Procter & Gamble says CEO swap doesn’t signal ‘bigger problem’
Procter & Gamble Co. wants to make something clear to investors: The replacement of Chief Executive Bob McDonald with his predecessor A.G. Lafley is not a death knell for the company.
Far from it, said Chief Financial Officer Jon R. Moeller in a short conference call Friday, a day after the consumer goods giant announced that McDonald would retire on June 30.
The shift, effective immediately, “is not indicative of any kind of bigger problem or financial issue,” Moeller said. Lafley’s return “won’t result in a dramatic change in our strategy or priorities,” he added.
The company, which owns brands such as Pampers, Pantene, Duracell and Gillette, plans to keep pushing into developing markets and expanding its core business.
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Lafley, who served as chief executive from 2000 to 2009 before handing the seat to McDonald, just happened to be “currently the best person” to take over, Moeller said.
McDonald, however, had been plagued by concerns about languid performance and public dissent from activist investor Bill Ackman of Pershing Square Capital Management.
Some analysts suggest that McDonald’s departure mirrors, to a less dramatic extent, the replacement last month of J.C. Penney Chief Executive Ron Johnson with his predecessor Myron Ullman. Ackman is also a major investor in the retailer.
In Procter & Gamble’s statement Thursday, the board’s presiding director Jim McNerney said that Lafley is expected to “further improve results, implement the current productivity plan, and facilitate an ongoing succession process.”
And to prove its point, the Cincinnati company backed its financial guidance for the year.
Wall Street seemed soothed. P&G stock, which barely fluttered on Thursday, rose as much as 4.6% to $82.35 a share in morning trading Friday.
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