If Apple Were To Initiate A CEO Search, Who Are Your Nominations?
Scott is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Reed Hastings spent a few months in the proverbial dog house after separating Netflix’s (NASDAQ: NFLX) DVD by mail business from the streaming segment to be renamed “Qwikster.” Up to that point Hastings enjoyed a practically flawless reputation as a visionary genius. He quickly responded to the backlash and made some modifications. After Netflix's January earnings surprise and announcement of 2 million new subscribers, it looks as though Hastings has adroitly polished off his lightly tarnished reputation.
Since Carl Icahn acquired an approximately 10% stake in Netflix, rumors were swirling about who might be a potential suitor for Netflix, driving the stock price higher. Hastings and Netflix adopted a “poison pill” to prevent a hostile takeover of Netflix without the Board’s approval, so it was clear that Hastings had no plans to participate in a “shotgun wedding.”
Given Apple’s (NASDAQ: AAPL) present ferments, a search for a new CEO being announced is not unthinkable. But that would leave us pondering the question of who could do any better at replacing the late, great legend Steve Jobs?
Most recognize that computer geeks or engineers often lack business acumen and are often not regarded as “visionaries.” Jobs, who started out his career designing video games at Atari, was of a rare ilk that encapsulate both talents. Despite his genius and leadership skills, his biography demonstrates that he had failures and made mistakes along the way. The part of his career when he was forced to resign from the company he co-founded (Apple of course) and the details of the floundering company he started after Apple (Next Inc.) all but faded away since his grand slam with Pixar Animation and his triumphal re-entry to Apple in 1997.
How many executives are out there who share any similar characteristics as a potential Jobs-like visionary?
Netflix CEO Reed Hastings began his career as a software engineer, and also embodies visionary and leadership skills. Like Jobs, he worked for other software companies and went on to found his own company called Pure Software. Pure Software was taken public by Morgan Stanley and later acquired. Like Jobs, Hastings learned from his experience and went on to later revolutionize an industry.
Since Steve Jobs revolutionized the way we communicate, Netflix is soon to become one of the leading applications used on his iPhones and iPads thanks to streaming video, pioneered by Mr. Hastings.
Not only does Hastings (5 years younger than the late Steve Jobs) have the kind of vision and experience that Apple could use to guide their technology in the early 21st century, he heads a company that is within the grasp of Apple’s $130 billion cash war chest, as Netflix is currently trading at about a $9 billion market cap. Considering how difficult it would be to find a visionary software engineer and what they would have to compensate him or her, they would be buying a CEO who could work for $1 dollar a year with the compensation heavily tied to stock price.
As I ended my recent column Why Netflix Will Continue To Dominate & Confound Bears, “Hastings knows what he's sitting on; however, Apple could use a visionary CEO who is also an accomplished Software Engineer at this point. It could realistically become tempting to Apple.”
I do not know of a CEO search being called for at Apple, but if they have another underwhelming quarter anything could happen. For a man of Hastings’ background in technology, one might suspect that the job of Apple CEO might be a tempting opportunity to steer the industry in a more wide-reaching way. There has been a great deal of grumbling as of late regarding Apple’s lack of innovation.
It would be interesting to see Hastings on the stage introducing future generations of computer technology.
Thurston3 has no position in any stocks mentioned. The Motley Fool recommends Apple and Netflix. The Motley Fool owns shares of Apple and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!