Robert Gillette, a former CEO of Honeywell’s Aerospace, was selected as First Solar’s FSLR (NASDAQ) new CEO. Gillette succeeds Michael Ahearn who will remain as the firm’s executive chairman. Gillette’s selection appears to be a terrific choice. Stay tuned.
For more:
Jena McGregor wrote a piece for BusinessWeek that examined the surprising slow level of CEO turnover throughout the current recession. While overall unemployment during the same time frame has reached decade highs most top executives with obvious exceptions have managed to stay put. McGregor summed up the situation as follows:
When Abraham Lincoln and Franklin D. Roosevelt campaigned for reelection during wartime, they told voters it was a bad idea to switch leaders midstream. Today, CEOs seem to be convincing their boards of the same thing.
The reporter turned to Liberum for some of her statistics. As reported in the piece, Liberum anticipates an increase in top level turnover as we move into the Fall. Stay tuned.
John Mackey, the chairman and CEO of Whole Foods WFMI (NASDAQ), has found another opportunity to put his foot in his mouth. Mackey, Whole Foods’ controversial chairman and CEO, recently wrote a highly publicized op ed piece in the Wall Street Journal criticizing President Obama’s plan to reform healthcare. Many shareholders and shoppers at Whole Foods were quite distressed by Mackey’s comments in the piece. This is not the first time Mackey has found himself
on the hotseat. Back in 2007 he nearly destroyed his company’s efforts to acquire Wild Oats one of his firm’s key competitors. Mackey was discovered to be writing negative comments about Wild Oats under an assumed name on Yahoo’s Finance Message board. The controversy nearly cost him his job. Then recently he was quoted during an earnings call in which he said,
“We sell a bunch of junk.”
Mackey now finds himself under pressure from activist investor CtW Investment Group. The firm recently wrote a letter calling for his dismissal as chairman and for the firm to develop a succession plan for his CEO position. I think the latest controversy will not disappear quickly and it is quite possible his time is numbered.
For details:
Joann S. Lublin wrote a story for the Wall Street Journal on the compensation package Valeant Pharmaceutical’s VRX (NYSE) CEO, J. Michael Pearson has had with his firm since 2008. Unlike so many CEOs, Pearson’s compensation was desig
ned to be a real performance package. According to Lublin’s story,
… Directors of the midsize drug maker required him to buy at least $3 million in stock (when be began), forgo routine annual equity grants and hold many shares for years before selling.
No single element is unique, but the combination is rare — for a public company.
… Pay experts say the deal gives Mr. Pearson incentives to boost long-term value for investors. For example, the 49-year-old CEO only gets to keep certain restricted shares if Valeant’s share price increases at least 15% a year through February 2011. Mr. Pearson can’t sell most restricted shares or exercised stock options for two years after they vest.
… “Many companies would benefit from imitating this or moving in this direction,” adds Steven N. Kaplan, a University of Chicago business professor and pay researcher. “More pay for performance is a good thing.
This is the type of compensation package that needs to get a great deal more attention by shareholders, the press and even government regulators. If more and more companies look at this model and try and use it as a guide we may actually see compensation excesses fade as an issue.
Paul Otellini, Intel’s CEO, received high praise for his three year push to make the firm important again. In a story by Paul Johnson for the Mercury News the reporter wrote,
Since becoming Intel’s CEO four years ago, Paul Otellini has presided over one of the most dreadful periods in the Santa Clara chip maker’s history.
… When he took control of the company, it was staggering from a string of questionable business ventures and product missteps, and its once high-flying stock began to sag. Then its sales practices came under increasing regulatory scrutiny, recently resulting in a $1.45 billion European antitrust fine. As if that weren’t enough, it got body slammed by one of the nastiest recessions ever.
… But all in all, analysts say, Otellini’s record so far has been impressive.
“About three years ago, half the Street was calling for his head” said Hans Mosesmann of Raymond James & Associates. Today, he added, “I’d give him very high grades. B-plus, A-minus. Pretty darn good considering all the stuff he inherited.”
Otellini deserves all the praise he has received and more. Despite the many difficulties he has faced since taking the reins of the company overall he has managed to perform what many might consider a minor miracle.
Jalopnik, the car blog, leaked a GM Memo today on more management and strategic changes planned for the struggling car company. For those interested in the auto industry and particularly in General Motors check out the leaked memo.
GM’s new chairman, Ed Whitacre the former AT&T chairman and CEO, appears to be taking his news responsibilities seriously. According to a story by David Welch in BusinessWeek,
General Motors’ recently installed CEO, Frederick A. “Fritz” Henderson, has had just one board meeting with his new slate of directors. And already they are giving him pressure to show better results.
… (Henderson’s) first board meeting shows a stark contrast from GM’s old board. With a few exceptions, the previous directors showed a lot of patience with ousted Chairman and CEO Rick Wagoner. He racked up some $80 billion in losses since 2005 but kept solid backing. The old board also had to focus mostly on costs since the automaker has been in nearly constant restructuring mode for years.
… At the meeting, new Chairman Ed Whitacre, who had previously been chairman and CEO of AT&T (T), and several other directors pressed Henderson on how the company would build revenue, strengthen its brands, and communicate the message that its new products are competitive. “All of their questions were on revenue,” Henderson said, adding that they asked, “What are your metrics? How will you hold yourself accountable?”
While the government has been constantly under criticism for getting involved in the auto industry’s affairs and bailing them out so far, it has demonstrated far more moxy in relation to management than previous shareholders. Let’s hope the new board can really get some results out of GM’s new CEO, Fritz Henderson and his management team. Stay tuned.
