The Billion-Dollar CEO Transition

The Billion-Dollar CEO Transition

For all the talk of technology making human beings obsolete, we live in a talent-driven business environment, and nowhere is that more true than at the top of the corporate hierarchy. Recent studies of CEO impact have found that the competence of the chief executive makes a huge difference to business performance and shareholder value, which is why directors are quicker than ever to fire underperforming CEOs and why mergers and acquisitions aimed at “acqui-hiring” the CEO of the acquired company are becoming more common.

The latest reminder of the outsized value of the CEO came with Tyson Foods’ announcement last week that its CEO Donnie Smith would step down at the end of this year. Tyson’s stock had quadrupled during Smith’s seven-year stint at the helm, Geoff Colvin and Ryan Derousseau noted at Fortune, and news of his departure contributed to an instant $3.4 billion decline in the company’s market value.

“The larger point,” Colvin and Derousseau explain, “is that this type of value-jarring scenario is playing out more often, and it didn’t used to happen.” They point to some other recent examples of high-level personnel changes that led to sudden shifts in the market:

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Will Minimum Wage Hikes Spur Automation? Maybe Not at McDonald’s

Will Minimum Wage Hikes Spur Automation? Maybe Not at McDonald’s

Opponents of a higher minimum wage in the US, particularly the $15 minimum for which labor activists have been fighting, argue that higher wages for bottom-rung workers will merely hasten the automation of low-skill tasks, putting employees out of work. This is particularly true in the fast food industry, where at least one fully-automated restaurant chain already exists in the US and business leaders like Carl’s Jr. CEO and minimum-wage-hike critic Andy Pudzer, are looking to invest heavily in automation. It seems increasingly likely that fast food will be an extensively automated industry within the coming decades—perhaps regardless of what happens to the minimum wage.

In that context, a statement from McDonald’s CEO Steve Easterbrook at the company’s annual shareholder meeting on Thursday is worth noting. His company, he said, probably won’t replace humans with robots, even if it has to pay those humans $15 an hour, Reuters reports:

“I don’t see it being a risk to job elimination,” Easterbrook said when asked about the wage/robot theory. “Ultimately we’re in the service business. We will always have an important human element.”

Easterbrook has cited improved customer service as a key reason for McDonald’s recent turnaround. Higher pay and technological advances are more likely to result in workers being shifted to dining rooms and more service-oriented roles, he said.

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Campbell’s New Parental Leave Policy Is Gender-Neutral, But Not Quite Equal

Campbell’s New Parental Leave Policy Is Gender-Neutral, But Not Quite Equal

Campbell Soup Company CEO Denise Morrison announced on Thursday that the company was introducing a new parental leave policy for its US employees, the Philadelphia Inquirer reports:

Campbell’s paid leave, available to 9,650 U.S. employees, comes on top of six to eight weeks of paid disability but does not apply to union employees. …

At Campbell, full- and part-time employees on the job for a year and working more than 20 hours a week are eligible. A company spokeswoman said that Campbell cannot unilaterally impose policy changes on the 1,500 union members who work at facilities in Ohio and Texas, but that it would take up the issue during the next contract talks.

Under terms of Campbell’s policy, primary caregivers will get 10 weeks of paid leave, two of which can be used intermittently, all within a year of the child’s arrival. Secondary caregivers can get two weeks of leave.

Importantly, Campbell’s policy does not distinguish between mothers and fathers, or between adoptive or birth parents. In that respect, it is more progressive than those that only or primarily benefit birth mothers. However, unlike organizations like Twitter and Bank of America, whose recently revamped parental leave policies give the same amount of leave to all parents, Campbell’s still distinguishes between primary and secondary caregivers, which as the Huffington Post’s Alexander C. Kaufman notes, “may mean the so-called parental policy will still effectively be about women”:

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