Risk & Compliance

Dell Follows Disney, Splits Top Jobs

Michael Dell retain the chairman's seat but hands off the role of chief executive.
Stephen TaubMarch 5, 2004

One day after Walt Disney Co. split the roles of chairman and chief executive officer, computer giant Dell Corp. did the same.

The No. 1 seller of personal computers announced that founder Michael Dell will transfer the CEO title to Kevin Rollins, effective with the company’s annual meeting on July 16. Rollins, currently president and chief operating officer, will take the titles of president and chief executive officer.

The company stressed that Michael Dell — who founded the company from his college dorm room 20 years ago — will remain deeply involved in his namesake’s day-to-day business. He will emphasize trends in technology and customer preference, including research and development, while Rollins will lead company strategy and operations.

Rollins will succeed Mort Topfer on Dell’s board of directors. Topfer, a former company executive who retired in December 2001, and a director since December 1999, has chosen not to stand for re-election, the company said.

Many analysts were caught off guard by the changes, according to the Associated Press, since the company had made no strong signals that Michael Dell would step down as CEO. The changes at Disney, on the other hand were surprising more for their speed than anything else.

Amid an emotionally charged annual meeting on Wednesday, Disney stripped the chairmanship from Michael Eisner, who will remain in the role of chief executive officer. Former senator and long-time Eisner friend George Mitchell was voted in as the new chairman.

Disney’s decision to split the two top titles, however, has not silenced critics. At Wednesday’s meeting, more than 43 percent of shareholders chose to withhold their votes for Eisner ̶ although even Mitchell suffered a 24 percent vote of no confidence.

“I can’t imagine a CEO who gets 43 percent of shareholder votes against him is still in his role the morning after,” said Fulcrum Global Partners analyst Richard Greenfield, according to Reuters. “You would think there would have been some discussion about removing him from the company altogether.” Added Tradition Asiel Securities analyst Paul Kim, “I don’t think you could perceive this as anything other than a nominal change.”

Mitchell’s appointment was criticized, in part, because while the former legislator will be competing with larger-than-life icons — such as Rupert Murdoch at News Corp., Dick Parsons at TimeWarner, and Sumner Redstone at Viacom — he has no media experience.