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The Morning Ledger: Companies Turn to Boards for Their Next CEO |
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General Electric's new Chief Executive Larry Culp. PHOTO: T. ROWE PRICE/ASSOCIATED PRESS
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Good day. Some companies in search of a new chief executive are opting for a board member, rather than choosing a candidate from internal ranks, The Wall Street Journal reports.
From director to CEO: General Electric Co.’s decision to oust John Flannery and replace him with Larry Culp — the former CEO of Danaher Corp. who joined GE’s board in April — is one of several examples in which a director took the helm, instead of a homegrown successor. Toy maker Mattel Inc. this year appointed board member Ynon Kreiz as its CEO. Manufacturer Dover Corp. chose Rich Tobin, also a former CEO, to succeed its chief of nine years. Mr. Tobin had joined the company’s board in 2016.
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Choosing from the board: The unusual trajectory works well for some companies because directors who become CEOs bring inside knowledge and established relationships with fellow board members, said James Citrin, head of the North American CEO practice for Spencer Stuart, an executive search and leadership advisory firm.
Choosing from within: However, it is more likely for a CEO to come from a company’s internal executive ranks than from its board. Between 2013 and 2017, internal candidates made up about 75% of CEO appointments at S&P 500 companies, according to Spencer Stuart.
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Airbus SE is poised to name the head of the plane making unit and effective No. 2, Guillaume Faury, as its next chief executive. Mr. Faury is set to replace Tom Enders, who in December said he wouldn’t seek a new mandate when his current term expires next year. The announcement could come as early as Monday.
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The U.S. Labor Department on Wednesday releases September producer-price index data. PPI, a measure of the prices businesses receive for their goods and services, declined a seasonally adjusted 0.1% in August from a month earlier. Economists surveyed by The Wall Street Journal forecast a 0.2% rise in PPI.
The U.S. Labor Department on Thursday publishes September’s consumer-price index. U.S. consumer prices rose for a fifth straight month in August, though the pace of annual increases eased for the first time this year. Economists surveyed by The Wall Street Journal expect consumer prices to have climbed 0.2% in September from a month earlier and 2.4% from a year earlier.
The U.S. Labor Department on Friday releases September import-price data. In August, prices for goods imported to the U.S. declined, driven by a drop in oil prices. Economists surveyed by The Wall Street Journal forecast import prices increased 0.2%.
Also on Friday, the University of Michigan publishes its preliminary October U.S. consumer sentiment index. Economists surveyed by The Wall Street Journal forecast consumer sentiment clocked in at 100.0 in October.
The third-quarter earnings season kicks off in earnest Friday, with JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and PNC Financial Services Group Inc. scheduled to post results.
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Two customers look at toys at Toy City in Rockaway, N.J. PHOTO: BRYAN ANSELM FOR THE WALL STREET JOURNAL
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The collapse of Toys “R” Us Inc. has its rivals fighting over billions of dollars in holiday toy sales now up for grabs. It is also likely to make it harder for last-minute shoppers to get their hands on some of the year’s hottest items.
Ford Motor Co. informed employees this week of a planned reorganization that will cut salaried jobs, part of Chief Executive Jim Hackett’s broader plan to slash costs as the auto maker seeks to improve profits and revive its stock price.
Elliott Management Corp., known for its brawls with CEOs and developing-world governments, is softening its image.
Target Corp. is expanding into a new territory: $1 toiletries. The Minneapolis-based retailer said it is planning to launch a new brand for consumer staples called Smartly with more than 70 products.
Amazon.com Inc. said it has terminated an employee responsible for an incident in which a third-party seller on the tech giant’s website got access to email addresses of some Amazon customers.
Teamsters members voted down a new contract with United Parcel Service Inc., but the union’s leadership said the turnout was too low to reject the contract. Both sides said they would return to the negotiating table ahead of the holiday season.
