CEO Shuffle: Three Major Corporate Chiefs Are Stepping Down
Announcements made late Wednesday and early Thursday revealed that three large companies -- Wendy's (WEN), Costco (COST), and Bank of New York Mellon (BK) -- are losing their CEOs.
Roland Smith, who became CEO of Wendy's/Arby's Group in 2008, will retire and be replaced by Emil Brolick, a former executive who worked at the chain for 12 years, ending in 2000. In addition to serving as senior vice president of new product marketing and strategic planning at Wendy's, Brolick was recently chief operating officer of Yum! Brands (YUM). He will become CEO on Sept. 12, and take a seat on the board of directors. Smith will keep his seat on the board and serve as an adviser until the end of the year.
Smith, who is 57 and lives in Atlanta, is stepping down rather than relocate to Wendy's headquarters in Dublin, Ohio, a suburb of Columbus, according to The Wall Street Journal. His time at the helm of Wendy's is viewed favorably: When he took over, margins were low, sales were declining, and marketing was focused on a narrow range of 18- to 24-year-olds. Now, the company has a renewed focus on older customers, a more robust international presence, and an overhauled menu. Same-store sales were up 2.3% in the second quarter.
Brolick, 63, is credited with improving sales and profits at Taco Bell. At Wendy's, he was a close collaborator with founder Dave Thomas. "The chain had a long run of sales and profit growth during his tenure," the Journal reports.
Holding the Course at Costco
Costco CEO and co-founder Jim Sinegal -- one of the country's best-liked chief executives -- will step down Jan. 1, to be succeeded by current president and COO Craig Jelinek, a 28-year-veteran of the company.
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Sinegal, 76, co-founded Costco Wholesale in 1983 and became CEO five years later, building the company into the nation's third-largest retailer, and its biggest warehouse club chain. Sinegal is well-known for not laying off any workers during the recent recession, as well as refusing to cut back on employee benefits, despite complaints from Wall Street analysts. He has kept prices low, insisting on a maximum markup of 14% on branded items. And his compensation has also been notably reasonable by CEO standards, totaling $2,734,276 in 2009. At the same time, Sinegal has made Costco into an extraordinarily successful capitalist enterprise, with astounding customer retention rates and impressive returns on investment.
Jelinek, who started as a warehouse manager, has long worked alongside Sinegal, and his ascension to the top spot comes as no surprise. Industry watchers expect a high level of continuity. "Not a lot's going to change," Jelinek himself told The Seattle Times. Sinegal, who plans to seek re-election to Costco's board, will be staying on as an adviser through January 2013.
A Shocker at BNY Mellon
In a management shake-up that isbeing characterized as a surprise, BNY Mellon announced the ouster of CEO Robert Kelly, and his replacement by 30-year veteran and current president Gerald Hassell. In a statement, the bank said only that Kelly stepped down by "mutual agreement" with the board of directors, because of "differences in approach to managing the company."
"We've got some management issues," an insider told the Financial Times. "This is not a precipitous thing. It was over a period of time. We thought we had to make a change. We've got a good guy in Gerald."
Kelly had been with BNY Mellon since 2006 and was considered a top contender to lead a larger financial institution, such as Bank of America (BAC). But recent months have not been kind to his company, bringing bad news on several fronts: BNY Mellon faces litigation relating to currency trading, announced 1,500 layoffs in an effort to cut costs, and risked alienating wealthy clients by announcing fees on large deposits. According to Forbes, the board probably sees Hassell as less likely to push for drastic changes.
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