In an Annual Ritual, P&G Reshuffles Top Ranks

Robert McDonald, Susan Arnold Get New Roles Directly Under CEO Lafley

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HOLLYWOOD, Fla. ( -- Procter & Gamble Co. has reshuffled its top management in a way that leaves little doubt about two things -- either Robert McDonald or Susan Arnold will be the next CEO, and executives from recently acquired Gillette won't be running much.
Photos: P&G

Robert McDonald and Susan Arnold

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In what's becoming something of an annual ritual, P&G is tweaking and pruning its organization chart in time for the upcoming July 1 fiscal year, naming Mr. McDonald, 53, chief operating officer. He had been vice chairman-global operations. Meanwhile, Ms. Arnold, also 53, who had been vice chairman-global beauty and health, was tapped as president of all P&G's global business units, adding the home- and family-care operations she didn't already oversee.

New executive tier
Both enter a newly created executive tier directly beneath CEO, putting a new layer between Chairman-CEO A.G. Lafley and several executives who had reported to him -- including Global Marketing Officer James Stengel.

This year's changes are unusually numerous and wide-ranging compared to years past, encompassing more than two dozen assignment changes or promotions and seven retirements of executives at president level or above, including one as young as 46. They come after P&G reported quarterly top-line results roughly in the middle of its global competitive set after the company has beaten most competitors for several years.

Mr. McDonald's duties expand to cover functional areas he didn't previously oversee, including marketing, research and development and external relations. Mr. Stengel, who had reported directly to Mr. Lafley, 60, will now report to Mr. McDonald instead, as will Global External Relations Officer Charlotte Otto and Global Technology Officer Gil Cloyd. Mr. McDonald becomes the company's first chief operating officer since Durk Jager, who later went on to become CEO.

Direct reports to Lafley
The moves sharply reduce the number of direct reports to Mr. Lafley from nearly a dozen down to three -- Mr. McDonald, Ms. Arnold and Chief Financial Officer Clayton Daley, 55, who gets a bump up to the vice chairman level.

Ms. Arnold adds to her oversight, though her role overseeing the combined beauty and health operations isn't exactly being replaced.

The health-care part of the business will go into a newly configured business unit, Global Health and Well-Being, which will include feminine care (which had been part of the beauty-care business), oral care, over-the-counter and prescription drugs, Pringles, Folgers and pet food. Robert A. Steele, 51, who had headed the global household-care business, will head the health-care business and be promoted to vice chairman.

Bruce Byrnes, 59, who was vice-chairman of global household care, has announced he'll retire next year, and he'll be succeeded by Dimitri Panayotopoulos, 55, who was group president-global fabric care.

Beauty-care business
The rest of the beauty-care business, which will continue to report to Ms. Arnold directly, will be run by three career P&G executives. They include:
  • Charles V. (Chip) Bergh, 49, who had been group president-global grooming, and now becomes group president-global personal care, adding responsibility for skin care, personal cleansing, cosmetics and deodorant to his duties. He'll continue to be based in Boston.
  • Christopher de Lapuente, 44, currently president-global hair care, who will add hair colorants, which had been managed along with the cosmetics business, to his duties.
  • Hartwig Langer, 51, president-global prestige products, whose duties remain unchanged.
P&G announced retirement of three of the six remaining top executives at the company who had come in with the Gillette acquisition, including Bruce Cleverly, 62, group president-global oral care; Mark Leckie, group president-Gillette business, 49; and Mary Anne Pesce, 55, group president-deodorants and personal cleansing.

People close to the Gillette executives said none wished to move to Cincinnati to take possible opportunities there as P&G consolidated most duties at its global headquarters, though Mr. Bergh remains based in Boston, the site of Gillette's former headquarters.

Remaining senior Gillette exec
The ranking remaining senior Gillette executive, Ed Shirley, 50, president-North America, remains in that role. But he was bypassed in the move to replace Mr. McDonald as vice chairman-global operations, by a career P&G executive, Werner Geissler, 54. He had been group president of Central and Eastern Europe, Middle East and Africa.

Among other key departures announced by P&G in a wide-ranging shuffle of management duties are Paolo De Cesare, 46, who has been president-global skin care; Fabrizio Freda, 49, president of global snacks, and Mark Collar, 54, who had been president-global pharmaceuticals.

Among key executives moving up to group-president level are:
  • Melanie Healey, 46, who moves from president-global feminine care to group president-global feminine and health care, reporting to Mr. Steele
  • Jorge Mesquita, 45, currently president-global health care, who moves up to group president-global fabric care, reporting to Mr. Panayotopoulos
  • Charles Pierce, 50, who goes from president-global oral care to group president-global oral care, coffee and snacks
  • Martin Riant, 48, who goes from president to group president-global baby care
  • David Taylor, 49, who goes from group president-global family care to group president-global family and household care, adding home care and the professional business to his duties
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