The fight to get Berkshire Hathaway (BRK.A, Financial)(BRK.B) to name Warren Buffett’s successor continues, with the AFL-CIO coming out last and asking that the company begin to update shareholders annually on the status of Buffett’s future replacement (that would be quite an exercise without revealing who it is, unless the update was simply “he/she still works here”). My contention would be that anything beyond what has currently been revealed (Berkshire already has said they’ve identified four executives capable of being CEO, which has generated plenty of speculation about who the successor is) would all but guarantee that the successor’s name is revealed, which creates a bigger issue: Buffett isn’t leaving today; for all anybody knows he might be running Berkshire in 2020.
Which brings us to today’s news story that shows what happens when the CEO’s successor is announced: Alex Gorsky, the former chairman for medical devices Johnson & Johnson (JNJ), was named as outgoing CEO William Weldon’s successor in late February of this year (article here). This morning, less than two months after the succession plan was announced, JNJ felt its first reaction to the decision:
Sheri McCoy, who has been with J&J for 30 years, including a position as worldwide chairman of the Pharmaceuticals division for the past three years, announced her resignation; for those who don’t know, it was common knowledge that Mr. Gorsky and Mrs. McCoy were the two contenders for the top spot at Johnson & Johnson after both were named company vice chairman in January 2011. As a result of her resignation, Mrs. McCoy has joined Avon, the leading global beauty company ($11B in sales), and will become CEO effective April 23rd. Mrs. McCoy had this to say:
"I am extremely honored and excited to join Avon--a great company with an iconic brand and so much clear potential. Avon has an unparalleled global direct selling sales force of over six million Representatives and an enviable geographic footprint. I look forward to working with the team to develop and execute a roadmap to achieve the next phase of growth for the company."
Announcing a successor for the world to know WITHOUT ANY IDEA OF THE CURRENT CEO’S DEPARTURE DATE is an overreaching task that isn’t pursued by a single company that I can think of; the likely reason is that it all but invites a rash of insider disappointment (lots of people want to be the top dog) that results in departures, generally in a similar industry to a close competitor. In my mind, Berkshire would do best to stick with their current plan and wait to make an announcement until such a decision is required.
Which brings us to today’s news story that shows what happens when the CEO’s successor is announced: Alex Gorsky, the former chairman for medical devices Johnson & Johnson (JNJ), was named as outgoing CEO William Weldon’s successor in late February of this year (article here). This morning, less than two months after the succession plan was announced, JNJ felt its first reaction to the decision:
Sheri McCoy, who has been with J&J for 30 years, including a position as worldwide chairman of the Pharmaceuticals division for the past three years, announced her resignation; for those who don’t know, it was common knowledge that Mr. Gorsky and Mrs. McCoy were the two contenders for the top spot at Johnson & Johnson after both were named company vice chairman in January 2011. As a result of her resignation, Mrs. McCoy has joined Avon, the leading global beauty company ($11B in sales), and will become CEO effective April 23rd. Mrs. McCoy had this to say:
"I am extremely honored and excited to join Avon--a great company with an iconic brand and so much clear potential. Avon has an unparalleled global direct selling sales force of over six million Representatives and an enviable geographic footprint. I look forward to working with the team to develop and execute a roadmap to achieve the next phase of growth for the company."
Announcing a successor for the world to know WITHOUT ANY IDEA OF THE CURRENT CEO’S DEPARTURE DATE is an overreaching task that isn’t pursued by a single company that I can think of; the likely reason is that it all but invites a rash of insider disappointment (lots of people want to be the top dog) that results in departures, generally in a similar industry to a close competitor. In my mind, Berkshire would do best to stick with their current plan and wait to make an announcement until such a decision is required.
