SAIC Unveils Its Leadership Plans

When it comes to spinoffs, investors often focus on the management teams. One area of interest is compensation. Is management incentivized with long term options or stock to deliver strong performance? Another key issue is location. Who ends up where? There is a belief that top execs know the business best and want to be where the real opportunity exists.

If that is the case, then it is pretty clear where SAIC’s (SAI) current management thinks the growth opportunities lie post-spinoff. The company recently revealed the expected management teams for both itself and its spinco this week and SAIC’s current Chairman and CEO (John Jumper), COO (Stu Shea) and CFO (Mark Sopp) will all remain with the parent company. After the spin, the business will focus on providing solutions to the national security, engineering and health industries all of which have been growing.

Tony Moraco, currently president of the company’s national security unit, will become CEO of the spinco which will be focused on servicing the government. The rest of his management team will include:

  • Sandy Sanderson – Non-executive Chairman of the Board
  • Tom Baybrook, Chief of Administration and Operations
  • John Hartley, CFO
  • Deborah Lee James, Sector President – Technical Services
  • Nazzic Turner, Sector President – Enterprise IT

Not much of a surprise here and it looks similar to what L-3 (LLL) did with its Engility (EGL) spinoff. As we previously noted, the parent is cutting off its low growth, headwinds facing businesses into the spinco so all of the top brass naturally want to stick around the parent. Don’t give up on looking at the spinco because of this though…just check in on EGL’s performance to see why.

Disclosure: Author holds no position in any stock mentioned.