Ceridian Corporation (NYSE:CEN) shares moved down $1.01, or 3.07%, to $31.86 after the company's Chief Financial Officer, Douglas Neve, resigned and Gregory Macfarlane was appointed to take his spot. Further compounding this loss was Pershing Square's press release in which they expressed concerns about the company's new CFO and the board's failure to retain key management personnel. The news comes amidst a proxy contest currently taking place between the company and Pershing Square and a recent lawsuit filed by the hedge fund seeking the release of certain letters related to communications between the company's board and management.

What problems did Pershing Square find with this CFO replacement? Well, the hedge fund first highlighted Mr. Neve's career in which he has been widely credited with re-staffing and rebuilding the company's finance and accounting organization, restoring investor confidence in the company's financial statements (after an SEC investigation and five restatements!), and driving Ceridian's HRS division margin improvement program. Clearly, he is a man that will be missed by analysts and investors. Then Pershing questioned the appointment of a division-level finance executive as CFO - someone who lacks experience with public companies. They questioned how the company concluded that this was the right hire at the right time. Moreover, they question why the board remains not only unconcerned about the departure of several high-profile executives but also the recent influx of former GE employees who have little experience in the markets in which Ceridian operates.

Clearly, there is reason for concern when several important executives leave the company. Pershing concluded their statement by saying that the board of directors should act with appropriate care regarding long-term employment commitments they extend throughout the company's senior ranks. If the hedge fund is successful in their proxy contest, we can be sure that greater care will be taken to retain key personnel necessary to orchestrate a turnaround and spin-off. Whether or not they are successful in their proxy contest remains to be seen, but for now, this is definitely a great stock to watch!

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