Gap Inc. (NYSE:GPS) moved over 3% higher in today's trading session on news that the company's CEO may be replaced and renewed talks of a possible leveraged buyout of the company. The Gap's recent financial woes have caused unrest amongst shareholders and kept the stock relatively cheap throughout 2006. The company reduced its FY2006
profit forecast in November, citing momentum at Old Navy as the catalyst behind the Gap's slower-than-expected turnaround. It was around this time that the company's credit rating was moved to below investment grade after its fifth straight quarter of lackluster performance. Meanwhile, Pressler - the company's CEO - received a 100% year-over-year raise, bringing his salary to almost $17 million this year alone. However, the Gap noted that he was not awarded any bonuses due to his failure to reach financial objectives. It is not difficult to see why investors would applaud a new CEO, and combined with the possibility of a leveraged buyout, GPS is definitely a stock worth keeping an eye on.
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