Edmondson resigned. The stock continues to hover near its 52-week low of $16.57 reached on April 26. Shares were recently trading at $16.98, down 11 cents or 0.6% from Tuesday's close.

RadioShack may also update shareholders on the progress it has made in carrying Cingular Wireless products instead of Verizon Wireless items. The retailer stopped selling Verizon on Dec. 31, and the transition to Cingular products hasn't gone as well as the retailer expected.

The last update RadioShack gave on its wireless business, which also includes the sale of Sprint Nextel Corp. products, was in mid-February when it said the performance of Cingular products was disappointing.

Pali Research analyst Widlitz doesn't own shares of RadioShack, and the firm doesn't do investment banking for it.

-By Desiree J. Hanford, Dow Jones Newswires; 312-750-4135; desiree.hanford@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 17th May 2006