Incoming Caterpillar CEO to Be First Who Isn't Also Chairman Since 1990
17 Oktober 2016 - 9:22PM
Dow Jones News
By Andrew Tangel and Joann S. Lublin
Jim Umpleby will be the first Caterpillar Inc. chief executive
in a quarter-century to run the equipment-making giant without
control over the board as well, a big shift that mirrors U.S.
trends in corporate governance.
Caterpillar's next chairman will be Dave Calhoun, 59 years old,
a former chief executive of Nielsen Co. BV and current executive at
private-equity firm Blackstone Group L.P. Both top Caterpillar
roles are being vacated by Doug Oberhelman, who Caterpillar said on
Monday will step down as chief executive at the end of this year
and as chairman at the end of March.
A Caterpillar spokeswoman wouldn't say why the Peoria,
Ill.-based maker of construction and mining equipment decided to
split the roles for the first time since 1990. Some shareholders
have pressed the board to do so.
"You grade your own papers," said John Chevedden of California,
who said he owns 200 of the company's shares. "Why should you be
responsible to yourself?"
Mr. Chevedden's resolution urging Caterpillar to name an
independent director as chairman won 42.8% of the votes cast at
this year's annual meeting, according to a regulatory filing.
Caterpillar board members opposed splitting the top two roles,
the latest proxy statement said. A leader with both jobs "ensures
that the Company is represented by a single voice to dealers,
stockholders, employees and other stakeholders," the proxy
added.
On Monday the company changed course. Mr. Chevedden welcomed
Caterpillar's move to split the CEO and chairman roles, which Mr.
Chevedden said could provide a much-needed boost in morale amid a
record sales slump and job cuts.
Other big U.S. businesses have also split the two roles in
recent years. As of July 31, 49.7% of S&P 500 companies had
separate chairmen and chief executives -- up from 43.8% in 2012,
according to Equilar Inc., a consulting firm.
An increasing number of firms have also appointed an independent
director to run their boards. Among S&P 500 companies, 35.1%
have a nonexecutive chairman, Equilar reported, up from 27.7% in
2012.
Among the latest companies to make the move is Wells, Fargo
& Co. Last week, Chairman and CEO John Stumpf resigned amid a
sales-tactics scandal. Mr. Stumpf was succeeded by his
second-in-command as CEO. Stephen Sanger, the bank's lead
independent director, became Wells Fargo's chairman.
Mr. Calhoun's appointment as an outside chairman suggests
Caterpillar directors hope he will keep close tabs on 58-year-old
Mr. Umpleby's performance, one succession-planning expert
suggested. An independent board chairman has powerful influence
over a chief executive's pay and job security.
"They want faster change," and will expect Mr. Calhoun to
aggressively monitor Mr. Umpleby, predicted Jeffrey Cohn, managing
director of global CEO succession planning for recruiters DHR
International.
Compared with Mr. Oberhelman, Mr. Calhoun won't "be nearly as
patient with change and tough decisions," Mr. Cohn said. "He will
have a louder whip."
Bob Tita contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Joann S.
Lublin at joann.lublin@wsj.com
(END) Dow Jones Newswires
October 17, 2016 15:07 ET (19:07 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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