Investors, in general, are a nervous lot. They tend to focus on which way events will go in the coming weeks, months, or years. Particularly for those investing in larger, cash-flowing corporations, predictability is good, and big change is bad.
So when it's time to make changes in executive management -- for any reason -- you can imagine the hand-wringing that goes on behind the doors of corporate conference rooms. Especially in a world where class action litigation from shareholders is a standard punishment for any 10% drop in share price, public corporations are extremely cautious about how to execute and adequately explain management changes to their owners.
With founder Irwin Jacobs having led the company since its inception, Qualcomm (NASDAQ:QCOM) has not had to face such an investor-relations dilemma. Until now. After almost 20 years in business, Jacobs will hand over the role of CEO to his son, Paul Jacobs, in July. The management changes also included the retirement of current President Tony Thornley and promotion of Steve Altman to that post.
It's a shame the typical CEO and executive "transitions" these days are of a more criminal nature and get described in terms such as "shakeup," "disposal," or -- my favorite -- "bloodletting." The recent announcement of Boeing's (NYSE:BA) removal of its CEO for an improper relationship with a female executive doesn't help, either.
But what made the succession at Qualcomm such a nonevent was the that very little is changing -- and what is changing is happening at a measured pace. Irwin Jacobs will continue to have an active role as chairman of the company he founded. The market liked the ease of the change, and no great rush out of Qualcomm's shares ensued.
After meeting with Irwin a few weeks ago, I can confirm that though he breathed not a word of relinquishing his role as CEO, he still has that gleam in his eye. I'm not talking about a sparkle and smile that people have at the end of their career, when they look forward to replacing long days at the office with leisure, world cruises, and lawn bowling.
The gleam in Irwin's eye is passion -- the eagerness to dig into problems that have dogged countless others. The problems that many have said are impossible to be solved. Irwin Jacobs managed to stay retired for just a few weeks after leaving his last company, Linkabit. There's no way he could sit home on the deck and read the paper to find out what amazing thing Qualcomm has figured out how to do this time. Not with all the opportunity he still sees in front of the company.
He'll be there for all of it, and an exceptional team of employees he's gathered will be right there with him.
For a related story, see Qualcomm Takes a Breather.
If Fool contributor Dave Mock sounds a little biased toward Qualcomm, he should be. Though he owns no shares of Qualcomm, he has written its first corporate biography -- The Qualcomm Equation.