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A strong domestic economy and a rise in investor activism could herald an active market for mergers and acquisitions in the coming year, a new report indicates. Meanwhile, cross-sector suitors are raising the stakes.
Fifty-one percent of executives plan to pursue deals in the next 12 months, according to Ernst & Young LLP’s latest US Capital Confidence Barometer, which was released Monday. That’s up from 42% a year earlier, CFO Journal's Tatyana Shumsky writes.
The favorable conditions for M&A are driven in part by a growing field of cross-sector buyers, leading to more competition for target companies, said Bill Casey, EY Americas vice chair for transaction advisory services.
Potential buyers of a given business today include companies already in the industry, as well as private-equity firms and companies from other industries — particularly the technology sector — that are looking to diversify their business lines. “That’s pushing up deal prices,” Mr. Casey said.
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The U.K. regulator for reporting, audit and accounting has launched a strategic review of audit quality in Britain, the Financial Reporting Council said Monday. The FRC will test existing rules on auditor independence, determine whether additional action needs to be taken to ensure auditor independence and consider banning auditors from doing consulting work for bodies they audit, the watchdog said in a statement.
The FRC has expanded its enforcement capacity so it can conclude cases more quickly and revised its sanctions framework, it said. “This comprehensive reform program addresses fundamental issues underlying falling trust in business and the effectiveness of audit, whilst also looking to ensure that the requirements on what companies say about themselves are fit for the future needs of stakeholders,” Stephen Hadrill, chief executive of the FRC, said in a statement.
The move comes after representatives of the U.K. Labor Party in September demanded that the “Big Four” accountancy firms be broken up after the high-profile collapse of construction and outsourcing giant Carillion PLC earlier in the year.
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JPMorgan Chase’s settlement relates to transactions made between January 2008 and February 2012. PHOTO: CHRISTOPHER DILTS/BLOOMBERG NEWS
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JPMorgan Chase Bank NA agreed to pay $5.3 million to settle allegations it violated various U.S. sanctions programs.
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Juul Labs Inc. has hired a former White House adviser to join its leadership team, one of several ex-federal officials or regulators added by the e-cigarette startup this year as it tries to head off a government crackdown on its products.
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A new battle for cellular airwaves is under way as governments around the world start to auction off spectrum for mobile coverage that could power near-instant video downloads and help run factories, control gadgets and navigate driverless cars.
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The latest reduction to banks’ reserve-requirement ratio marks the fourth such adjustment by the People’s Bank of China this year. PHOTO: JASON LEE/REUTERS
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China’s central bank is freeing up nearly $175 billion to get commercial banks to boost their lending and pay off short-term borrowings, the latest effort by Beijing to lift growth in a slowing economy as its trade fight with the U.S. escalates.
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Private-equity firms are on track to raise a record amount for infrastructure investing in 2018, as money managers bet on the growing need to upgrade and expand the world’s railroads, natural-gas pipelines and data centers.
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Daimler AG, the Stuttgart, Germany-based auto maker, said Chief Financial Officer Bodo Uebber will step down from his role at the end of his current contract in December 2019.
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Mr. Uebber has been a member of Daimler’s board of management since December 2003 and became responsible for the company's finances in 2004. Daimler Chief Executive Dieter Zetsche in September announced his plan to depart from the company at the end of 2019.
Cal-Maine Foods Inc., a Jackson, Miss.-based fresh shell egg producer, named Max P. Bowman as vice president and chief financial officer, effective October 5. Mr. Bowman will replace Tim Dawson who retired on October 5. Compensation details were not immediately available.
Newell Brands Inc., a Hoboken, N.J.-based consumer goods company, said Chief Accounting Officer Jim Cunningham plans to leave the firm in 2019, according to an SEC filing. After serving more than two years in the role, Cunningham has agreed to leave the owner of Yankee Candle and Sharpie on March 1. Newell has already seen its president and chief development officer exit their posts this year and its finance chief will leave at year’s end.
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