Chairman-CEO Structure - Transitions from Long-Term CEOs

Thirty-four of the companies had leadership transitions involving the departure of long-time (10 to 38 years) CEOs, several of them founders.

These companies were not more likely to change leadership structure than the F100 overall. However, when they have changed structure – upon departure of the long-time CEO or later in our analysis period – it has been predominantly to split the roles. Twelve companies split the roles; two split then recombined.

In all but four transitions, the incoming CEO was a company insider. The exceptions were:
  • At Cardinal Health, when founder Robert Walker stepped down as CEO in 2006, he was replaced by P&G executive Kerry Clark, whose tenure lasted less than three years.
  • When INTL FCStone co-founder Diego Veitia stepped down as CEO in 2002, he was succeeded by Sean O’Connor, who joined from Standard Bank. He continues as CEO today.
  • When Leland Brendsel resigned as CEO of Freddie Mac under pressure in 2003, he was replaced by the first of four outsiders since brought in, one of them a government conservator during the financial crisis.
  • CHS Inc has had two transitions from long-time CEOs. The recently appointed CEO, Carl Casale, is an outsider from Monsanto with deep industry experience.

Among the companies in the Always Combined and Combined with Transitions groups, these transitions were for the most part well planned and executed, and the transitions came about with executive retirements.

An exception was the more recent change at Johnson & Johnson, which has had two transitions from long-serving CEOs since 2000. R. S. Larsen retired in 2002 after 13 years as CEO and was replaced by William Weldon, who stepped down ten years later. Weldon was forced to resign amid a combination of over-the-counter drug recalls, government investigation into clandestine product recalls, FDA warnings about false product claims, and an SEC investigation into bribery of doctors overseas. Alex Gorsky succeeded the embattled CEO in April 2012, and replaced him as Chairman eight months later.

Transitions were also orderly among the Always Split and Single Split companies, except at Bank of America and Freddie Mac during the financial crisis, and at UnitedHealthcare, where CEO William McGuire was forced to resign in 2006 amid allegations of backdating stock options. Best Buy is a special case in that the Chairman and CEO roles have been split since founder Richard Schulze relinquished the CEO role in 2002. However, he remained Chairman until 2012.

Table 7: Transitions from Long-Term CEOs

The Complex Changes companies naturally have the more unusual stories. Two now have roles combined (Dell and Disney); the other three are currently split.
  • Hank Greenberg, CEO of AIG since 1968, resigned in 2005 amid allegations (later dropped) of fraudulent business practices.
  • Founder Michael Dell stepped down from the CEO role after 21 years in 2004, only to resume it in 2007 after his successor, Kevin Rollins, experienced a business downturn and an SEC probe that got him fired. 
  • Humana experienced the least drama among these companies, although the former long-time CEO, Michael McCallister, recently stepped down from the Chairman role sooner than expected.
  • SuperValu had a smooth transition from long-tenured CEO Michael Wright to Jeffrey Noodle in 2001. But it has had three CEOs since Noodle stepped down in 2009, a period of business downturn, restructuring, and asset sales.
  • Walt Disney had much-publicized boardroom battles that led to Michael Eisner’s stepping down as CEO in 2005, but his successor, Robert Iger, has recombined the Chairman and CEO roles.