CEO Daily Brief – Oct. 28, 2010
October 28 2010 by ChiefExecutive.net
Texas Continues to Create Jobs While California Loses Them
When the September state unemployment numbers were released last week, it was not a surprise to see that Texas actually created 4,000 jobs in September, while most states continued to lose jobs. Texas is seen by CEOs as a business-friendly state, and was ranked No. 1 on Chief Executive magazine’s most recent annual Best and Worst States for Business survey.
We also weren’t surprised to see that California, the state that CEOs rated the worst for business, continued to shed jobs and lost another 63,000 jobs in September. Other states CEOs perceived as bad for business in our survey continued to shed jobs too: New York (-37,600) , New Jersey (-20,200), Massachusetts (-20,200).
What surprises us is how politicians and government officials fail to see the connection. States that are pro-business and help entrepreneurs encourage investment and job creation, also record increased tax base and create a virtuous cycle. Similarly, states that are hostile to business and continue to increase taxes and impose stringent regulations are pursuing an unsustainable strategy: by discouraging CEOs and entrepreneurs from investing in their states, they will continue to face job losses and a shrinking tax base. Hopefully, an increasing number of state legislatures realize this and learn a few quick lessons from Texas. And hopefully Washington acknowledges this. For more insight on this issue, see the recent Wall Street Journal editorial.
AIG Names Miller to Serve as Interim CEO If Needed
Steve Miller, who was promoted to chairman of American International Group Inc. three months ago, will be interim chief executive officer of the bailed-out insurer if Robert Benmosche steps down while fighting cancer. Miller will take the post “in the event that Bob would become unwilling or unable to continue to effectively serve in his current role,” the New York-based insurer said yesterday in a statement. Miller, 68, would have the job "for as long as it takes to identify and select a long-term replacement." For more about AIG from Bloomberg, please click here.
CEO Succession – The Buffett Way
While having an immaculate CEO succession plan in place is one of the most important responsibilities for a corporate board and the CEO, it is rarely done in the public eye. But Warrant Buffet does CEO succession (and most things) differently.
Wall Street was abuzz this week when Buffett announced that his heir apparent to replace him as the manager of Berkshire Hathaway’s $100 billion stock portfolio would be Todd Combs. Who? – A 39 year old virtual unknown currently running Castle Point Management LLC, a relatively modest $400 million hedge fund with a good but stellar record. While his fund survived the 2008 market meltdown better than most managers (was down only 5 percent that year), his fund was up only 6 percent in 2009 and is down about 4 percent this year. While his fund is up 34.5 percent since he launched in November 2005 according to an investor, he appears to have a stronger focus on avoiding risks than finding home runs. While many sources will scrutinize the merits of this particular candidate, there are a few potential lessons from Buffett in how he approached his CEO succession plan:
- He publicly announced he was starting a succession plan
- He posted the position for applications
- While intelligence and hard work were necessary conditions, he appears to have chosen his heir apparent based on "fit" and his confidence that Combs would maintain the culture
Buffett wasn’t overly concerned with credentials: Combs is a graduate of Florida State not Harvard (although he did share a business alma mater with Buffett: Columbia).
For more from Fortune about Todd Combs, please click here.