As Apple Inc. AAPL CEO Tim Cook approaches a potential retirement, the company might be in a pickle to find his replacement. The situation is complicated because of the absence of an individual who is both readily available and likely to serve as a long-term successor, according to Bloomberg columnist Mark Gurman.
What Happened: Cook’s tenure exceeded that of the typical Fortune 500 CEO, and, at 63, he surpasses the age of many of his counterparts. According to Toni Sacconaghi, a Sanford C Bernstein analyst with two decades of experience covering Apple, succession has become a concern among investors, reported Bloomberg.
“You look down the list of executives, and it's really not clear how this all pans out,” he said, adding, “You wonder why there hasn't been more transparency and exposure for the next leaders. It raises a broader question: Does Apple have a comprehensive and deliberate set of succession plans?”
Candidate I: Jeff Williams
According to several people familiar with Apple’s internal dynamics, if Cook were to step down soon, Chief Operating Officer Jeff Williams would likely assume his position.
What’s The Challenge: However, Williams, who is 61 years old this year, is just two years younger than Cook. According to insiders, it’s now considered improbable that he will be the new long-term CEO. Apple’s board would likely prefer an executive who, akin to Cook and Jobs, would commit to the role for at least a decade.
Candidate II: John Ternus
Cook hasn’t provided any clear timeline for his tenure. However, those close to him speculate that he will continue as CEO for at least another three years. Should Cook remain in his position for that duration, company insiders at Apple suggest that the most probable successor would be John Ternus, the head of hardware engineering. Ternus, who's not yet 50, is well-liked at Apple. He is respected by Cook, Williams, and other leaders.
What’s The Challenge: According to the report, some people characterize him as a political figure lacking the respect of a few top engineers. Critics also note his peripheral involvement in major product developments, such as later iterations of the Apple Watch. Most notably, Ternus played a minor role in two of Apple’s recent ambitious projects: the Vision Pro headset and the development of a self-driving car, although the latter has now come to an abrupt end.
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Additional names that surface in discussions include:
Craig Federighi, the head of software engineering, and Deirdre O’Brien, Apple’s head of retail and a trusted confidant of Cook. However, individuals with insights into the company view them as improbable successors.
Why It Matters: According to the report, there’s no basis to presume that a leadership transition is imminent. While Cook may be older than the CEOs of other tech companies leading the S&P 500, he is far from being the oldest executive at the helm of a major corporation.
Meanwhile, Apple’s second-quarter earnings beat muted forecasts, with the company announcing a $110 billion stock buyback program and a one-penny-per-share increase in its quarterly dividend.
“Today Apple is reporting revenue of $90.8 billion for the March quarter, including an all-time revenue record in Services,” Cook said in a statement earlier this month.
Photo via Shutterstock/ photovanessacarvalho
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