CEO Daily: The executive chair curse strikes again

From: Alan Murray - Thursday Mar 14,2024 10:31 am

Presented by Deloitte

March 14, 2024

Good morning.

Under Armour announced yesterday that CEO Stephanie Linnartz is stepping down after just one year in the job and being replaced by—guess who?—founder Kevin Plank, who was her predecessor and had stayed on as executive chairman. I can’t speak to who is better equipped to lead the brand. But I can, once again, say this: companies need one CEO at a time.

It was only last September that Rosalind Brewer stepped down as CEO of Walgreens, where her predecessor Stefano Pessina had remained as executive chairman. I’m sure both Brewer and Linnartz went into their jobs confident they had skills to handle the substantial egos of their respective bosses. I’ll leave the gender analysis to others, but regardless of gender, human nature is what it is. Any ex-CEO is going to feel the instinct to protect his or her legacy. And any new CEO is going to see things that he or she wants to change. When the two collide, who gets to make the call?

Worth remembering Linnartz was available for hire because the Marriott board decided it didn’t want co-CEOs. The late Arnie Sorenson installed Linnartz and Anthony Capuano as acting co-chiefs when he was sidelined by cancer. But after Sorenson died, Capuano was given the top job, and Linnartz made president. No one was shocked when she left.

The story is complicated by the fact that Bill Marriott stayed on as executive chairman of Marriott for a decade after Sorenson became CEO. And that clearly didn’t stop Sorenson—the first CEO who wasn’t a member of the Marriott family—from taking control of the company and leading it to new heights. But the exceptions don’t negate the rule. Keeping a prior CEO around as executive chairman for more than a very brief transition is a bad idea. Let’s hope Linnartz, who has always struck me as a very savvy executive, finally gets a chance to run her own show.

Other news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

Jeff Zucker loses his Telegraph bid

U.K. lawmakers will advance a new law to ban foreign states from owning British newspapers, killing a bid by former CNN president Jeff Zucker and his investment partners in the UAE from buying the Telegraph. RedBird IMI, an investment vehicle for UAE Deputy Prime Minister Sheikh Mansour bin Zayed Al Nahyan, offered to pay off $1.5 billion in debts held by the newspaper’s previous owners in exchange for control. On Wednesday, RedBird said it was "extremely disappointed” by London’s move, but was committed to investing in global media. BBC

Biden to express concern over Nippon Steel

The Biden administration plans to express serious concern over Nippon Steel’s $14.9 billion acquisition of U.S. Steel, according to people familiar with the decision. Biden will say the deal deserves scrutiny but will stop short of saying it should be blocked. The White House’s opposition to the deal could overshadow a coming state visit by Japanese Prime Minister Fumio Kishida in early April. The Financial Times

What’s in Europe’s new AI Act?

The European Parliament overwhelmingly approved the EU’s new AI Act, which will go into effect starting at the end of the year following approval from member states. Among its many provisions, the Act allows officials to deem powerful general purpose AI models, such as OpenAI’s GPT-4 and Google’s Gemini, as systemic risks, forcing developers to conduct heavy testing and implement strict security protections. The AI Act was born from a long legislative process marked by intense lobbying from tech companies and their national governments. Fortune

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This edition of CEO Daily was curated by Nicholas Gordon.

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