Tim Cook is training several possible CEO candidates because he wants an internal successor at Apple
The turmoil that ensued at OpenAI after founder Sam Altman’s ousting and speedy return has been a hard lesson in what happens when succession plans aren’t chalked out. Trillion-dollar company Apple $AAPL, though, doesn’t plan on delivering any shocks like that to employees or investors.
“We’re a company that believes in working on succession plans, so we have very detailed succession plans—because something that’s unpredictable can always happen, I can step off the wrong curb tomorrow. Hopefully that doesn’t happen. I pray that it doesn’t,” CEO Tim Cook said while speaking to singer Dua Lipa on an episode of her At Your Service podcast released over the weekend.
For the next couple of years at least, the 63-year-old Cook plans to stay in charge. But simultaneously, his replacement, or rather his possible replacements, are being primed and prepped.
“I would say that my job is to prepare several people for the ability to succeed, and I really want the person to come from within Apple, the next CEO. So that’s my role: That there’s several for the board to pick from.”
—Tim Cook on the At Your Service podcast
OpenAI first appointed an internal interim CEO, chief technology officer Mira Murati, but she didn’t last the weekend. The company quickly regrouped and brought in former Twitch boss Emmet Shear. But Altman is back now, with new board members in tow.
Apple won’t go down that route when Cook moves on. It is looking inward, as it (almost) always has. The 47-year-old company has had six different CEOs, and none but the first were brought in from outside.
1977: Michael Scott, the director of manufacturing at National Semiconductor, is convinced to take up the post by Apple investor Mike Markkula (more on him later) because co-founders Steve Jobs and Steve Wozniak were considered too inexperienced at the time. An early hire, Scott was technically employee five, who assigned himself employee number seven (because 007, get it?) for official purposes like payroll. Scott grew the company rapidly.
Scott, no relation to the similarly named boss in the television show The Office, was nothing like the TV personality who couldn’t bring himself to fire anyone. On a day that came to be known as “Black Wednesday” internally—Wednesday, Feb. 25, 1981—Scott fired 40 employees from the Apple II engineering team and then threw a party. He shook a nervous crowd further by saying, “I used to say that when being CEO at Apple wasn’t fun anymore, I’d quit. But now I’ve changed my mind. When being CEO isn’t fun anymore, I’ll just fire people until it is fun again.”
1981: Before becoming Apple’s second CEO, Mike Markkula was the company’s original angel investor and first chairman. In 1977, he funnels $250,000 (plus $80,000 as an equity investment in the company and $170,000 as a loan) to become a one-third owner of Apple and the third employee of the company, behind the two founders. In addition to his business prowess, Markkula also exhibits strong technical skills given his engineering background.
In 2023, a one-third stake in Apple would be worth about $900 billion, but Markkula didn’t enjoy that windfall—he left the company with the rest of the board at Jobs’ behest in 1997.
1983: Pepsi’s youngest-ever president John Sculley is poached by Markkula to take over as CEO because Jobs is still—you guessed it—too inexperienced to lead. Sculley and Jobs don’t get along, and each tries to elbow the other out. Sculley wins the support of Apple’s board and Jobs leaves the company. Sculley has a good run for a few years, but after a disappointing first quarter in 1993, the board removes Sculley from his seat.
1993: Michael Spindler, who joined Apple in Europe in 1980, takes over as Apple’s CEO when Sculley is fired.
1996: Gilbert Frank Amelio comes from the same place Apple’s first CEO did—National Semiconductor—except he already was on Apple’s board. The chips company was a major supplier for Apple, and Amelio had joined Apple’s board in 1994. He replaces Spindler with the stock at a 12-year low. He attempts a turnaround, personally signing letters to customers asking them to stick with Apple through this difficult time, and ordering layoffs and budget cuts, but to little avail. At one year, his CEO stint is the shortest one in Apple’s history.
1997: Jobs steps back into the picture, this time as CEO, and is the driving force behind the creation of the iPod (2001), the iPhone (2007), and the iPad (2010).
2011: Jobs resigns on account of his illness in August, and dies in October. The appointment of Cook as his replacement is no hasty decision—he’s been at the company for more than a decade before taking the helm.
In his conversation with Lipa, Cook did not name names.
As per the media rumor mills, there are several decade-old veterans at the company who’ve been touted as possible candidates. They include senior vice president and general counsel Kate Adams, senior vice president of internet software and services Eddy Cue, Apple Music chief Oliver Schusser, vice president of internet services Jennifer Bailey, and a handful of others.
Former president of services Peter Stern was apparently another option, but he’s likely not in the running since he moved on to Ford $F in August.
A 2022 Harvard study found that 86% of boards at S&P 500 firms promoted insiders to CEO roles in 2021.
The commonly held belief is that CEOs hired from the inside tend to know the business and culture better, ensuring a smoother transition. That’s not to say external hires bring no value—they do. They may bring more broader knowledge, not be wedded to existing strategies, and be able to take harder decisions.
Put simply, to pick between an internal and external candidate, the question boards have to ask themselves is this: Do they want business to run as usual or are they seeking a shakeup?
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