Must Read - AIG's Benmosche Threatens to Jump Ship, Wall Street Journal

Anyone following top executives has to read today’s story by Liam Pleven, Serena NG, and Joann S. Lublin in the Wall Street Journal. The column is entitled, AIG’s Benmosche Threatens to Jump Ship. Benmosche, AIG’s hard charging CEO, appears to be exacting pressure on the AIG board and the Obama Administration.

At a board meeting last week, the strong-willed industry executive told fellow AIG directors that he was “done” but agreed to think it over after other board members reacted with shock, according to the people.

… It isn’t clear whether Mr. Benmosche would actually resign. In his short tenure at AIG, he has developed a reputation for making provocative remarks and ruffling feathers as he seeks to achieve his goals.

He has only been CEO for three months and continues to make waves. He has a little of AIG’s famous former CEO Hank Greenberg in him. Check out the story.

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Altantic Wire

CNN Money

Crain's NY

Clusterstock

Recommended Reading - Bank of America Bumps Into Hurdles in CEO Hunt, Wall Street Journal

The never ending saga of Bank of America and the search for Ken Lewis’ replacement continues. According to a story by Dan Fitzgerald and Joann S. Lublin for the Wall Street Journal,

Bank of America Corp.’s search for a new CEO has slowed as directors sift through outside candidates that are in short supply, according to people familiar with the process.

Check out the entire story.

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NY Post

Dealbreaker

Dealscape

Bloomberg

Charlotte Observer

Recommended Reading - Bank of America's top pick for a new CEO? The one who created this mess, BloggingStocks

Zac Bissonnette, a frequent contributor to BloggingStocks.com, wrote a spot on piece on the possibility (mentioned by the WSJ and Atlanta Business Chronicle) that Bank of America may select Gregory Curl, the bank’s chief risk officer, as an interim CEO. The interim CEO would serve until a permanent replacement is found for Ken Lewis upon his retirement. What is the bank (the board) thinking? This is the kind of trial balloon that should never happen. Curl was the chief risk officer at the time of the ill-fated Merrill acquisition. Stay tuned.

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ClusterStock

Recommended Reading - Financials Post Sign of the Times: CEO Wanted, Wall Street Journal

Susanne Craig and Joann S. Lublin wrote a story that appeared in today’s Wall Street Journal that examined the dearth of financial CEOs available to come in and run many of our troubled financial companies. According to the story,

The strain of the credit crisis, curbs on executive compensation and the specter of government scrutiny are making it harder for financial firms to lure chief executives, according to directors, executives and search firms.

“There aren’t any highly attractive CEO prospects in the financial-services industry,” said Peter D. Crist, head of Crist|Kolder Associates, an executive-search firm in Hinsdale, Ill. “The best players won’t risk their careers going to a troubled enterprise.”

… One problem is that the financial industry’s crisis has shown that some firms simply might be too much for anyone to conquer. Eventually, boards will find new CEOs who are confident enough to give it a try no matter how big the risks. For now, the pickings are slim, said recruiters involved in continuing searches.

I am not quite as sanquine about the prospects for finding new CEOs to run the troubled financial firms as are those referred to in the story e.g., executive search firms, directors and executives. I agree that finding the right candidates will be challenging but that is always the case. There are good candidates out there and many are up to the challenge, even if compensation does not meet their initial expectations. Decide for yourself, check out the story.

Steve Jobs - Maybe he is not indispensable to Apple

The recent news from Apple that Steve Jobs has issued a last minute cancellation of his keynote at the upcoming MacWorld event stirred new speculation on his health and what it might mean to Apple.  Rather than explore Jobs’ health status for which I have nothing new to bring to the issue, the real question remains what it might mean for Apple should he leave.  While many people have viewed the loss of Steve Jobs as Apple’s CEO as near cataclysmic, Justin Scheck and Neal Wingfeld of the Wall Street Journal wrote a piece that was far more circumspect over the consequences of Jobs leaving the company.  According to the story,

What if that situation does change? There is reason for optimism, based on the evolution of the team that develops Apple’s hardware, software and services, some people familiar with the company’s internal workings say. Some of them believe the group is now strong enough that, barring an exodus of top talent, the company could keep churning out innovative products without Mr. Jobs.  

Mr. Jobs did not respond to a request for comment…. 

In one possible sign of confidence in the management team, an unprecedented number of executives presented during the company’s press event to unveil its new MacBook lineup in October, though Mr. Jobs still dominated the event. 

… Mr. Crow contends that Mr. Jobs has now hired or elevated enough people whose product vision mirrors his that the company could continue to thrive. Mr. Ive is particularly in tune with Mr. Jobs’s thinking, he notes. Mr. Jobs’s sensibilities are also so deeply ingrained in lower-ranking designers and engineers that “a lot of people there will say ‘gee, what would Steve think about this,’ when Steve really isn’t thinking about it,” Mr. Crow says. 

Rick Devine, an executive recruiter in Silicon Valley with Devine Capital Partners, thinks Apple could continue to thrive in a post-Jobs world, predicting that the company will depend more on execution in the coming years than the kind of radical reshaping Mr. Jobs engineered over the past decade. Mr. Devine helped recruit Tim Cook, now Apple’s chief operating officer, to the company more than a decade ago.

