Above From left to right: Stefano Pessina (Walgreen Boots Alliance), Juan Luciano (Archer Daniels Midland), José Almeida (Baxter International), Dennis Muilenburg (Boeing), Bernardo Hees (Kraft Heinz), Steve Easterbrook (McDonald’s), Oscar Munoz (United Continental Holdings) Photo Illustration: Jesse Lenz

Historically, the Chicago area’s biggest companies have had a reputation for stability, starting with the executives who ran them. The classic Chicago CEO grew up in the Midwest and could expect plenty of time in the corner office. Moline-born Jim Skinner, for example, worked at McDonald’s for 41 years, retiring in 2012 after eight years at the top. Loyola University grad Robert Parkinson Jr. led the Deerfield drugmaker Baxter International for 11 years. Milwaukee-reared Pat Ryan headed the insurance brokerage that eventually became Aon for 44 years.

Along with that stability came an old-boys network. Corporate chieftains moved in the same social circles, frequented the same clubs, and served on the same civic and corporate boards. Indeed, a decade ago, the Chicago area had the most interconnected corporate boards of any metro area in the nation, according to a Crain’s Chicago Business study. (Twenty local executives sat on the boards of at least three of the area’s 94 biggest public companies.)

So you may have been startled to see local CEOs suddenly dropping like characters in an Agatha Christie whodunit. In little more than a year, seven of the metro area’s 16 largest public companies by revenue—Archer Daniels Midland, Baxter, Boeing, Kraft Heinz, McDonald’s, United Continental Holdings, and Walgreens Boots Alliance—have replaced their CEOs. Most of the newcomers have few, if any, deep ties to Chicago; most weren’t born in the United States (see “Welcome, Foreigners,” below).

Is all this leadership change a fluke, or something more? And what, if anything, does it mean for the city?


First let’s look at the seven companies in question. Two of them, ADM and Boeing, engineered well-planned, garden-variety transitions for long-tenured CEOs who were retiring. Juan Luciano, an Argentine who had been ADM’s highly regarded chief operating officer, picked up the baton from Patricia Woertz in January 2015. Dennis Muilenburg, a Boeing insider with a reputation for both innovation and cost containment, succeeded 10-year vet James McNerney Jr. last July.


As you may know, Jeff Smisek’s departure from United was the polar opposite: He left last September under the cloud of an ethics probe. (To add to the drama, Smisek’s successor, Oscar Munoz, the former COO of railroad company CSX, suffered a heart attack a month later. Munoz received a heart transplant in January and plans to return to work by March 31.)

But the most common spur for the recent crop of CEO departures— involving all four of the remaining companies—was activist investors and/or Wall Street analysts demanding better, faster financial results. Parkinson? Retired and replaced in December by José “Joe” Almeida, a Brazilian and the former CEO of Irish medical device maker Covidien, due in part to agitation from the hedge fund Third Point, a large Baxter shareholder. Lifelong Chicagoan Don Thompson, whose tenure as McDonald’s CEO coincided with falling sales, profits, and share prices? Fired in January 2015 and replaced by Steve Easterbrook, a Brit who has since steered the stock to an all-time high (and scored big with all-day breakfast).

And you’d have to have been living under a rock to have missed the tumult at Kraft Heinz (formerly Kraft Foods and before that Kraft), which has seen four CEOs in five years. (The current chief is Bernardo Hees, a partner in the Brazilian investment firm 3G Capital, which coengineered July’s Heinz and Kraft Foods merger.) Or the power struggle at Walgreens before the Alliance Boots merger in late 2014. The avid Italian cost cutter Stefano Pessina fashioned a board of directors that promptly chucked CEO Greg Wasson, an Indiana native and 35-year company man, in favor of Pessina himself. Pessina lives in Monaco; the exec on the ground in Deerfield is Alex Gourlay, a Scotsman who moved to the United States in 2013.

Companies even seem to be shaking off CEOs just as they relocate here. ConAgra Foods, which plans to move its headquarters from Omaha to Chicago in June, comes with a new chief. Sean Connolly will steer an enterprise newly facing pressure from activist investors: The packaged-food maker announced in November that it’s splitting off its sizable frozen-potato business; prior to that, the company said that it would cut up to 1,500 jobs.

United’s Munoz, by the way, faces similar pressures. In January, while he was recovering from his heart surgery, two activist investor groups bought large holdings in the airline. Both groups have a history of pushing for change, including new leaders.


All this has caught the notice of John Rogers, the founder and CEO of the mutual fund company Ariel Investments (and No. 37 on this year’s power list). “It seems like lately we have been getting a disproportionate amount of activist investing in Chicago,” he says. “So many large shareholders come in and push for change”—change that is meant to make all shareholders richer but can harm workers and communities (think mass downsizings, the selling of divisions, perhaps a sale or merger of the company itself). Activist investors’ focus on short-term stock gains is anathema to Rogers, who prefers to invest for the long term, often in stable Midwestern companies.

