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Power Sheet – May 23, 2016

Leaders work weekends, and three high-profile leadership stories advanced significantly in the three days since my last missive.

-The Sumner Redstone saga degenerated further, with Fortune’s Peter Elkind breaking the news that Redstone had dismissed a longtime confidant, Viacom CEO Philippe Daumann, as well as a presumed Daumann ally, from the trust that will control Redstone’s $40-billion empire when he dies or is incapacitated. But did Redstone really do it? Or was Redstone’s daughter Shari Redstone the power behind the throne? Daumann’s spokesman told Fortune the move was “a shameful effort by Shari Redstone to seize control by unlawfully using her ailing father Sumner Redstone’s name and signature.”

Shari denies the charge. As one of Daumann’s fellow trustees, she certainly benefits from the change. She’s a director of Viacom, which her father controls through an 80% shareholding, and she was the only director who voted against making Daumann executive chairman last February. The absence of two opponents from the trust would strengthen her hand.

It’s all a tawdry spectacle as Shari, Daumann, and others tangle for control of an infirm old man’s fortune. Some would argue that Redstone, who turns 93 on Friday, is already incapacitated. Expect this saga to get uglier. Redstone’s legacy will be that of a great entrepreneur but a not-so-great leader who could have prevented all this through wiser planning, confronting the reality he denied when he once said, “I’m not going to die.”

-Xerox CEO Ursula Burns will not run either of the companies Xerox will become when it splits later this year. Burns has a great personal story – raised by a single mother in New York City housing projects, starting at Xerox as an intern, rising to CEO by age 50 – and she bet boldly in an attempt to revive a company that had long ago been one of the hottest in tech. But her defining strategic move, buying Affiliated Computer Services soon after becoming CEO in 2009, didn’t prove the bonanza she expected. Last fall, she and the board decided their best hope was splitting the company into a services business based on ACS and a hardware company based on the old Xerox. The company denies the decision was prompted by activist investor Carl Icahn, who will gain three board seats at the services company. Xerox stock returned far less than the S&P 500 during Burns’ tenure. What’s next for her remains to be seen; she’s only 57.

New York City Mayor Bill de Blasio’s administration is being investigated further, adding to a developing narrative of possible corruption surrounding him. The New York Post reported Sunday that U.S. Attorney Preet Bharara and Manhattan District Attorney Cyrus Vance are investigating a deal in which the city sold rights to develop a public library site into a high-rise condo tower. That makes a half-dozen or so potential scandals in the making. Many leaders struggle to control the narratives of their tenure. De Blasio is losing control of his.

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What We’re Reading Today

Bayer offers $62 billion for Monsanto  

Werner Baumann‘s bid for Monsanto marks a 37% premium to the seed company’s closing price on Friday. If Hugh Grant‘s Monsanto were to accept the offer, it would make the world’s largest agricultural supplier. However, investors have attacked Baumann’s plans, including one major Bayer shareholder calling the strategy “arrogant empire-building.”  Fortune

Sumner Redstone to name new members to his trust… 

…and they appear to be longtime allies of his daughter Shari. On Friday, Redstone moved to replace Viacom CEO Philippe Dauman and Viacom director George Abrams from his trust and from the National Amusements board. The press release cited opposition over Viacom’s decision to sell part of Paramount Pictures as the reason for the split. Thaddeus Jankowski, a National Amusements senior vice president and general counsel who works under Shari, is expected to be named to the trust. NYT

U.S. lifts decades-long Vietnam arms ban

President Barack Obama lifted the over 50-year-old ban on selling military equipment to the country, citing the two sides’ growing trust and cooperation. Although Obama denied that the decision had anything to do with Chinese President Xi Jinping‘s efforts to increase that nation’s presence in the South China Sea, it does come as territorial tensions have grown. The Guardian

Listeria recalls hit the frozen food aisle 

CRF Frozen Foods, which supplies to stores like Costco, Target and Trader Joe’s, must recall over 400 products, involving millions of packaged fruits and vegetables. It’s one of the largest food recalls in recent memory, and is linked to a listeria outbreak that has resulted in eight illnesses.  NBC News

Building a Better Leader

We prefer natural-born talent over… 

…those who have worked hard to develop their skills. Harvard Business Review

Want to become a CEO one day?

Study engineering in college. There’s a shortage of talent and it’s one of the most common undergraduate degrees of current CEOs. Fortune

Prior to becoming COO of Nasdaq… 

Adena Friedman went part-time after she had her kids. But she kept her career goals on track with the help of an understanding work environment and supportive husband. NYT

Worth Considering

Tribune Publishing rejects Gannett’s latest bid

The publisher of the Chicago Tribune and the Los Angeles Times rejected the $864 million bid from Bob Dickey‘s Gannett. However, the newly implanted Tribune CEO Justin Dearborn will provide confidential information to Gannett, giving it a path to purchase the company. Last week, Gannett asked Tribune investors to withhold support of eight new board nominees set to be voted in June 2, due to opposition over the deal. Fortune

VP candidate holds to Holocaust comparison… 

…when describing Donald Trump‘s plans to deport millions of undocumented workers. Libertarian Party VP hopeful and former Massachusetts Governor Bill Weld reiterated that the plan sounds similar to “Kristallnacht.” Weld served on the U.S. Holocaust Commission under President George W. Bush and is vying to join Gary Johnson‘s presidential ticket, which could serve as a thorn in Trump’s side in the general election. CNN

Investor group wants a VW independent commission

The DSW, a German investor association, has called for an independent commission to audit Volkswagen’s cheating scandal. This would go beyond Matthias Müller‘s current internal special committee investigation. VW has yet to share findings from that inquiry. Reuters

Up or Out

Xerox CEO Ursula Burns will not serve as CEO once the company splits into two businesses. She will remain chairwoman of the hardware business after the split.  MarketWatch

Fortune Reads and Videos

Why Bob Iger dumped Disney’s video game efforts

It had less to do with the Infinity division’s performance and more to do with the attractiveness of licensing. Fortune

Tesla will create a plant in China…

…when the vehicle’s demand hits a “critical mass” in the country, says CTO JB Straubel. Fortune


Hillary Clinton’s lead over Donald Trump…

…has shrunk to three percentage points, according to a recent poll. It’s considered a statistical dead heat. Fortune

Quote of the Day

“[Mullah Akhtar Muhammad] Mansour rejected efforts by the Afghan government to seriously engage in peace talks and end the violence that has taken the lives of countless innocent Afghan men, women and children…. The Taliban should seize the opportunity to pursue the only real path for ending this long conflict — joining the Afghan government in a reconciliation process that leads to lasting peace and stability.” — President Obama announcing that the U.S. had killed Mansour, the head of the Afghan Taliban.  NYT

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Produced by Ryan Derousseau