CEO Daily Brief – Jan. 11, 2011
CEO of AMD Suddenly Leaves His Post CEO Dirk Meyer has resigned from his position at Advanced Micro Devices, with [...]
January 11 2011 by ChiefExecutive.net
CEO of AMD Suddenly Leaves His Post
CEO Dirk Meyer has resigned from his position at Advanced Micro Devices, with The New York Times reporting that he was “pushed out.” The move comes just when the company seemed to be making progress in a turnaround, according to a report from The Wall Street Journal. There was not a clear reason for Meyer’s exit, with the company calling Meyer’s exit a “mutual agreement” with the Board of Directors.
In a company statement, AMD Chairman Bruce Claflin said that “Dirk became CEO during difficult times. He successfully stabilized AMD while simultaneously concluding strategic initiatives. … However, the Board believes we have the opportunity to create increased shareholder value over time. This will require the company to have significant growth, establish market leadership and generate superior financial returns. We believe a change in leadership at this time will accelerate the company’s ability to accomplish these objectives.”
The Times reported that the move was puzzling, with the suggestion that Meyer was not creating revenue quickly enough. Stacy Rasgon, an analyst at Bernstein Research, told The Times, “The timing is extremely odd, and it’s only going to fuel uncertainty in the stock.”
Unless there is more to the story, the suddenness of the departure as well as its unclear underlying reasons raises questions. Why was the CEO selected as the victim? The company is predicting that revenue for the fourth quarter will be about $1.65 billion.
For more information about Dirk Meyer’s departure, as reported by The New York Times, please click here.
Goldman Sachs Improves Transparency
Faced with criticism that it is putting its self-interest ahead of its clients’, Goldman Sachs is becoming more transparent and is expected to release details about its operations in a public report.
For the first time, Goldman Sachs will detail “how much revenue comes from the firm’s own trading and investing,” The Wall Street Journal reports. The company has been facing pressure from the Securities and Exchange Commission.
The intensity of the response by outside skeptics was caused in part by Goldman Sachs being more successful in the financial downturn than its rival banks, The Journal reports. Some critics of the company wanted far-reaching changes in its operations – which do not appear to be part of the new company report. Critics also want Goldman Sachs Chairman and CEO Lloyd C. Blankfein to quit or at least leave the post as chairman. It appears he remains popular with the company’s wealthy customers and its clients. As the U.S. economy continues to rebound, overzealous regulation may be one of the last things the government should be doing. Companies like Goldman Sachs most likely hold the key to economic recovery and job creation. If Blankfein was able to weather the economic storm better than others, forcing him out seems ridiculous. Rivals need to find out his strategy.
For more about Goldman Sachs, as reported by The Wall Street Journal, please click here.
Effective Management, Not Bonuses, Are Top Reason for Retaining Employees: MBA Students Say
Bonuses are important for the retention of employees, but the lack of effective management is the number one cause of employees quitting their jobs, according to essays written by MBA students at the University of Pennsylvania’s Wharton School based on their past job experience.
Bloomberg Businessweek reported that many of the students relayed how “companies use bonuses as a cover for lack of management within the organization.”
Wharton Professor Peter Cappelli said that employees obviously do want bonuses. “But bonuses (alone) are not doing the trick. It’s not true that people only care about the bonus and leadership doesn’t matter,” he told Bloomberg Businessweek based on the student responses.
Based on the student observations, Cappelli recommends that investment banking companies and other industries give employees feedback and evaluations, and improve the way they give bonuses to their employees.
It is clear from these responses that money is important but it is not the only way that organizations can reward employees. Working for a well-managed company, is a reward in itself. It can also help build organizational loyalty and gives employees a clearer sense of purpose. CEOs should follow the student suggestions that effective leadership is an important tool for employee retention, particularly as the economy is still recovering. Large bonuses may not be available to employees, even if higher management thinks they are justified.
For more about the importance of effective management, as reported by Bloomberg Businessweek, please click here.