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Topic: Organization Design: Post-Acquistion Reporting of Executives
Messages (2) Visitors (189)
Mary Presumptuous
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Organization Design: Post-Acquistion Reporting of Executives
01-12-2007 / 10:55 am #1
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My employer is buying a smaller company that will be a wholly-owned subsidiary. We both of international operations. The smaller company has a CEO/President overall plus country presidents for the US and in Asia. After the acquisition, should the their current CEO be:
a) not CEO of the subsidiary, but an employee of the parent;
b) an officer/employee of both the subsidiary and the parent;
c) an officer/employee of just the parent?
What makes the decision on this person go one way or the other?
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Christine Packham
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Re: Organization Design: Post-Acquistion Reporting of Executives
01-25-2007 / 4:04 pm #2
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A CEO cannot legally be held accountable for a company that he/she is not employed by. Therefore, this CEO should be on the payroll of the company for which he/she has direct responsibility. If this CEO is not the CEO of the parent company, he/she should not be an employee of that company.
If this CEO is responsible for only one subsidiary of the parent company, then he/she should be employed by the subsidiary. Please note that if this CEO is responsible for just one subsidiary and he/she is on the parent company's payroll, then he/she in the eyes of the law is the top person in all the companies - there is no position above CEO.
The foregoing was driven by law and logic.
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