The New Bosses
These 12 men--and 2 women--all managed to grab the brass ring in 2002, when they were recruited or elevated to the top spot in their businesses. Now, though, they'll have to make sure the big prize doesn't end up being just a big pain. Yes, a few of these rookies took over stable, profitable companies. But most will be wrestling with the same tough issues that laid their predecessors low: collapsing markets, government probes, front-page scandals, even bankruptcy.
Pulling a company out of such a morass can pay well. The new CEO of scandal-plagued Tyco International Ltd. (TYCO ), EDWARD D. BREEN, gave up a promising career at Motorola Inc.--where he was president and chief operating officer--to save what's left of the disgraced L. Dennis Kozlowski's debt-laden conglomerate. If he pulls it off, he stands to make $50 million, including options. Likewise for MICHAEL D. CAPELLAS, who merged his faltering Compaq Computer Corp. with Hewlett-Packard Co. (HPQ ) before leaving to head up WorldCom Inc. If he revives the bankrupt telecom, he could earn up to $29 million.
Some new CEOs may not have much time to mull over their pay packages. They'll be too busy trying to cut deals with government watchdogs. RICHARD C. NOTEBAERT, the former Ameritech Corp. (SBC ) chief who replaced Joseph P. Nacchio as CEO at Qwest Communications International Inc. (Q ), is expected to work out an agreement with the Securities & Exchange Commission, which is looking into Qwest's accounting. At Kmart Corp. (KM ), JAMES B. ADAMSON, who ascended to the corner office from the failed retailer's board, has to contend with probes of company finances from both the SEC and the FBI. And AOL Time Warner Inc.'s (AOL ) new CEO, RICHARD D. PARSONS, has to contend with SEC and Justice Dept. investigators checking out the books of his floundering AOL unit.
Salomon Smith Barney, the brokerage arm of Citigroup Inc. (C ), came under fire in 2002 from New York's aggressive attorney general, Eliot Spitzer. So Citi boss Sanford I. Weill lured SALLIE L. KRAWCHECK, former CEO of research outfit Sanford C. Bernstein & Co., to run Smith Barney and restore its credibility: its analysts had pushed dud stocks to win investment-banking business.
Several of this year's newbies will be consumed with answering one question: What do you do when good markets go bad? Fighting the tech slump at IBM (IBM ) is SAMUEL J. PALMISANO. Already CEO, he now takes on the chairman title from the retiring Louis V. Gerstner Jr. He'll continue to push IBM's array of services to its corporate clients. Meanwhile, after a stint as president at Eastman Kodak Co. (EK ), PATRICIA F. RUSSO was lured back to Lucent Technologies Inc. (LU ) as CEO. She pledged to put the ailing telecom-gear maker in the black by September--and is in the process of cutting 12,000 more jobs.
In fact, many of the new CEOs came in wielding axes. JEAN-RENE FOURTOU at Vivendi Universal has sold whole divisions to shore up the finances of the media colossus that predecessor Jean-Marie Messier built. And while the new CEO at Honeywell International Inc. (HON ), DAVID M. COTE--who toiled in the General Electric Co. (GE ) vineyards for 25 years and then briefly ran TRW Inc.--has effectively cut costs, he may need to take more radical steps and unload some struggling businesses.
In consumer goods, PAUL S. PRESSLER decamped from Walt Disney Co. (DIS ), where he ran its theme parks and resorts, to head Gap Inc. (GPS ) and boost its shrinking market share. He is expected to cut costs by slashing the number of Gap stores in 2003. And LOUIS C. CAMILLERI, the new No. 1 at Philip Morris Cos. (MO ), has to reverse a recent and alarming slide in U.S. sales of its flagship Marlboro cigarettes.
For a lucky few, the future is comparatively bright. Young marketing whiz AUGUST A. BUSCH IV, 38, landed the top job at Anheuser-Busch's (BUD ) domestic brewing unit. He may have to battle critics who want to ban TV beer ads--but he also has the No. 1 brew in the land: Bud Light. Johnson & Johnson (JNJ ) lifer WILLIAM C. WELDON, who copped the top spot at the medical company, will probably seek out acquisitions to keep J&J growing. But he'll have help from the company labs, too. In 2003, J&J is set to begin sales of a likely blockbuster device that prevents arteries from reclogging after angioplasty.
That's good for him. Now, if only there were some nifty new devices that could save his peers from the business woes they will have to deal with in the coming year.