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Power Sheet – September 16, 2015

A few examples today of leaders to emulate, or not.

The latest chapter in the story of the incredible Carlos Brito is bigger than any so far, which you might not have thought possible. Brito (even close associates call him by his last name only) is CEO of InBev, the world’s largest brewer – but not, apparently, large enough for him. This morning he’s making a bid for the world’s second-largest brewer, SABMiller, to create the largest brewer in the history of the universe, which has clearly been his goal for many years. Brito, a Brazilian with a Stanford MBA, has made a career of amalgamating brewers – first in Brazil, creating AmBev, which bought Belgium’s Interbrew, creating InBev, which bought America’s Anheuser-Busch, creating AB InBev.

Brito is tough and ruthless. Cost-cutting is a passion. Employee performance results are often posted for all to see. In the beer industry, AB InBev is known as a cutthroat competitor, the most relentless there has ever been. Personally, Brito is affable but intense. He praises top-performing employees and quickly fires underperformers. He is driven – who knows where it comes from – and I have often felt that few business people carry that same internal fire. But as today’s news shows, he knows what he wants, and he tends to get it.

For a fascinating contrast of leaders, read Jeffrey Sonnenfeld’s appraisal of Bank of America chief Brian Moynihan and Mylan chairman Robert Coury. Moynihan is both CEO and Chairman of BoA; combining those titles is a no-no among good-governance advocates. Coury is Mylan’s chairman only, while Heather Bresch is CEO, which in theory is the way it’s supposed to be done. But as Sonnenfeld shows, the theory doesn’t always work in the real world, and it’s about to be the subject of a real-world decision. A week from today, BoA shareholders will vote on whether Moynihan can keep both the CEO and chairman titles.

Sonnenfeld argues that Moynihan has done an excellent job of rescuing the huge institution; Warren Buffett called it “one of the toughest jobs in the history of American banking.” Separating the roles would be pointless, Sonnenfeld argues. Coury, by contrast, while nominally just the chairman, has established himself as CEO-in-fact, if not in title, and has craftily arranged matters to assure he can be “emperor for life,” says Sonnenfeld – the opposite of good governance.

The clear lesson is that the individual in a leadership role is far more significant than what the role is called.

By the way: Stephen Colbert continues to snag some of the world’s most impressive leaders as guests. Watch his interview with Apple CEO Tim Cook. And if you’re watching the Republican debate this evening and judging the performances, keep the leadership test in mind: Is this someone I want to follow?

What We’re Reading Today

Subway co-founder, CEO Fred DeLuca passes away

While the family did not specify the cause of death, DeLuca announced he had Leukemia two years ago. This summer, DeLuca’s sister, Suzanne Greco, took over the role of president and managed the day-to-day operations of the sandwich chain. No successor has been named, as Subway finds itself with dragging sales and managing the fallout from the Jared Fogel child pornography scandal. DeLuca was 67. Fox News

Anheuser-Busch InBev offers to buy SABMiller 

The merging of the two beer distributors would create a mammoth $245 billion company. AB InBev CEO Carlos Brito‘s offer is said to far exceed SABMiller’s $75 billion market capitalization. If SABMiller CEO Alan Clark decides to move forward, regulators in the U.S. and Europe will take a close look. The combined companies would command 70% of the global beer market. WSJ

Fiat Chrysler agrees to union deal

Fiat Chrysler CEO Sergio Marchionne and United Auto Workers President Dennis Williams have shaken hands on an agreement to avoid a work stoppage. It comes 19 hours after the previous labor contract had ended, while the two sides extended it hour-by-hour to finalize the new deal. Specifics were not announced, but it includes some form of health care co-op and an eventual end to the two-tier wage structure. Detroit News

Billionaire space-race adds another player

Amazon founder Jeff Bezos announced his private aerospace company Blue Origin will begin building and launching rockets from Cape Canaveral, Fla. Bezos hopes to  launch his first rocket by 2020, joining Tesla founder Elon Musk and Virgin Group creator Richard Branson in the private space industry race. Fortune

Obama, GOP fighting over the budget

Stop me if you’ve heard this before. With Republicans threatening to block a budget deal if there’s funding for Planned Parenthood, President Barack Obama has called for the end of a multi-billion-dollar tax break that benefits private equity managers. But don’t worry yet. It’s two whole weeks before a potential government shutdown. NYT

Building a Better Leader

Fathers sue over paid leave

Men have started to sue their employers over the amount of time off they’re given when they have a child or being punished when they return to work for taking leave to be with a newborn. NYT

Patagonia CEO’s journey  

It started with private equity, then India, and now Rose Marcario spends her time running the clothing maker. It’s an interesting look at a leader that found a company that matches her personal values. Fortune

Secret to employee happiness…

…is free snacks. While 56% of employees are happy with their jobs, the numbers jump to 67% when companies provide free food and drinks. USA Today

Layoffs and Shortages

HP will cut 25,000 to 30,000 in enterprise business

The massive layoffs will require a $2.7 billion charge to earnings, as the company prepares to separate its enterprise business from the computer and printer business. The layoffs equal about 10% of HP’s total workforce, and more layoffs could be on the horizon. CEO Meg Whitman estimated that HP would cut 55,000 jobs in total as a result of the split. Reuters

GE will move 500 jobs overseas

GE vice chairman John Rice confirmed the move of the manufacturing jobs, blaming Congress’s decision not to renew the Export-Import Bank. More than half the company’s employees already work outside the U.S. Bloomberg

Amazon, Walmart struggle to find seasonal workers

The unemployment rate has dropped to a seven-year low, leaving retailers and shipping companies like UPS and FedEx scrambling to find enough help in the busy fourth quarter. Shipping delays could be even worse than what we’ve experienced the last couple of years. WSJ

Up or Out

Former Evernote CEO Phil Libin is in advanced talks to join venture capital firm General Catalyst as a general partner.  Fortune

Nina Tassler, the chairwoman of entertainment at CBS, has decided to step down at the end of the year. Glenn Geller, a CBS stalwart since 2001, will take over programming as president of entertainment.  WSJ

The director of the National Institute of Mental Health, Dr. Thomas R. Insel, has announced he will leave the organization he has headed for 13 years to join Google’s Life Sciences division.  NYT

Fortune Reads and Videos

Target boosts e-commerce efforts

It’s piloting a grocery delivery service with Instacart and investing $1 billion this year to increase its e-commerce capabilities. But Target still remains far behind its competitors. Fortune

Pinterest tests color preferences to increase sales

The social network now let you specify a favorite color, which will follow you as you shop for clothes online. Fortune

Berkeley, Calif., proposes a $19 minimum wage

The proposal will gradually raise the minimum wage from $10 now to $19 by 2020. Fortune

“No Drone Zone” near the Pope

The Federal Aviation Administration has banned drone use in any city the Pope visits.  Fortune

Today’s Quote

“I said, ‘Pete [Peter Buck, co-founder of Subway], I want to go to college, to the University of Bridgeport, but I don’t have the money. And I was wondering if you had any ideas about how I might get the money to pay my way through school?’ When I asked the question I had a secret hope that Pete might offer to loan me the money and tell me to pay him back after I graduated… But Pete looked at me, and without hesitation he said, ‘I think you should open a submarine sandwich shop.’ What? Of all the possible answers, this was not one I expected. What an odd thing to say to a seventeen-year-old kid.”Fred DeLuca, co-founder of Subway, who died yesterday.

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Produced by Ryan Derousseau