Managing the CEO Hand-Off
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Holmes Report

Managing the CEO Hand-Off

On January 8, 2001, Philadelphia-based VerticalNet – one of the industry’s most promising business-to-business e-commerce firms -- announced that Mike Hagan, the Company’s co-founder and chief operating officer, was named the new CEO.

Paul Holmes

On January 8, 2001, Philadelphia-based VerticalNet – one of the industry’s most promising business-to-business e-commerce firms -- announced that Mike Hagan, the Company’s co-founder and chief operating officer, was named the new CEO.  That same day, Joe Galli, VerticalNet’s former CEO, was appointed the new CEO of Chicago-based Newell Rubbermaid, a $7 billion multinational consumer products company.  At the request of Galli, FitzGerald Communications managed both announcements simultaneously, starting with intense research and planning in late 2000.  In driving both announcements, which generated a large volume of positive print and broadcast press coverage for both companies, we deftly avoided generating negative coverage for either company -- a challenge given that both announcements had their share of potential downside.  


The related baggage, if positioned improperly, could have become the focal point of the press coverage.  Listed below are the five “pressure points” FitzGerald managed:

  • Joe Galli had the reputation of a “New Economy job hopper.”  He left VerticalNet after only 4 ½ months in office.  He came from, where he spent 13 months as the chief operating officer.  Prior to that, he spent 19 years in various senior management posts at Black & Decker.  Galli’s move occurred just as the business press was covering a slew of former “Old Economy” executives fleeing new posts at Internet companies as market conditions for Internet companies began to rapidly deteriorate.  Moreover, Galli earned nearly $3 million in his short stint at Vertical Net – not a positive message to relay to stockholders during troubled economic conditions.
  • The B2B Internet market has yet to fulfill its early promise to become one of the largest and fastest growing technology sectors.  Stock prices of companies like VerticalNet, Ariba and CommerceOne fell sharply into the single digits in recent months.  Wall Street and other influencers lashed out at the players in this sector for their unbridled optimism.  There was considerable speculation that VerticalNet would be sold in the near future.  The abrupt departure of a CEO only fueled those fires.
  • The Galli resignation was yet another announcement in the long stream of negative news from VerticalNet.  With its future already deemed shaky, it would be easy for the press to lump VerticalNet into the category of other failed, over-hyped Internet ventures after learning about the Galli news.
  • Galli’s replacement, Mike Hagan, was not well known among the news media or Wall Street.  Galli, however, enjoyed a high public profile as a high-energy manager famous for his operational turn-around strategies at Amazon and Black & Decker.  Yet, Galli was going to an extremely low-profile consumer goods company that had never championed corporate communications or public relations in its history.


To ensure that FitzGerald had the knowledge necessary to ensure positive coverage for both companies, we completed the following research in late 2000 prior to the announcement:

  • Review previous announcement strategies from other companies coping with rapid CEO departures: what were the lessons learned from successes and failures?
  • Review CEO appointment coverage for both “Old Economy” and “New Economy” companies: what were the reporters looking for to file positive profiles?
  • Review of past coverage of both companies to anticipate difficult questions as well as “loose ends” or perceived flaws that reporters may uncover during their reporting.

Our objectives for these announcements were as follows:

  • Ensure both companies and both CEO appointments were perceived in a positive light in the resulting coverage.
  • Ensure the Galli departure was seen as a cordial, friendly and natural transition and position the Hagan announcement as a logical ascendancy for a popular and well-regarded COO – rather than a desperate move for a company with a shaky track record.
  • Ensure the Galli/Rubbermaid news did not eclipse the Hagan/VerticalNet announcement, as Galli is a well-known CEO moving to a much larger company.
  • Ensure both parties delivered the same answers to the anticipated difficult questions from reporters.
  • Deflect erroneous perception of Galli as a “job-hopper.”


FitzGerald developed a comprehensive plan to ensure the news was delivered to Wall Street and the media as well as shareholders, customers and employees from both companies synchronously.  To combat the threat of negative coverage, we developed scripted documents to ensure all spokespeople stayed on message.  We also developed a media strategy to allow both CEOs to shine in standalone stories as well as joint articles.  Specifically, we completed the following:

  • Crafted detailed key messages for BOTH VerticalNet and Newell Rubbermaid spokespeople to follow during interviews.
  • Developed a compelling internal Q&A document for all spokespeople to follow.  VerticalNet and Newell spokespeople received media training together as well as separately.
  • Developed scripted answers to the five pressure points listed under “Challenges” to ensure spokespeople were fully prepared.
  • Developed a media strategy that ensured both stand-alone and joint coverage of both companies.   Divided up reporters into categories: reporters most likely to write a joint article, and those most likely to file a Newell story exclusively or a VerticalNet story exclusively.  The list of reporters was tiered to ensure that the most important daily reporters had immediate access to both spokespeople.
  • Developed letters from the Chairman of the Board from both companies, which were customized and sent to key shareholders, employees and customers informing them of the news.


FitzGerald’s PR and IR team was divided into two groups: one spearheading the Hagan announcement, the other focusing on the Galli announcement.  Each company issued its own press release on the new appointment, yet the releases offered complementary and synergistic messages around Galli’s role at VerticalNet and the reasons for his departure.  After the releases hit the wire at 6:00 AM, letters from the Board Chairman of both companies were e-mailed to employees, shareholders and customers.  Two separate taped conference calls were available for employees from both companies to hear the news in greater detail.  This was followed by individual department meetings at each company, where employees received an information packet (news release, FAQs, bios) on their new CEO.  After 8:30 AM, a succession of one-on-one calls with key financial analysts and reporters from national business dailies, wire services and online publications occurred.  

Reporters who follow Newell and the consumer goods industry exclusively as well as press from the Chicago area received one-on-one time with Galli.  Reporters who follow VerticalNet and the Internet industry exclusively as well as press from the Philadelphia area received one-on-one time with Hagan.  A handful of the most critical national media, including The Wall Street Journal and The New York Times, received joint interviews.  The afternoon was reserved for broadcast interviews with CNN and CNBC, among others, as well as longer lead print business media.  The following two days were spent briefing key trade media, additional longer lead targets as well as securing individual profile articles on Hagan and Galli. FitzGerald’s IR team ensured that financial analysts covering both companies were briefed via telephone as early in the morning as possible in order to ensure positive commentary from them.

More than 136 articles appeared in the national business press and more than 17 broadcast pieces aired for these announcements.  Major print coverage included both breaking news, feature articles and executive profiles in The Wall Street Journal, New York Times,, Forbes, Fortune, Associated Press, Reuters, Industry Standard, Red Herring, Upside, Chicago Tribune, Philadelphia Inquirer, and many others.  Broadcast coverage included interviews with Hagan and Galli on CNNfn, CNN’s Movers, CNBC Power Lunch, and CBS MarketWatch, among others.  After the announcement, Newell’s stock price went up nearly 5 percent while VerticalNet’s stock dipped by only 26 percent -- not the dramatic decrease the client originally feared.

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