Abruptly, P.&G. Chief Robert McDonald, 59, Ends Career of 33 Years and was being replaced by his predecessor, Alan G. Lafley, 65.

May 23, 2013

Abruptly, P.&G. Chief Ends Career of 33 Years

By MICHAEL J. de la MERCED

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.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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