CEO's Who Need to Leave: Amazon.com's Jeff Bezos, BUT Only a Title Change

Amazon.com (AMZN) would do better if Bezos dropped only one of his two titles: CEO & President.  He can stay one and can stay as Chairman.  Think about it.

Shareholder groups are becoming more activist and this trend will continue in 2007.  Private Equity and LBO Groups can only acquire so many companies, and there are only so many candidates that can run behemoths.  The best way to see change is right at the top in many cases and there is a slew of US public companies that would do far better if they could replace current management.  These aren’t in any ranked order, so the first isn’t the worst and the last isn’t the best of the worst.  The problem in stating this is that it is very easy to come in and criticize, yet finding replacements for companies this size is not exactly an easy feat.  Private Equity as a sector has taken all the talented guys, and they haven’t stopped with the age limits that many public companies live by.  There just aren’t too many Lou Gerstner and Jack Welch carbon copies out there.

Amazon.com (AMZN) stock would likely rise just by announcing a partial change of figureheads.  Here is the best thing: All Jeff Bezos has to do is simply split his CEO and President role.  He can stay Chairman of the Board.  He is the founder and has a Wall Street background, but now the company needs some help.  The company knows the earnings and analyst game because he taught them and only hired executives that understand Wall Street.  Their investor and media relations departments monitor research calls, monitor stock commentary, and should understand this.  Maybe no one wants to point this out, so why not us…. 

There are too many reports and too much gossip that Bezos wants to launch spaceships from West Texas more than he wants to run Amazon.com.  The company truly transformed e-commerce and transformed online shopping in a few sectors.  If you had to think of how large the warehouses would be to store all the vendor products they sell you would be looking at a large chunk of Manhattan.  Amazon warehouses some of its books, CD’s and DVD’s, but in a sense it is now just a master clearing house and order taker for just about everything else.  A new CEO or President could get the shipping centers fixed, could identify the markets it should stop clearing orders for, and could identify new avenues. 

This might give the company its "mojo" back if it had some new blood.  The company has a great board of directors.  I like Bezos as a CEO personality, and I like Amazon.com.  But after looking at these "CEO’s who could go," Bezos should drop the CEO position and just remain as the Chairman and President (or drop the President title and let someone have the new CEO title).  This would actually help the company.  Bezos has done what many thought he couldn’t: He turned Amazon.com into a consistently profitable business quarter after quarter on a GAAP and on a cash flow basis.  Now he could use some help to take it from here.  Bezos doesn’t have to leave, he just has to bring in some serious help in what the street thinks is the helm.  He won’t even have to give up control in order to implement this.

Amazon.com is up 35% from lows over the summer.  This suggestion doesn’t mean Bezos is bad or that he needs to disappear.  He could just use a more active face next to him for implementations from here.  AMZN is still down roughly 20% from its 52-week highs.  If this is being taken as an ultimate slap to a founding CEO who has been Time’s man of the year, then you didn’t read the advisory article here. 

Jon C. Ogg
December 18, 2006