Green businesses struggle to retain executives

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Business Executive

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American solar and biofuel industries are struggling to find new leaders after a string of departures over the past year…

Nearly all of the top U.S.-listed solar companies have seen either the CEO or CFO leave their organizations. First Solar Inc, SunPower Corp, Canadian Solar Inc and JA Solar Holdings Co are just some of the companies that have had holes to fill in the top ranks. Observers say the high-profile departures are a sign of a lack of faith in the sector among executives. Leaders seem increasingly wary that the industry can recover from a supply glut that has battered overall share prices.

The turnovers come at a time when solar companies are experiencing a rapid decline in pricing power. Subsidy cuts in Europe have hit demand. And surging production in China has added to supplies.

Industry insiders say frequent changes are being made with very little succession planning. And that has investors becoming increasingly frustrated with the solar market as a whole.

The WilderHill Clean Energy index, which includes the shares of companies such as First Solar, Suntech Power Holdings Co Ltd and Trina Solar Ltd, has more than halved in the past year.

Thiemo Lang is a senior portfolio manager with Sustainable Asset Management. The company manages a fund that has $900 million in cleantech assets. Lang recently told Reuters, “As the fundamentals have become more difficult, the sector has certainly lost some appeal as management tasks have certainly become less rewarding.”

Solar technology became a novelty more than a decade ago. Venture capitalists and governments around the world embraced what was seen as a trendy idea that could revitalize environmental innovation. Industry executives basked in this glory for years. But throughout, solar companies experienced more turnover from their CEOs than some older industries face. In other sectors, leaders are known to spend their professional life in just one or two organizations.

Sanjeev Kumar is the CFO at solar inverter maker Enphase Energy Inc. He is leaving the company later this year. Kumar has served as CFO at five different companies, mostly cleantech, over the last 12 years.

Earlier this month, Enphase’s shares fell by a quarter immediately after Kumar’s departure was announced. Meanwhile, First Solar lost about a quarter of its value last October — after the solar panel maker ousted CEO Rob Gillette.

Biofuel companies are also suffering as incentives fall and the economy stays weak.
At biofuels and biochemicals maker Codexis Inc, which counts Royal Dutch Shell Plc as a partner, executive turnover has been epidemic.

In January, Codexis said CFO Robert Lawson had quit to join a private software company. Then, CEO Alan Shaw resigned the next month. He was replaced by John Nicols in June. And a few days after that, interim finance head Brian Dowd quit.

Codexis has lost half of its market value this year. The company is still looking for a CFO.

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