Succession’s fourth season is about to debut on HBO, we can’t help reflecting on what this modern version of King Lear has to teach us about estate planning.
King Lear Can’t Choose a Successor
Succession opens with family patriarch Logan Roy on his 80th birthday. There is the suggestion that Logan is ready for a succession plan that will ease his second son Kendall into the top spot in the family business. The family business in this case is Waystar Royco, a hybrid of ABC (which owns Disney) and Fox News (which has a conservative media empire). Waystar Royco is a publicly traded company and as we learn in future episodes, the stock market perceives Logan as such a visionary force that when he is temporarily incapacitated, the stock price plummets.
Let’s meet some of the other players in the game of Succession
Kendall rolls up to the business meeting in his chauffeured car, where he’s been getting pumped up by the Beastie Boys song “Letter to New York.” He’s there to acquire an internet site, Vaulter, which he thinks will help him make his bones as the soon-to-be CEO of Waystar Royco. “You the man,” his driver assures him. Is he though? Kendall and his team are meeting with Kenneth, the man who built Vaulter from the ground up. From the get go, Kendall is awkward, peppering his comments with slang like “shizz” that is years out of date. Kenneth wastes no time turning down Kendall’s offer, reminding him that he built his own company while Kendall is just a failson who once had a drug problem.
The family eventually arrives at Logan’s Manhattan apartment for a birthday celebration. This is where things get interesting. Daughter Shiv is a liberal political operative who is dating one of the Waystar Royco executives, Tom. Tom is overthinking the birthday present he bought for Logan, a $15,000 watch. Shiv warned him that her father isn’t all that interested in things, but Tom wants to impress his future father-in-law with a gift that says “please make me head of the company’s international division plus parks.”
Shiv has never worked for the company but lets her father know she would be interested in the top spot. Logan suggests that she could perhaps have the position Tom is interested in. That’s a clue to how Logan pits the players against each other to see what they’re made of.
Youngest son Roman is just back from the West Coast, where he failed to get the family movie business off the ground. Roman has plenty of barbs for everyone but like Shiv, he also lets dear old dad know he’d be interested in the top spot - or the COO slot, should it become open. The CFO position is held by Frank, an advisor who has stood by Logan for 30 years. We quickly learn that the real reason Roman wants COO is that he worked for Frank in Los Angeles and didn’t like having his wings clipped. So it would be worth it to him to see Frank deposed in his favor.
Then there’s Logan’s oldest son Connor, who is the odd man out. Unlike his siblings, Connor is the progeny of Logan’s first marriage and he’s also never been inside at Waystar Royco. Connor just wants his father’s attention and he tries to get it by giving Logan a spectacular gift, a sourdough bread starter. Or as Logan puts it “Bread? Goo?”
By the episode’s end, Logan has pulled the rug out from under Kendall, informing him that he’s decided not to retire for maybe five or even ten years. (Remember, this man is 80). He tells the Roy children he’s making some changes to the family trust - he intends to give his current wife Marcia his voting shares when he dies, in addition to the vote she currently has. The kids immediately balk, since that means she would have two board votes to their single votes. He gives them until 4:00 pm to sign off on the trust changes. Meanwhile, he decides to dump Frank to get Roman back on board. The episode ends with Logan suffering a medical emergency.
What is Succession Planning?
When you own a family business, regardless of whether it is closely held or public, a succession plan is part of your broader estate plan. Succession plans describe how the business will operate if you die or are incapacitated. Who will run the company in your absence? Logan’s medical emergency comes at a critical time, with the media reporting that Kendall was about to take over. But Logan had already changed his mind about that and the company’s formal succession plan doesn’t hand the keys to Kendall. Instead, Frank and other non-family employees are in charge.
Logan is a prototypical visionary leader who has the inability to let go of his own power and his own story. Logan’s story is that of a Scottish immigrant who pulled himself up by his bootstraps, becoming such a force that he can help decide who becomes president. When he looks at his children, who grew up with a silver spoon in their mouths, he sees them as inherently inferior to himself. Logan has a problem that is common among older generations who started their own companies - they believe they will live forever. This tends to delay important decision-making.
A company owner who wants to leave his business to the family has a tough decision to make because someone has to be in charge, but whoever doesn’t get the nod might not take it well. The Roy children are venomous toward Marcia, who they perceive as a usurper who is out to dilute their inheritance.
Power of Attorney and Advanced Directives
When Logan suffers a stroke he is incapacitated. Thankfully he had already created all the important legal documents for that situation. Marcia has his power of attorney and healthcare proxies. This means she’s in full control of his care. Although the Roy children may not be thrilled with this development, Marica wields her power to shield Logan from their shenanigans while he recovers and solidifies her own power within the Waystar Royco empire.
If you’re a business owner, your plan should consider everything that will happen if you are incapacitated, including who makes decisions about your care and who controls the business while you recuperate. The same lessons are true if you are a stockholder in a big corporation. You need a good understanding of the company’s succession plan and your role in it before you can make decisions about your own shares. The parties quickly convene at the hospital to figure out who is in charge. Gerri, the corporate counsel, wants Kendall’s input. When Kendall says none of the changes Logan made that day are in writing, so maybe they never happened, she agrees that it would be easier to just roll back those changes: Frank isn’t fired, Kendall as temporary CEO. (Of course in future episodes, once Logan is well enough to realize that Kendall is making aggressive moves, he wrests power back from his children once again.)
Questions to Ask Yourself About Business Succession
When you’re making a business succession plan, ask yourself the following questions:
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Do I want the company passed down to family or chosen successors? Alternatively, do I prefer to sell the business in order to liquidate its assets?
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Does the business have a good long-term plan to maintain its value and continue to grow?
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Can I identify key players who are able to handle the finances of the company? What about people who can manage its operations?
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