ADT CEO Is Out

I heard that Tim Whall and Bryan Schmode are filming down in Zihuatanejo

Btw, one thing we did not mention in the story is that this is really weird timing to announce a disruptive move. Normally, these things are done on a Friday (last Friday would have been perfect with the long US holiday weekend). Doing it on a Tuesday means business people have the rest of the week to talk about it.

Does this mean the Whall daughters leave the install team? I imagine stock will drop more if it is found that they will no longer be affiliated...

from outside the security industry

This is starting to be a clear indicator of companies in trouble and/or looking for exits.

Briefcam hired an outsider CEO and then shortly sold to Canon

Pelco hired an outsider CEO and is being shopped around for sale (though that CEO is now also out)

3VR brought in Al Shipp

MONI brought it Jeff Gardner, and while the company has not sold or folded, they are clearly having problems.

I can't think of any cases where an outsider CEO came into an established security company and really did a good job turning it around or stabilizing it. They all seem to end in various forms of failure or sale.

There have been cases of outsider CEOs starting companies that are successful (eg: Avigilon), but I think in those cases the CEOs are able to learn the nuances of the security industry along the way as the company scales up.

This is also not to say all insider CEO swap-outs are going to be signs of success either, but outsiders have very low probabilities of success.

The Facebook discussion on this is lit with ADT and former ADT employees comments. Notables include:

ADT for years has controlled the $27.99 price point - A dollar a day monitoring.  Now with Simply Safe and Ring/Amazon they are no longer the leader on price.  Tim Whall tried to improve services but ran out of time.  That along with his comments that upset his employees about his daughters being able to install alarms.  Also, ADT has really not embraced the smart home concept that I believe is the future of our industry.  Would you pay what you pay for your smart phone if it only made calls for you.  The answer is no.  We need to pay attention to what the cell phone industry has done and make our alarm systems as needed as our smart phones.  Energy efficiency, lifestyle enhancements and staying connected. If ADT wants to turn their stock value around they need change now or this 140 year old+ company could be in trouble. 

Ron Pullen

Update: stock is down 7% this morning, back down under $9. This signals that overall investors are concerned and were surprised about the move:

An email sent to ADT's employees:

Was he there long enough to get his wife a $6,000 shower curtain? I understand that is one of the perks of the position. 

Final Chapter....I doubt that!! He'll be with someone new by ISC West! 

Its a shame, I thought the quote at Barnes Buchanan was not that offensive when I heard it. It was old news anyways (Feb 2017). ADT has significant issues to solve, but getting rid of this CEO was stupid. Another example of why PE firms usually fail trying to run a business.    

UPDATE: Whall Out From Board Too

13 months after Whall's resignation as CEO, he has now resigned from the Board as well, ADT announced:

Moreover, his non-compete expires in just over a year and a half, so could Whall make a comeback at an ADT competitor?

ADT's stock is down 20%+ since Whall resigned as CEO back in September 2019 (just $9 per share vs today at $6.74). On the other hand, ADT's stock was down from $12+ when it went back public early in 2018 to when Whall resigned, so their stock challenges have continued during and after Whall's tenure.

First off, let me be upfront in stating that Yes, I am an employee of the new ADT. I came over from another national security provide just over 18 months ago, so I’m new to ADT, but not that new. I also have been in the industry for over 20 years, about 12 of which were with a local integrator before moving to a national provider, so I am very aware of how ADT is / was viewed from inside the security world.

I firmly believe that the most, if not all, of the negative comments from ADT employees were from employees of the old ADT, the one owned and mismanaged by TYCO before being sold off by JCI. The micro-managing mentioned is most likely a symptom of being held accountable, which is a cornerstone of the P1 ways of doing business.

If you are ever fortunate enough to be able to spend a day at their National Account Operations Center in Dallas, you’ll find a facility full of people who seem to genuinely like what they’re doing and who they’re doing it with. In the field, the reports from customers say the same. I think their biggest issue is separating the new ADT Commercial (P1) from the old ADT residential (Tyco) and getting the message out to the masses that this is a completely new company. Their recent acquisitions of powerhouses like RedHawk, ASG, MSE and many others show they are committed to being the best Commercial security provider in the country. And that fact that the chief stakeholders of the acquired companies continue to work for the new ADT is a telling tale that they are on the right track.

Tim Whall did what he set out to do when he started P1, and he was universally liked and respected throughout the company. And so far, Jim DeVries has been an excellent driving force filling the vacuum left from Tim’s departure. Whatever Tim decides to do next, I wish him the best and am confident he’ll be extremely successful. And if that is doing nothing more than spending time with his grandkids as he mentioned he wanted to do, then all the better for getting out while he still has time to do that.