Shares of Michaels surged more than 32% Friday after the arts and crafts retailer said it was replacing its new CEO Mark Cosby with Walmart executive Ashley Buchanan as part of a leadership shuffle.
Buchanan will become president and designated CEO starting on Jan. 6, while Cosby will stay on through April 1 to help with the transition, the company said. Cosby, who's been officially on the job for just over two months, will remain on the board afterward.
Buchanan will receive an annual base salary of $1.2 million and a signing bonus of almost $3.7 million that vests over two years, Michaels reported in an SEC filing. The signing bonus also covers certain Walmart bonuses that he forfeited by joining Michaels. The board also awarded Buchanan 500,000 options and 795,000 shares of restricted stock to be priced Jan. 6 that vests over two years. The restricted shares were worth $4.8 million as of Thursday's closing price of $6.02 a share.
Cosby served as an interim chief executive starting in February before officially being named CEO on Oct. 21. Before joining Michaels, Cosby was president of Office Depot's North America business.
"It has been an honor to lead Michaels and to help the company clearly define its core customer and develop a strategy centered on the Makers," Cosby said in a press release.
Buchanan, who joined Walmart in 2007, moved from chief merchandising officer at Sam's Club to become chief merchandising officer for Walmart's U.S. e-commerce business in the retailer's own executive shuffle announced in July.
"I am excited to welcome Ashley as his impressive skills and extensive experience make him uniquely suited to lead Michaels into its long and bright future," Cosby said. "He brings innovative thinking and a wealth of merchandising and digital expertise that will help us engage our Makers and deliver unique crafting experiences."
As part of the executive shuffle, Michaels announced that CFO Denise Paulonis has accepted a position with another company and will be leaving Michaels at the end of January after more than five years, Michaels said.
This year has marked one with high CEO turnover. Through November, 1,480 chief executives left their companies in 2019, which is the highest number on record in the first 11 months of a year, according to business and executive coaching firm Challenger, Gray & Christmas. The highest total year on record was in 2008 when 1,484 CEOs departed when the economy was embroiled in the financial crisis. The firm started tracking CEO departures in 2002.
Shares of Michaels closed at a price of $8.00. The stock is still down more than 40% year to date.
— CNBC's Maggie Fitzgerald contributed to this report.