'I think there's a wisdom in term limits': The longtime CEO of $210 billion US drugmaker Merck just hinted he could soon step down
- Merck CEO Kenneth Frazier recently hinted that a next chapter for him could come sooner rather than later.
- Frazier said that he has had a "nice run ... But I think there's wisdom in term limits." The longtime lawyer and Merck employee also hinted at an interest in pursuing public service next.
- Merck has said that Frazier would stay on beyond December, and even changed a mandatory retirement policy to make it possible. But his latest comments cast into doubt just how much longer beyond that he might stay.
After almost a decade leading the US drug giant Merck, CEO Kenneth Frazier is hinting at a next act - and it could come sooner rather than later.
"Well I have to tell you, I am looking forward to the next chapter, I really am," he told a group at The New York City Bar last week.
"It's been a nice run at Merck. I think Merck has been a force for good in the world. But I think there's a wisdom in term limits, and I have been CEO now for nine years."
Frazier joined Merck in 1992 and has led the drugmaker since 2011, a remarkably successful time wherein the stock has more than doubled and the cancer drug Keytruda has become a dominant market force.
The latest comments suggest big change could be ahead, and counter the perception created last fall, when Merck's board changed its policy of mandatory retirement at 65 so Frazier could stay on beyond his 65th birthday in December 2019.
The drugmaker's board of directors said then that Frazier had agreed to stay on as CEO past December, which lead director Leslie A. Brun said would allow them "to make the best decision concerning the timing of that transition."
Frazier hinted at a next chapter in public service focused on 'the issue that I care the most about'
But just how much longer Frazier will stay on beyond that remains unclear. An unnamed source told Reuters last fall that Merck's board had prompted the policy change, not Frazier, so as not to rush the succession process.
Merck top leaders Adam Schechter and Rob Davis, the drugmaker's CFO, were brought up as potential next CEOs at the time, according to Reuters, although Schechter later stepped down from Merck at the end of 2018.
For his next chapter, Frazier said he might tackle something in public service, and said he hasn't yet decided what.
But he did emphasize his interest in and concern about racial disparities in education, which he said was "the issue that I care the most about."
The subject has been in the news of late, with New York City's top high school, Stuyvesant, accepting just seven black students for the nearly 900 slots available in its freshman class.
It's also deeply personal for Frazier, who is one of just three black CEOs in the Fortune 500.
Born right after the landmark school desegregation case Brown v. Board of Education, and raised in inner-city Philadelphia, Frazier describes his life as having been profoundly shaped by "social engineers" experimenting with a new way to desegregate schools.
Because of those people, whom Frazier would never meet, he would be bused across town each day to go to school. He credits the experience with giving him access to a rigorous education, one not necessarily available in his neighborhood.
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But he also worries about everyone who didn't get that opportunity. They include, by the way, his next-oldest brother, who is just two years older, but wasn't put on a bus to go to a different school.
"I have this feeling that in our society, we have to do something so that kids who were born in my neighborhood don't have to, by accident of social policy, have to ride a bus for 90 minutes to get a good education," he said.
