From the pinnacles of power by Fortune editor at large Patricia Sellers
Type Size  -  +
July 29, 2008, 12:24 pm

Too many cooks in Martha’s kitchen?

Even as Martha Stewart’s new co-CEOs, Wenda Millard and Robin Marino, announced solid quarterly profits this morning, they have a raft of challenges ahead–a cloudy ad outlook, a sputtering merchandising deal with Kmart, and the inevitable ego-balancing that is part and parcel of any partnership at the top. Co-CEO set-ups such as this one at Martha Stewart Living Omnimedia (MSO) are so unusual that, among Fortune 500 companies over the past 10 years, only 15 such arrangements have existed. Analysts expressed skepticism about the power-sharing reorg last month after former CEO Susan Lyne departed suddenly. With the stock down 42% in the past 12 months, concerns linger, particularly as iron-willed Martha looms powerfully in the background.

On today’s conference call with investors, Charles Koppelman, MSLO’s chairman, said of the new duo at the top: “One plus one equals three.” But when Koppelman phoned me last month to talk about the set-up, he struggled to justify why this is an ideal arrangement for the company. Bob Daly and Terry Semel, the onetime co-heads of Warner Brothers, were a dream team, he noted. Indeed, Daly and Semel (who went on to lead Yahoo (YHOO) ) once ruled Hollywood, but they weren’t managing a publicly traded company, which is more challenging. Remember the doomed partnership of Sandy Weill and John Reed at Citigroup (C)? About that, Koppelman quipped, “Citigroup didn’t work because those two guys had one agenda—to get the other guy out!”

The logic at MSLO is that Millard and Marino, both 54, have clearly designated charges. Millard, who rose through the magazine industry before heading sales at Yahoo, oversees Martha’s magazines, television business, and Internet operations. Marino, who was president of Kate Spade and worked for a power couple (Kate and Andy) before joining MSLO three years ago, heads the vast merchandising businesses, which includes an ever-expanding list of retail partners such as Wal-Mart (WMT), Costco (COST) and Macy’s (M).

Meanwhile, Stewart, who is prohibited from serving as a corporate officer or director for five years by her 2006 SEC settlement, is solidifying her grip. She’s a member of her company’s new office of the chairman. When I asked Koppelman whether she’s more involved than ever, he laughed and said, “What a question!” Stewart holds 53% of her company’s stock, 91% of the votes, and ever-increasing sway.

To many Martha watchers, this seems like a lot of cooks in the kitchen. Says Koppelman in response:  “I’ll bet you that in three years, you’ll say ‘Wow! What a genius move!’” The wager? Dinner in 2011. Winner chooses the restaurant.

P.S. Robert Huang and Kevin Murai are co-CEOs of Synnex, a growing business processes company on the Fortune 500. Do you know any other co-CEOs who have successfully run a major company? What’s their secret?

CNNMoney.com Comment Policy: CNNMoney.com encourages you to add a comment to this discussion. You may not post any unlawful, threatening, libelous, defamatory, obscene, pornographic or other material that would violate the law. Please note that CNNMoney.com may edit comments for clarity or to keep out questionable or off-topic material. All comments should be relevant to the post and remain respectful of other authors and commenters. By submitting your comment, you hereby give CNNMoney.com the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying information via all forms of media now known or hereafter devised, worldwide, in perpetuity. CNNMoney.com Privacy Statement.
Sheryl Sandberg Sheryl Sandberg: Don't leave before you leave
COO of Facebook
Marlo Thomas Marlo Thomas: Why she gives to kids in need
National outreach director, St. Jude Children's Research Hospital
Carol Bartz Carol Bartz: Just deal with it!
CEO of Yahoo
From CEO to candidateFormer eBay boss Meg Whitman talks about her plans for California. Watch
Paula Deen's American dreamRestaurant entrepreneur and Food Network star shares her life story. Watch
Pattie SellersPatricia Sellers has written some of Fortune's most talked-about cover stories, including "Can Meg Whitman Save California?", Melinda Gates ("The $100 Billion Woman"), "MySpace Cowboys," Martha Stewart ("I cannot be destroyed"), Ted Turner ("Gone with the Wind") and Oprah Winfrey ("Oprah Inc."). And she has broken ground with insightful pieces on career management issues such as ego ("Get Over Yourself!"), and "Charisma: Do You Need It? Can You Get It?" Pattie chairs the annual Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business, philanthropy, government, academia, and the arts. And she has helped oversee Fortune's "Most Powerful Women in Business" cover package since its launch in 1998. She started at Fortune in 1984, covering the big consumer brand companies.
Subscribe to Postcards: RSS feed | email newsletter

Every year Fortune and the U.S. State Department sponsor the Global Women Leaders Mentoring Partnership, which brings rising-star women from developing countries to the U.S. to work closely with participants of the annual Fortune Most Powerful Women Summit - among them CEOs Andrea Jung of Avon, Ann Moore of Time Inc., and Ursula Burns of Xerox.
* : Time reflects local markets trading time.† - Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges.• Disclaimer
Powered by WordPress.com VIP.