Coke Taps Former Executive as CEO
Coca-Cola Co., the world’s largest soft-drink maker, brought a former company executive, E. Neville Isdell, back from retirement to be chairman and chief executive after considering outside CEO candidates for the first time in its 118-year history.
The appointment Tuesday of Isdell, 60, who led the company’s European operations and retired in 2001 as head of the company’s second-largest bottler, is effective in early summer, the Atlanta-based company said.
The company began a search in February after Chairman and CEO Douglas Daft, 61, said he would retire by year’s end. Isdell was the only candidate offered the top job, director Donald Keough said. The company has struggled with U.S. soft-drink sales, which have gained less than 1% a year for the last five years. The firm trails rival PepsiCo Inc. in noncarbonated beverages.
“A lot of investors are going to be disappointed by this choice,” said Robert Van Brugge, an analyst with Sanford C. Bernstein & Co. in New York. “It’s a step in the wrong direction. The company needs somebody to shake up the culture internally and you’re not going to do that by bringing in the old guys.”
Coca-Cola President Steven Heyer, 53, Coca-Cola’s only internal candidate considered by the board, may leave the company, analysts including Morgan Stanley’s Bill Pecoriello said. A Coca-Cola spokesman didn’t return a call for comment.
In April, the three CEOs whom analysts and investors considered the top candidates for the Coke job -- Gillette Co.’s James Kilts, Mattel Inc.’s Robert Eckert and Kellogg Co.’s Carlos Gutierrez -- each removed himself from consideration.
Shares of Coca-Cola, which sells drinks in more than 200 countries, fell 35 cents to $50.27 on the New York Stock Exchange. The news was announced after the close of regular U.S. trading.
Isdell began at Coca-Cola in 1966 in Zambia before working in Australia and the European divisions and rising to group president in 1989. He became a senior vice president for Europe, the Middle East and Africa in 1995 and chairman of Coca-Cola Beverages in 1998.
In 2000, he took over as chief executive of Hellenic Bottling Co., which changed its name to Coca-Cola Hellenic Bottling Co. Since leaving in 2001, he has been president of his own private investment company and has served as an international consultant to Daft.
A lack of successful new products has kept Coca-Cola sales sluggish in key markets such as the U.S. and Japan. PepsiCo’s share of the U.S. soft-drink market rose to 31.8% last year, its highest level since 1992, while Coca-Cola’s share fell to 44%.
Coca-Cola’s sales gains have averaged 2.3% a year for the last five years as consumers have become bored with colas in what Pecoriello calls “cola fatigue.” In the same period, PepsiCo posted 3.8%-a-year sales gains.
