McDonald out, Lafley back in at P&G
CINCINNATI — Alan George "A. G." Lafley has rejoined Procter & Gamble as president and CEO, the company announced late last week. He succeeds Bob McDonald, who makes his exit from the company after 33 years.
Lafley has also been elected to the board of directors and will serve as its chair. Lafley joined Procter & Gamble in 1977 and served as president and CEO from 2000 to 2009.
"A.G.’s track record and his depth of experience at P&G make him uniquely qualified to lead the company forward at this important time. The board expects A.G. to further improve results, implement the current productivity plan and facilitate an ongoing succession process. The board is confident that he will continue improving P&G’s performance,” said Jim McNerney, presiding director of P&G’s board.
Lafley speculated that McDonald's exit from P&G was due to "a number of personal reasons" in a Reuters report late Thursday night in immediate response to the sudden change. According to the same Reuters report, "the move comes as some investors have pushed for faster improvements from the maker of Tide detergent and Gillette razors. P&G unveiled a $10 billion restructuring program in February 2012. Since then, it has cut thousands of jobs and taken other steps to speed up its operations, improve its success with new products and do a better job in both fast-growing emerging markets and in larger, developed markets such as the United States."
McNerney, however, highlighted the company's "improving" business performance and added that under McDonald's leadership, P&G was able to expand its business in developing markets, build a strong innovation pipeline and make substantial progress implementing a $10 billion cost savings and productivity program.
“I wish Bob well, and thank him for his service to P&G. I am looking forward to working with P&G’s outstanding leadership team to continue to improve the company’s performance. I am confident that we will deliver strong innovation, productivity and growth to win with consumers, customers and shareholders,” added Lafley.
The move comes almost exactly a month after P&G made "steady progress" with third-quarter sales for 2013, which rose 2% as net earnings per share rose 7%.
“Top-line growth was in line with our expectations. Market shares improved broadly. Strong cost savings enabled us to exceed our outlook on the bottom line," said McDonald at the time. "We increased our dividend earlier this month, and we are now projecting to repurchase $6 billion in stock, which is at the high end of our estimated range. We expect further top-line improvement in the fourth quarter, driven by innovation and portfolio expansion, enabled by continued productivity improvement.”
“It has been a privilege to work with the people of Procter & Gamble to serve consumers around the world. I’m proud of what we have accomplished together, and I am confident in the company’s future,” said McDonald regarding his exit. He served as P&G's president and CEO from 2009 to 2013.