 The authors make a good case for further success at Apple even without Jobs as long as key management talent remain.  To get the full story check out the entire article.

For more:

GigaOm

Recommended Reading - Carly Fiorina Op-ed in Wall Street Journal

Carly Fiorina, former chairman and CEO of Hewlett Packard, wrote an interesting editorial in today’s Wall Street Journal, entitled, Corporate Leadership and the Crisis, CEOs seeking bailout should be willing to resign.  According to Fiorina, 

In a fast-paced, hypercompetitive, technology-driven world, common sense, good judgment and ethics matter more than ever. The American people expect leaders to have sufficient wisdom and perspective to buck the crowd and defy conventional wisdom when necessary, even if it isn’t popular at the time. Quarterly earnings and share price cannot be the singular purpose of business or metric of success for CEOs. Shareholders are not the only constituency a CEO and board serve. Businesses have equally important obligations to employees and customers. A CEO’s job is to balance the competing requirements of all of these constituencies.  

Business has an important role to play in rebuilding confidence and restoring credibility. To strengthen accountability, boards should put all aspects of CEO pay up for shareholder vote on an annual basis. Clawback provisions, which require a CEO to return compensation to shareholders if promised results aren’t delivered following their departure, should be included. CEO pay should be based on a balanced scorecard that reflects customer satisfaction and investment in employees, in addition to achievement of financial goals

Every board seat should be voted on annually and board membership should be regularly refreshed to ensure that tough questions continue to be asked. And when CEOs go to Washington and ask for taxpayer money, they should also be prepared to submit their resignations and those of their boards. To earn a bailout, a CEO and board should be held accountable for the decisions they’ve made — or perhaps the actions they’ve failed to take.  

Fiorina, who I am not a fan of, has defined a number of proposals the new administration should take under advisement and consider implementing as we move further into the ongoing financial/credit crisis.  Please read her entire editorial, she has a number of very worthwhile ideas to consider.

CEO Watch List - Martin Sullivan, AIG, Update 1

Just a month ago I put AIG's CEO Martin Sullivan on my CEO watch list.  So far, Sullivan has managed to keep his job.  According to Felix Salmon of SeekingAlpha.com the Wall Street Journal has run another story today placing new pressures on Sullivan.  According to the WSJ article by Liam Pleven and Randall Smith,

American International Group Inc.'s embattled chief executive, Martin Sullivan, is now facing mounting dissent from some of his largest shareholders.

Two days before AIG's May 14 annual meeting, three major shareholders who effectively controlled more than 100 million shares -- about 4% of the company's stock at the time -- sent a blistering letter to the company's board....

... people familiar with the board say Mr. Sullivan needs to turn things around fast. Amid widespread turmoil in the credit markets, AIG has reported two consecutive record quarterly losses totaling $13 billion -- almost as much as the firm made all of 2006 -- and last month raised $20 billion to bolster its finances, a remarkable reversal for an insurer long prized by investors for its business savvy.

The added pressure of the WSJ article definitely turned the screw a bit more on Sullivan's chances to survive as CEO.  Keep a close eye on AIG and any new business decisions Sullivan and/or the company makes.

Recommended Reading - More on the Need for Succession Planning - WSJ

Carol Hymowitz wrote a story in today's Wall Street Journal entitled, Too Many Companies Lack Succession Plans, Wasting Time Talent. The story is a worthwhile read particularly if you are interested in CEO turnover and its impact on a company.

CEO Watch - Charles Prince, Citigroup Update 4

Prince's time may finally be up.

As Citi's stock continues to slide and calls for Prince's head have grown the end seems near. Charles Prince, Citigroup Inc.'s CEO, will offer to resign Sunday, according to sources cited in a Wall Street Journal report.


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Telegraph UK
Reuters
Wall Street Journal
CNN
Bloomberg
AP
AFP
Reuters

Microsoft Looks To Outside Talent to Compete

Microsoft MSFT (NASDAQ) appears to be taking a new tack in its competition with Google and other competitors. According to a piece by Robert A. Guth in the Wall Street Journal, Microsoft has finally recognized the need to hire outside the firm to compete with it rivals. In the piece Guth stated,

Before Brian McAndrews agreed to take charge of a crucial piece of Microsoft Corp.'s online advertising business, he insisted on a key condition: that he be granted certain power over the engineering part of the operation.

For a quick look on the outside talent Microsoft has hired over the last number of months, contact Liberum Research and we will provide a overview for free.

For more see:

Bloggingstocks

CEO Pay - A Surprising Argument in Favor

Former Secretary of Labor in the Clinton Administration, Robert Reich, recently provided surprising commentary in a September 14 piece in the Wall Street Journal. Reich who was usually perceived as far to the left of his boss, Bill Clinton, recently wrote a piece entitled CEOs Deserve Their Pay. Worth a look, I prefer to defer comment on the issue.

For more see:

Economist's View Blog
Business Week Management IQ Blog
ReputationXchange Blog