Grief in the Corner Office
Prince, C. J., Chief Executive (U.S.)
Every year, several of industry's top executives die unexpectedly. Here's how their companies cope.
Harry Pearce had a bad feeling when his doctor called him out of a senior management meeting at General Motors and asked him to meet her to discuss follow-up tests to a routine physical. He hurried to the hospital. "When I saw her coming down the hall toward me, I knew something was terribly wrong," Pearce recalls.
The then 55-year-old vice chairman of GM-expected to succeed Jack Smith as CEO when he retired-was experiencing no health problems, no aggravating symptoms; he had no evidence that anything was amiss. But on that otherwise ordinary day in April of 1998, Pearce heard the words: "You have leukemia." In a state of complete shock, he rose from his chair-and fainted.
The next thing he remembered was a flurry of activity as the doctor and several nurses sought to revive him. "I guess my body just shut down," says Pearce, now chairman of Hughes Electronics, a GM subsidiary. "Talk about being hit between the eyes."
Pearce's story had a happy ending. He recovered with the help of a stem-cell bone marrow transplant from his brother. But his brush with death was all too real, bringing him closer to the brink than he'd ever imagined.
Certainly Pearce isn't the first to have been thrown by such a sobering reality. The concept of debilitating illness contradicts the image of the proud, invincible CEO. No more or less tragic than the loss of any human life, the passing of a CEO is nevertheless uniquely charged, given the enormous impact he or she has on the health of companies and the welfare of employees.
The Coca-Cola Co. has yet to recover from the death of its revered CEO, Roberto Goizueta, who lost a brief battle with lung cancer in 1996. The market was forgiving at the time because Goizueta had long been grooming Doug Ivester to take over. But Ivester failed to live up to expectations and was gone after two tumultuous years. Current CEO Douglas Daft continues to struggle with layoffs, management turnover, and a slumping stock price.
Texas Instruments' Thomas Engibous, who took the helm when CEO Jerry Junkins died suddenly of a heart attack in May 1996, has fared better, but more than a few skeptics challenged his abilities, and the rocky transition translated into trying times for TI.
Goizueta and Junkins were just two of at least 20 CEOs of significant companies who have died unexpectedly of cancer, heart attacks, or fatal accidents in the past five years, leaving their companies grieving and their boards, too often, stumbling for successors. More than any other catastrophic event that will occur in the life of a company, the death of the CEO is the one least planned for.
Even for those whose craft it is to manage and anticipate risk, sudden death is a tough one to plan for. Yet unexpected events are apt to happen in the lives of busy executives, who travel more, work harder, and sleep less. Job stress has never been higher. Market cycles are shorter and chief executives are allowed far less time to prove themselves before they're shown the door. It's no wonder that, in the past year alone, at least 15 companies reported their CEOs had suffered heart attacks. Eight of those were fatal.
The high level of risk has led boards to take a much keener interest in CEOs' personal health. Once upon a carefree time, company leaders could indulge in cigars and brandy as often as they liked-so long as the company's numbers hit their mark. Not any longer. "There has been a general decline in practices by CEOs that are abusive to their health," observes Dennis Carey, vice chairman of global executive search firm Spencer Stuart, and author of CEO Succession. Peter Crist, vice chairman of global executive recruitment firm Korn/Ferry International, adds, "The days of walking into a CEO's office and seeing him or her eating Twinkies and drinking a Pepsi are probably gone. …