Exec goes in for some blood work.

• Position: Laboratory Corporation of America; Thomas P. MacMahon

When Jim Powell resigned as president and CEO of Laboratory Corporation of America in January, it was a chance for new blood. LabCorp, the nation's biggest chain of clinical labs, had been pounded by a fraud scandal, troublesome merger and tumbling stock price. So did the Burlington company turn to an outsider to get it back on track?

No, it picked the man Powell reported to, Chairman Thomas P. Mac Mahon. "Maybe it isn't easy to find a new CEO," quips Robert Wasserman, an analyst with Southeast Research Partners in Boca Raton, Fla. That might be funny if LabCorp weren't so sick. "If you have these kinds of problems, you have to look hard at going outside," says one investment adviser.

LabCorp never did. Mac Mahon was its first choice. Two backup candidates also were insiders. A LabCorp spokesperson offers only this explanation: "The board offered the position to the individual who best understood the needs and requirements of the company."

A New Jersey native, Mac Mahon, 50, was on the Roche team that discovered Powell's company, then called Biomedical Reference Labs, and helped secure Roche's...