Thursday, April 14, 2005

ABC News: Nestle CEO Faces Opposition on Added Title

Bucking the trend of breaking up the CEO and Chairman positions, Nestle is trying to "reward" the CEO with the dual titles.

ABC News: Nestle CEO Faces Opposition on Added Title: "The global food company says giving CEO Peter Brabeck a double mandate at the company's annual shareholder meeting Thursday is in the interest of its investors because it assures 'strategic continuity and long-term value."

Shareholders seem to be opposed to the idea:
"Five pension funds led by Ethos have proposed a vote at the shareholders' assembly to separate the two top jobs permanently."

Interestingly, Brickley, Coles, and Jarrell might agree with Nestle. Their paper "call[s] into question previous empirical work which suggests that firms with separate titles outperform firms with combined titles. We tentatively conclude that proponents of legislation to force separation of titles have overlooked important costs."

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