Caterpillar Shows How Succession Planning is Done

Caterpillar CAT (NYSE) today announced its CEO succession plan for the retirement of current CEO, James W. Owens. The company has picked an insider, Douglas R. Oberhelman, to succeed Owens. According to the firm’s press release,

The Board of Directors of Caterpillar Inc. (NYSE: CAT) elected Douglas R. Oberhelman to the offices of Vice Chairman and Chief Executive Officer – Elect, effective January 1, 2010. Oberhelman, 56,

currently serves as Group President of Caterpillar with responsibility for the company’s engine and gas turbine businesses, human services, rail services and remanufacturing divisions

…. Announcing the succession plan at this time allows Oberhelman to concentrate on aligning resources for the future and defining critical success factors for Caterpillar’s leadership going forward. He will serve as Vice Chairman and Chief Executive Officer – Elect until the June 2010 Caterpillar Board of Directors meeting, at which time he will be elected Chief Executive Officer and a member of the Board of Directors, succeeding James W. Owens, 63. Owens will continue to serve as Chairman of the Board and Chief Executive Officer until July 1, 2010. He will remain as Chairman of the Board through October 31, 2010, when he will retire in accordance with the company’s long-standing mandatory retirement policy and be succeeded by Oberhelman at that time…

Expect a relatively smooth transition going forward. More firms need to take heed and examine what Caterpillar has done on CEO succession.