Power Sheet - August 5, 2015

One of the most important things leaders do—some say the most important—is choose other leaders. Their mediocre batting average shows how tough it is.

Yesterday, Travelers seemed to do it well, announcing that Alan Schnitzer will succeed CEO Jay Fishman in December. Fishman emailed employees that he has “a variant” of amyotrophic lateral sclerosis—Lou Gehrig’s Disease—and while it’s progressing slowly, he felt it was time to hand over the job. In this case, he and the board had plenty of time to choose a successor; he announced his condition last November. Schnitzer had been running Travelers’ biggest unit, and Wall Street approved the choice; the stock rose slightly on the announcement.

Other news yesterday calls to mind two crucial successions, the previous one and the coming one at Disney. The company reported knockout earnings once again (though slightly below Wall Street’s high expectations), the latest reminder of what an extraordinary CEO Robert Iger has turned out to be. Many were skeptical or flatly dismissive when he succeeded Michael Eisner in 2005. Now, the board presumably hopes he’ll hang around until the Singularity so his consciousness can be uploaded to a computer. That’s unlikely, however, and he and the board will face one of their highest-stakes decisions when his contract is up in 2018 and, at age 67, he’ll likely step down.

PayPal, newly separated from eBay, announced yesterday it was going outside—way outside—for a successor to CFO Patrick Dupuis; the new CFO is John Rainey of United Continental Holdings, which runs United Airlines; he’s 44 and looks much younger. Maybe CEO Dan Schulman was inspired to look beyond his industry by the recent experience of Google, which long had one of Silicon Valley’s most esteemed CFOs, Patrick Pichette. When he decided to step down last spring, CEO Larry Page lured Morgan Stanley CFO Ruth Porat to the other coast with a $70 million pay package. Wall Street seems to love her, and even USA Today, not notably a fan of mega-paid executives, headlined last month “Google’s $70 million CFO looks like a bargain.”

In an economy where human capital is the most valuable asset at virtually every company, choosing successors at all levels is increasingly important. It’s a competency every leader must build and strengthen.

One other succession we’ll be tracking: the big one in the White House that’s 15 long months away. Who’ll be most leader-like in the 10-man Republican steel cage match tomorrow night? Check in here for our and others’ assessments.

What We're Reading Today

Netflix announces unlimited maternity, paternity leave

It's a shocking declaration, not just for the length of time in which employees can take off to care for a newborn, but because it also includes fathers. Still, there could be some unforeseen pitfalls. Fortune

And the candidates at the first Republican debate will include...

Few surprises. Donald Trump, Jeb Bush, and Scott Walker were locks. Chris Christie just made it, while former Texas Governor Rick Perry was the first one on the outside looking in. NYT

House to vote on legislation against the Iran deal

The resolution seems to have enough support, but it won't be voted on until Congress returns to session in September. President Barack Obama will take to the airwaves today to argue for the deal and will likely veto any such resolution. But much of the handwringing is actually about the 2016 elections. Slate

Microsoft lists new goals

And there are only three of them: Reinvent, build, and create. Fortune

SEC to approve pay-gap disclosure

The new rule, which the agency is expected to vote on today, will force companies to show the difference in pay between their CEO and their median employee. MarketWatch

Disney disappoints investors

In spite of increasing revenues 5%, Disney shares dropped due to a slight miss in growth. But concerns remain as changing consumer tastes in cable television has reduced ESPN's impact while blockbuster movies—like The Avengers—drove the results. NYT

Behaving Badly

New York lawmakers tap election funds for legal fees

State legislators have used $1.9 million in campaign funds for court costs since mid-January, as a recent uptick in arrests has encouraged the looting. NYT

Emails Suggest UBS was warned about Puerto Rico lending practices

A UBS branch manager in Puerto Rico warned bank officials that brokers were pushing improper loan practices. Reuters

Judge nixes AmEx settlement with merchants

On the same day that Visa and Mastercard lost appeals in class action lawsuits over ATM fees, moving the cases back to court, American Express had its $79 million settlement in a class action lawsuit with merchants overturned. WSJ

Building a Better Leader

Millennials say they want to empower others with their leadership

But they don't know how or have the resources to do so, according to a new survey. CIO

An eight-hour day could damage your productivity

You want to find ways to "get away without going away." Fortune

Your pupils can win the trust of your employees

As long as they're dilated, that is. New research finds that we're much more willing to trust someone with dilated pupils than those with constricted eyes. Business Insider

CFOs are increasingly optimistic about the economy

Mid-market financial heads gave the economy a rating of 63, up from 59 in 2014 (higher number indicates more optimistic rating). Healthcare remains their biggest concern. WSJ

Up or Out

Jay S. Fishman will step down as CEO of Travelers due to increased complications with a form of ALS. Alan D. Schnitzer, who led the company's Business and International Insurance segment, will assume the top spot. WSJ

PayPal has snatched their new CFO, John Rainey, from United Airlines. Gerry Laderman, will replace Rainey at United in the interim. Chicago Tribune