Tyson CEO’s $3 Billion Decision

Tyson’s market value declined by $3.4 billion instantly when the company announced earnings, outlook, and the CEO transition. Much of that wealth destruction derived from disappointing profits and a downbeat revised outlook, but much of it also reflected investor concern that Smith – only 56, widely regarded as Tyson’s best CEO ever, under whom the stock has more than quadrupled in seven years – was leaving unexpectedly. “We are not at all happy to see Mr. Smith step down,” wrote analyst Timothy Ramey of Pivotal Research Group. “[His tenure] has been the best period of Tyson’s history, without doubt.”

The larger point is that this type of value-jarring scenario is playing out more often, and it didn’t used to happen. A single individual comes or goes, and a company’s value immediately rises or falls by hundreds of millions or billions of dollars. Consider:

-American Airlines COO Scott Kirby left to become COO of United Airlines in August. United gained $1.5 billion of market value on the news.

-Henkel Group and Adidas announced in January that Henkel CEO Kasper Rorsted would leave to become CEO of Adidas. Henkel immediately lost $2 billion of market cap, and Adidas, a smaller company, immediately gained $1 billion.

-Starwood Hotels and Resorts CEO Frits van Paasschen resigned abruptly in February 2015, and no successor was named. The company gained $420 million on the news.

–Mike Jeffries, the retail genius who made Abercrombie & Fitch a business phenomenon until he lost his touch, resigned in December 2014, and no successor was named. The company immediately gained $150 million of market cap.

-Microsoft CEO Steve Ballmer announced in August 2013 that he would step down within 12 months. The company gained $18 billion of market value in two hours.

At a time when the role of people in the economy is a matter of urgent interest – when technology is replacing not just drivers but also doctors, lawyers, and other highly educated, highly paid people – these examples illustrate a strong countertrend. At least in some situations, the value of an individual human, positive or negative, is greater than ever.

How broad is this countertrend? Are we moving toward an economy in which the skills of millions will be devalued while a few individuals will become hyper-valuable? Or will it be an economy in which a new set of high-value skills are available to everyone? I see strong evidence for the second future, in which those new high-value skills will be skills of deep human interaction. But I’m keeping an open mind. We haven’t seen this movie before, and it’s already a riveting story.

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What We're Reading Today

Amazon's play for sports
Jeff Bezos's company has been in discussions with major sports leagues, including the NBA, MLB, and NFL, about acquiring rights to show games on its streaming service. But ESPN and other networks have locked up many leagues' rights for the next decade, leaving Amazon trying to sign up any league available, including, for example, the National Lacrosse League. It's all an effort to increase subscribers to its Prime service. Fortune

Disney expands in Hong Kong
Disney's Hong Kong theme park lost money last year, but Bob Iger's company has decided to invest $650 million to change that. The Hong Kong government, which owns 53% of the park, will provide $750 million. The decision comes in response to new competition, notably Wang Jianlin's Dalian Wanda, which plans to open 20 theme parks across China. Reuters

Tyson Foods CEO steps down
CEO Donnie Smith will step down at year-end as the food giant's profit outlook dims. Lower meat prices have increased profits in recent years, but Tyson's chicken division is under cost pressure and faces a multi-billion-dollar lawsuit over alleged price fixing (which the company denies). President Tom Hayes, already the heir apparent, will succeed Smith. WSJ

VW brand outlines turnaround strategy
To cut costs while speeding adoption of new technologies, Volkswagen's signature brand intends to sell 1 million electric cars annually by 2025 and more than triple its profit margin in the process. Brand chief Herbert Diess said the U.S. will be a  focus of the expansion. Automotive News

Building Better Leaders

Designing the office to encourage female leaders...
...involves addressing what both genders need, including mothers' rooms or more lounge areas for communal conversations.  Inc.

When co-workers interrupt you...
...be sure to return to your thought after the other person finishes. Adding something like, "I’d like to circle back and share the final piece of my idea, because it’s important to the discussion" establishes your authority. Fortune

Confusing perks with culture
Flashy perks, like four-day work weeks and ping pong tables, attract employees, but it's the culture that retains them.  WSJ

Trump Talks

Trump lays out plans for first 100 days
In a YouTube video, President-elect Donald Trump said he would focus on ending the Trans-Pacific Partnership, reducing energy consumption restrictions, and scrutinizing visa programs for hiring non-U.S. citizens. He didn't mention repealing Obamacare or building a wall between the U.S. and Mexico. CBS News

The problem with repealing Obamacare
Trump may have avoided mentioning Obamacare because he lacks the 60 votes needed in the Senate for outright repeal, and even changing the program is highly complex. Developing a solution that won't anger the 30 million people who are newly covered or who can buy cheaper policies under the law could take months. Fortune

Trump meets with top news execs and anchors
During the off-the-record conversation, Trump reportedly vented about how news anchors and organizations got the election wrong, while also asking for a "cordial" relationship. Anchors at the session included NBC's Lester Holt, CNN's Wolf Blitzer, and ABC's George Stephanopoulos. CNNMoney

Up or Out

Fidelity Investments Chairman Edward Johnson III will retire in December, to be succeeded by his daughter, Abigail Johnson.  Fortune

Boeing has named Kevin McAllister CEO of its commercial airplane division.  CNBC

Fortune Reads and Videos

Trump cancels meeting with the New York Times...
...then tweets about it. "I cancelled today’s meeting with the failing @nytimes when the terms and conditions of the meeting were changed at the last moment. Not nice," said the president-elect on Twitter. The NYT denies it changed conditions of the meeting. Fortune

U.K. won't name Nigel Farage ambassador to the U.S.
Trump, on Twitter, said Brexit campaign leader Farage would work well in that role. Fortune

1,700 Americans become millionaires each day
And 3.1 million will become new millionaires by 2020, says the Boston Consulting Group. Fortune

Starbucks customers aren't happy...
...with a price hike of 10 to 30 cents on some cold drinks and baked goods, imposed  within 48 hours after the election.  Fortune

On this day...