Who's on deck in tech?
Apple's Steve Jobs isn't the only chief executive without a publicly announced plan for passing the torch. Surprisingly few technology CEOs have declared heirs.
(Fortune Magazine) -- Last year when Apple CEO Steve Jobs showed visible signs of illness at public speaking events, the company's stock began to gyrate unpredictably. When Jobs unexpectedly spoke on the company's fourth-quarter earnings call, the stock rose 12% in part because he simply showed up. When he canceled his MacWorld appearance, Apple shares plunged 7%. Investors worried that Jobs might step down. Could anyone replace him?
Apple (AAPL, Fortune 500) has never announced a succession plan publicly, although chief operating officer Tim Cook is running Apple while Jobs is on medical leave. And like Apple, most tech companies remain mum on the subject of CEO succession.
Few of the biggest names in tech, from Cisco to IBM to Oracle, have clear-cut heirs to their CEOs; most don't even have publicly designated second-in-command executives who would be ready to take over should their chiefs fall ill or resign unexpectedly. Indeed, none of the big tech companies we contacted would comment for this story.
Executive recruiters say Silicon Valley companies have always been more nonchalant about passing the torch than, say, banks or manufacturers because they tend to be younger companies, often helmed by their charismatic founders. But it isn't unprecedented for a tech entrepreneur to have a strong wingman: Microsoft's (MSFT, Fortune 500) Bill Gates tapped Steve Ballmer as his No. 2 long before stepping down as CEO in 2000. (In some cases the founders may end up as future CEOs: Google (GOOG, Fortune 500) co-creator Sergey Brin could be a contender to run the company when current chief Eric Schmidt steps down.)
Sure, founders generally have a hard time letting go even when their departures are expected. Dell (DELL, Fortune 500) founder Michael Dell handpicked Kevin Rollins, president and chief operating officer, as his successor in 2004, only to replace him when the company lost its lead in PC market share to rival Hewlett-Packard. Today Dell has no president or operating chief, and analysts believe the board may look to an outsider to run things if sales continue to lag.
The founder factor may explain why Oracle's 64-year-old creator and CEO, Larry Ellison, has been reluctant to announce a successor. (In fact, Oracle (ORCL, Fortune 500) has two presidents, Safra Catz and Charles Phillips, who could step into the top job if Ellison unexpectedly retired.) But what's Sam Palmisano's excuse? Who is John Chambers' No. 2? IBM (IBM, Fortune 500) is known as a training ground for future CEOs, yet Palmisano, who took over in 2003, doesn't have a main lieutenant. Cisco (CSCO, Fortune 500), which Chambers runs, has over the years bid farewell to a few executives who were considered successors, including Joost CEO Mike Volpi. But none of the company's five executive vice presidents jump out as Chambers' successor.
Of course, just because those CEOs haven't named successors doesn't mean they're not planning for the future. And while corporate governance experts urge companies to be transparent about their executive succession plans, a CEO may have one very good reason for declining to name his replacement. (No, not ego, though that's clearly a factor.) Once a company designates an heir, all the talented executives who were eyeing the CEO-in-waiting title might simply leave.