Bob McDonald has stepped down as chairman-CEO of Procter & Gamble to be replaced by his predecessor, A.G. Lafley. McDonald, in less than four years on the job, saw the company lose ground to key rivals and weather heavy investor criticism.
Despite investor pressure, the timing of the move, which is effective June 30, came as a surprise. McDonald and Chief Financial Officer Jon Moeller had been pointing to momentum behind the company’s nearly year-old turnaround plan, most recently at a Goldman Sachs investor conference last week. While down from recent highs, the company’s stock was still up 26% on the year, just behind the S&P 500.
McDonald, 59, was scheduled to speak at a P&G alumni reunion in Geneva, Switzerland, on Saturday. In an odd parallel, Lafley made an appearance at a P&G alumni reunion days after he took charge of the company for the first time, in 2000.
“Unless and until the board decides otherwise, A.G. will be the CEO with all the authority and responsibility that goes with the position,” P&G spokeswoman Jennifer Chelune said, noting that it’s not an interim assignment.
Lafley, 65, was most recently a partner with the private-equity firm Clayton Dubilier & Rice. His return signals what many company watchers had suspected — that P&G had yet to groom or identify a clear successor to McDonald.
P&G’s returning CEO, A.G. Lafley
“Bob chose to retire,” Ms. Chelune said. “This was his decision. … The board is confident A.G. is the right leader to build on P&G’s momentum and to continue to improve our results.”
She declined to make McDonald available for comment, and McDonald didn’t immediately respond to an email request for comment.
In a statement, Jim McNerney, lead director of P&G and chairman-CEO of Boeing Co., said: “We thank Bob for his service and note the Company’s improving business performance. Under his leadership, the Company expanded its business in developing markets, built a strong innovation pipeline, and has made substantial progress implementing a $10 billion cost savings and productivity program.”
P&G confirmed its fiscal year and fourth quarter guidance in the statement announcing the leadership change.
Lafley, who picked McDonald to succeed him and moved him ahead of several rivals in P&G’s hierarchy during his prior 10 years in the CEO post, said in the statement: “I wish Bob well, and thank him for his service to P&G. I am confident that we will deliver strong innovation, productivity and growth to win with consumers, customers and shareholders.”
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