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Power Sheet – March 10, 2016

If you want a serene, uneventful life, don’t become a leader. Consider three vignettes in this morning’s news:

Oscar Munoz built a picture-perfect career. The first member of his family to graduate from college, he got an MBA from Pepperdine University and began a series of increasingly important jobs at great, brand-name companies: PepsiCo, Coca-Cola, AT&T, and CSX, the giant railroad. He became CSX’s CFO and then its president and COO. Along the way he joined the board of Continental Airlines and, when it merged with United, the board of the combined firm.

Then, last September, it was revealed that United Continental CEO Jeff Smisek was being investigated by prosecutors as part of a corruption probe. He resigned abruptly, and the company needed a new CEO fast. Suddenly Munoz was the chief of an airline. Then, a month later, he had a heart attack. Then, less than three months later, he had a heart transplant. He returned to work on Monday – and the next day two hedge funds launched a proxy fight to take over the company’s board and replace its chairman with Gordon Bethune, the former Continental CEO who recruited Munoz to that company’s board 22 years ago. Just last August, who could have imagined it all?

Michael Horn was overseeing Volkswagen’s impressive success in the U.S. as chief of its American unit when the emissions cheating scandal broke last September. His ultimate boss, Martin Winterkorn, resigned within days, and many wondered if Horn would too. But the dealers loved him, and who knows what kind of internal calculus was going on. He stayed. He testified to a Congressional committee. He claimed he knew nothing about the scandal until a few days before it became public. And then, yesterday, he resigned and left the building. The dealers still love him. A group of them issued a statement saying “This change in management can only serve to put the company more at risk, not less.” And maybe he knew nothing about the cheating; none of the affected vehicles were made in the U.S. Still, suddenly, he’s gone.

-Former Salomon Brothers chief John Gutfreund, who died yesterday, rode the waves of top leadership through extraordinary highs and lows. Proclaimed “The King of Wall Street” on Business Week’s cover in 1986, he had to resign in 1991 over the firm’s violation of U.S. Treasury auction rules. In between he became famous to the general public, not in a good way, as a leading character in Michael Lewis’s highly successful first book, Liar’s Poker. Lewis later reported that he and Gutfreund had lunch years later, when Gutfreund told him the book “destroyed my career and made yours,” a fairly accurate assessment.

That’s what leaders’ lives are like. For them more than for most, it’s wise to remember an old aphorism: Enjoy the journey for itself because you never know where it’s taking you.

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What We’re Reading Today

U.S. head of VW steps down

Michael Horn, who served as head of U.S. operations for two years, became the face of VW’s response to the emissions scandal for dealers. But his bluntness and honesty may not have sat well with CEO Matthias Müller as the company continues trying to resolve the emissions issue. Following the announcement, VW’s National Dealer Advisory Council blasted Müller and his management team while praising Horn. Hinrich Woebcken will replace Horn on an interim basis. Automotive News

Obama blasts Middle East ‘free riders’ 

In conversations with The Atlantic, President Barack Obama spoke about Vladimir Putin, ISIS, and Israeli Prime Minister Benjamin Netanyahu. He also spoke about allies in the Middle East and Europe that he feels try to push the U.S. into conflicts while doing little themselves. He also came out strongly against Saudi Arabia, saying the kingdom needs to share responsibility for managing conflicts in the region. The Atlantic

Trump made millions from bankrupt casino

While Donald Trump served as chairman of Trump Hotels and Casino Resorts from 1995 to 2009, the company went public, lost $1.1 billion, and declared bankruptcy twice. Through it all, the company paid Trump millions for use of his private plane, use of his name, and even for Trump water. The company took on $1.8 billion in debt while Trump continued to receive bonuses under an unusual arrangement. Fortune

Democratic debate gets testy

Hillary Clinton and Bernie Sanders attacked each other’s immigration policies as they debated after Sanders’s surprising victory in Michigan this week. Both criticized the White House’s deportation policy, saying they didn’t believe in deporting children or those without a criminal record. Sanders attacked Clinton’s lack of support for immigrants fleeing Honduras, while Clinton questioned Sander’s failure to back a 2007 immigration bill championed by former Senator Ted Kennedy. NPR

Building a Better Leader

Craft brews’ rise has caused a talent shortage

Finding people with brewing skills (and sometimes the ability to run a forklift) has been a challenge. CNBC

Boston Consulting Group, Ultimate Software, and these 7 other companies…

…pay 100% of employees’ healthcare coverage.  Fortune

How one CEO used the loss of his voice…

…to turn around his lumber company. It forced Kevin Hancock to reduce his role and trust others. NYT

Appeasing Others

Honda to reimburse dealers for Takata airbag fiasco 

The company is preparing to reimburse U.S. dealers for the depreciation of vehicles not sold because of the Takata airbag recall. In January, Honda recalled 1.7 million new and used vehicles for faulty air bag inflators developed by Takata. The move by Takahiro Hachigo‘s company ensures dealers are compensated for reduced sales of Hondas and Acuras. Reuters

Ikea brings Swedish management to the U.S.

By discouraging workaholics, offering health coverage for part-time employees, and giving employees 24 annual days off, Ikea has tried to keep its Swedish ideals. Those also include a lack of hierarchy, so head of U.S. operations Lars Petersson may help a worker solve a trash problem. Another rare perk: covering costs of gender reassignment surgery. The strategy has helped build a $5-billion business in the U.S. Fortune

Valeant adds three new members to its board…

…including a seat designated for activist investor Bill Ackman‘s Pershing Square Capital Management. Ackman said this week that Valeant is still very valuable, but if CEO J. Michael Pearson doesn’t stabilize the company soon, it should be sold or should hire new management. The board seat will be filled by Pershing vice-chair Stephen Fraidin and is a nod by Valeant to one of the company’s largest and most vocal shareholders. NYT

Up or Out

Peter Holt has stepped down as chairman and CEO of the company that runs the NBA basketball team San Antonio Spurs. His wife, Julianna Holt, will assume the role.  News 4 San Antonio

Crown Castle International hired Daniel Schlanger as its CFO, starting in June.  WSJ

Fortune Reads and Videos

ISIS member info leaked…

…through a stolen USB stick. It contains 22,000 names, many of which weren’t know to authorities.  Fortune

CVS to launch $50-million anti-smoking campaign

Dropping cigarette sales has boosted its health-centered image. Fortune

Twitter offering new cash and stock bonuses…

…to employees in order to slow talent flight. It will also reimburse employees for the loss of Twitter stock value since they began working at the company. Fortune

Steve Ballmer talks about Twitter, Microsoft, and more

He wants more disclosures from Microsoft’s cloud business. Twitter has convinced him he’s not an investor. Fortune

Quote of the Day

Isis is not an existential threat to the United States… Climate change is a potential existential threat to the entire world if we don’t do something about it…[I]t is a political problem perfectly designed to repel government intervention. It involves every single country, and it is a comparatively slow-moving emergency, so there is always something seemingly more urgent on the agenda.” — President Barack Obama discussing the threat of climate change.  The Atlantic

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Produced by Ryan Derousseau