Pfizer’s (NYSE: PFE) CEO Jeff Kindler resigned because he was tired, he says. “The combination of meeting the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demanding on me personally.”
In reality, he was almost certainly pushed out. Ian C. Read, 57, currently head of the company’s global biopharmaceutical operations, was promoted. That is odd because he was part of the executive team that presided over the botched integration of Wyeth and Pfizer’s lack of the ability to create new “blockbuster” drugs.
The Pfizer board did not have the guts to go outside the company to find someone to help reverse the firm’s faded fortunes and its dropping stock price. It was unwilling to put someone who could completely reevaluate the company’s fortunes into the seat at the head of the table, the way that Ford (NYSE: F) did successfully two years ago.
Boards, it seems, have decided now that the recession is over, they can afford to replace incompetent CEOs. Massey (NYSE: MEE) chief Don Blankenship left in the wake of a mine disaster. BP (NYSE: BP) and Hewlett-Packard (NYSE: HPQ) dumped their chief executives despite the financial successes of their companies. Each had become a public relations liability.
There are several other chief executives who are likely to be fired in the next several months if boards remain active in policing of the success of their leaders. James McNerney of Boeing (NYSE: BA) may not be able to survive after a multi-year string of problems with the firm’s Dreamliner. There are regular calls for Microsoft (NASDAQ MSFT) CEO Steve Ballmer to leave after a decade of poor stock performance and little innovation. Dan Hesse of Sprint-Nextel (NYSE: S) has not been able to deliver the turnaround he promised. Nvidia’s CEO Jen-Hsun Huang has not effectively competed with Texas Instruments (NYSE: TXN), AMD (NYSE: AMD) and Intel (NASDAQ: INTC).
The new surge in earnings among American companies, helped by the recovery, makes the CEO weaklings easier to point out than when the economy was in a collapse. The CEO turnover trend may just be at its beginning.
Douglas A. McIntyre