Look beyond Micron for a moment to the larger issue of CEO succession.
According to a 2010 survey of North American CEOs and board members, only 54% are grooming an executive as a CEO successor. And 39% of survey respondents had no internal CEO candidate in mind, according to the survey by Stanford University's Rock Center for Corporate Governance and Heidrick & Struggles.
- only 50% of survey respondents said their boards had developed a written document detailing the required skills for the next CEO and that, on average
- corporate boards only spent two hours a year discussing CEO succession planning
- A board's nominating and governance committee, which are usually charged with finding a new CEO, spend on average only four hours
- while 71% of internal candidates know they are part of a formal talent development pool, half of them don't receive regular annual or semiannual talks to let them know where they stand or whether they're in the running for the CEO slot. So some of those in the company's talent pool may defect to another employer.
As investors, how comfortable are you with this devil may care attitude about succession planning, especially at companies where 1) the CEO is a daredevil; 2) the CEO has health issues or potential health risks or 3) the CEO is the primary driver of policies and practice?
Re: I have to wonder
Phoenix
2/9/2012 10:18:42 AM
I agree with you that a change in leadership shouldn't affect the company that much. Since he was well known investors would become a bit hesitant at first as the figures show. But i think at the end of the day it will all depend on how the company manages to come up with new innovations and keep up ahead of the competition.
Re: Micron is the AMD in storage field
Value Hiker
2/8/2012 7:59:35 PM
I don't like "very important person" insurance. Few people likes to be insured while the beneficiary is not their spouse or close family member. The following story about Walmart life insurance may shed some light on this issue:
http://www.freerepublic.com/focus/news/666837/posts
well, Cisco's broken out back above $20 and it beats..
REUTERS - Network equipment maker Cisco Systems Inc (NasdaqGS:CSCO - NewsCSCO.O) said second quarter earnings and revenue beat average estimates, leading it to increase its dividend.
Revenue rose 10.6 percent from the year-ago quarter to $11.5 billion. Analysts on average were expecting $11.23 billion.
Net income grew to $2.2 billion, or 40 cents per share, from $1.5 billion, or $27 per share, a year earlier.
http://finance.yahoo.com/news/Cisco-Q2-results-beat-reuters-2724270860.html?x=0
Re: Micron is the AMD in storage field
Broadway
2/8/2012 4:11:52 PM
It would be interesting to find out if Micron had "very important person" insurance, a special kind of disability coverage that can kick in when an irreplaceable or otherwise important member of the firm becomes incapacitated or killed in this case. The coverage can be designed to help the enterprise survive the shocks to share price, lost business, business interruption etc. that can occur with monumental news. Or perhaps if Micron is not an impressive company to begin with, we should save this question for when an industry icon/leader succumbs? (Or perhaps we should have brought it up with Steve Jobs?)
Condolences to the CEO's family. But I have to say Micron has never been a great investment. tiny margins on the chips and in the downturns they always get killed.
The hedge-fund manager Bill Fleckenstein likes to refer to the company as the "Flying Pig."
Micron is the AMD in storage field
Value Hiker
2/8/2012 3:01:29 PM
Micron to Sandisk is what AMD to Intel. It is perpetually swinging between loss and profit. In the Boise, Idaho, Appleton may enjoy some fame, but "a local Steve Jobs" is kind of exaggeration.
I have to wonder how much the loss of the CEO will really matter, it seems that they are doing good with their interm plan, and unless they bring in someone who either drops the ball or really shakes things up I would think the company will just keep moving along, and will hopefuly be able to turn a profit as the industry picks up for them.
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