Generally speaking, activist investors couldn’t care less whether a company’s leaders have local ties. In fact, clubbiness is usually seen as a liability. At Baxter, for example, Third Point reportedly wanted an outsider as CEO in order to end Baxter’s insular culture. Foreign roots, or at least substantial overseas experience, is a plus. After all, the growth potential of, say, McDonald’s is far higher abroad than in the United States, where most markets are already saturated.

Shareholder activism isn’t the only force cutting CEO tenures short, of course. Reforms put into place way back in 2002, with the passage of the Sarbanes-Oxley Act, have gradually made a real difference in how the boards of public companies operate. Because the law puts extra legal pressure—including the threat of prosecution—on board members not to act in ways that suggest cronyism, “the days when CEOs could pick their friends for board seats are largely over,” says Bob Eckert, a cochair of the Kellogg Corporate Governance Conference at Northwestern and the CEO of Kraft from 1997 to 2007.


As Chicago boards have become more professional and less cozy, they have become less inclined to give middling CEOs a pass. Want proof? The board that kicked out Wasson from Walgreens is headed by Jim Skinner. The one that ousted Thompson from McDonald’s is chaired by native Chicagoan Andy McKenna. “We live in an era when the activist investor has a responsible role,” McKenna says, adding: “Our current CEO [Easterbrook] calls himself an internal activist.”

Interestingly, Chicago’s recent executive-suite churn bucks the national trend. According to research published in the Harvard Business Review last June by Per-Ola Karlsson, a senior partner at the management consulting firm Strategy&, “crisis replacements” of big-company CEOs—such as those at Baxter, Kraft Heinz, McDonald’s, United Continental, and Walgreens Boots Alliance—are at an all-time low in the rest of the country. Given that the economy in general is churning faster than ever, Chicago seems like the proverbial canary in the coal mine. The leadership changes we see here may well be a prelude for faster changes everywhere else, too.


Chicago has always had CEOs who hail from elsewhere, of course. They generally put down roots and immersed themselves in city life. Consider Glenn Tilton, who moved here from Houston in 2002 to run United Airlines. Though he left the CEO seat in 2010, he chose to remain in Chicago, where his numerous board memberships include the Chicago Council on Global Affairs.

However, the new class of top executives—part of a global elite with overseas roots and training—tends to hop frequently from company to company and place to place. “I’d worry civically about this trend,” says Don Spetner, a senior corporate adviser at Weber Shandwick and a former recruitment executive. “When you have people from all sorts of origins, who probably will move on again, it is hard to get them involved.”

Rogers shares those concerns. The recent C-suite flux, he worries, imperils what he calls “a virtuous circle.” He explains: “You might have banked at Northern Trust, invested through William Blair, and so on. That created more local employment, created tax revenue and more money for local institutions.” He’d dread a day when Chicago’s “golden era of leadership,” in which the city grew stronger because of these links, comes to an end.

No matter what your view may be on corporate clubbiness, there’s no denying that Chicago has often benefited from it. By drawing on their strong networks to push pet civic projects, local chiefs have had an outsize impact on the city. “These were your friends,” explains Harry Kraemer, a professor of strategy at Northwestern’s Kellogg School of Management and the CEO of Baxter from 1999 to 2004. “If you needed to recruit two more guys for something, like [funding] Millennium Park, you could [by saying], ‘We’re all in this together.’ ” Without substantial funding from local business leaders, the wildly popular park would never have been built.

You could even save a giant company if you got in with the right businesspeople. In 2002, with United in bankruptcy and huge corporate customers yanking their travel accounts, Tilton began to make the rounds through the city’s dens of power, giving impassioned speeches about Chicago’s future at the Commercial Club and the Executives’ Club and calling local CEOs directly. “I reached out to one company after another,” Tilton recalls. “ ‘The middle of the country needs a global city,’ I argued, ‘and you cannot be one without a global airline and a major airport.’ ” Every big account, he says, stuck with the airline.


That was then, as the city’s chiefs become less connected and large public companies become less important to the local economy—new jobs and the innovation that leads to growth are increasingly generated at smaller firms—Chicago’s movers and shakers are less likely to be CEOs and directors of big public companies and more likely to be wealthy financiers and entrepreneurs. Such as J.B. Pritzker (No. 3), a major force in tech entrepreneurship, philanthropy, and politics. Or hedge fund billionaire Ken Griffin (No. 4), whose huge donations have helped transform everything from the Art Institute to the governorship. These men’s lofty perches on the power list reflect that influence.


Nevertheless, Chicago would do well to engage the wayfarers and arrivistes. Savvy local leaders, executive organizations, and charities will be calling and cajoling the new CEOs at full tilt. “They won’t be left alone,” promises Pritzker, speaking as one of the cajolers.

Another group who shouldn’t be left alone: Chicago’s ex-CEOs. After all, job searches by former chief executives typically take a year or more, often because noncompete clauses come with their golden parachutes. That’s time they can devote to civic projects. Even at the highest levels, networks are essential resources for the next job, and civic leadership outside a company is still proof of executive mettle. For Chicago, that’s a very good thing.