Abruptly, P.&G. Chief Robert McDonald, 59, Ends Career of 33 Years and was being replaced by his predecessor, Alan G. Lafley, 65.
May 24, 2013 Leave a comment
May 23, 2013
Abruptly, P.&G. Chief Ends Career of 33 Years
In a surprise move, Procter & Gamble, the world’s biggest consumer products company, said on Thursday that its chief executive had resigned and was being replaced by his predecessor, Alan G. Lafley. Robert A. McDonald, 59, the company’s chief executive and president since 2009, notified the board a few days ago of his decision to retire, said a P.& G. spokesman, Paul Fox. Procter & Gamble had been under pressure from the prominent hedge fund manager William A. Ackman, who has criticized Mr. McDonald for the company’s poor stock performance. Mr. Ackman is known for publicly challenging management teams, having agitated for change at the likes of J. C. Penney and Fortune Brands. Mr. Fox said he was unaware of any health or personal reasons behind the abrupt decision by Mr. McDonald, who had worked at the company for 33 years. He also said that Mr. McDonald’s decision was not spurred by pressure from company directors.The company said that Mr. Lafley, 65, would immediately replace Mr. McDonald. Mr. Lafley served as chief executive and president from 2000 to 2010.
Mr. Fox said that members of the company’s board sought out Mr. Lafley after learning of Mr. McDonald’s decision. As part of his return to the company, Mr. Lafley was also elected chairman.
Mr. Ackman has made P.& G. one of his big bets. His 27.9 million shares, worth nearly $2.2 billion as of Thursday, are one of the largest investments that his hedge fund, Pershing Square Capital, has ever made.
He has argued that the company was burdened with bloat, inefficiency and excessive marketing expenses. Mr. McDonald has been one of his chief targets.
In a presentation this month, Mr. Ackman said that Mr. McDonald had been distracted by outside commitments, including seats on other organizations’ boards. He called upon Procter to replace Mr. McDonald if the company’s fortunes had not materially improved by the end of June.
“As we’ve said all along, we have confidence in the board of Procter & Gamble to do the right thing for the company and the shareholders,” Mr. Ackman said in a brief telephone interview on Thursday.
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