CEO Succession Field Opens as Ed Shirley Leaves P&G

July Departure Sets Up Horse Race Among Six Group Presidents; P&G Also Taps New Top North American Marketer

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Procter & Gamble Co. is shuffling key executives globally and in the U.S. as its top global beauty executive steps down and the company taps a new top marketer for North America to replace an executive now tasked with revamping the marketing organization.

Ed Shirley, 54, the most senior remaining executive who came into P&G from its 2005 acquisition of Gillette, will step down from his post as vice chairman-global beauty and grooming effective July 1. He will retire from P&G in January following a six-month special assignment in which he'll continue to report to Chairman-CEO Bob McDonald.

Ed Shirley
Ed Shirley

The departure of Mr. Shirley, the last remaining vice chairman younger than Mr. McDonald to leave the company, appears to leave a wide open field for CEO succession at P&G among several group presidents in their 40s and 50s. That's one indication Mr. McDonald, 57, plans to stay in the post for several more years, as prior P&G CEO successors have generally had two or three years of grooming in posts reporting directly to the CEO.

Meanwhile, Jodi Allen, who had been VP-North American baby care since 2008, has been named VP-North American operations and marketing. She'll report to Melanie Healey, group president-North America, and Marc Pritchard, global brand-building officer in that new role, where she succeeds Kirk Perry.

Mr. Perry has been promoted to president on special assignment, according to people familiar with the matter, where he'll lead a team of executives developing a plan to streamline how P&G's global business units and market development organizations work together. He'll report directly to Mr. McDonald and Global Human Resources Officer Moheet Nagrath. As such, he'll sit outside either of the organizations that could gain or lose clout in such a restructuring.

People close to P&G have expected the company to shift more people and resources to its North American market development organization, which runs marketing programs for multiple brands and handles media planning and buying, and away from the regional offices of global business units, which handle most brand advertising and product development.

Speaking at P&G's analyst conference in December, Werner Geissler, group president-global operations, referred to a plan to shift resources from the global to the regional units. "By taking out these resources, there's no one who can duplicate the work," Mr. Geissler said.

Mr. Perry's position appears similar to work Mr. Pritchard did as president-global strategy, productivity and growth in 2007 and 2008 before becoming CMO. But Mr. Pritchard's effort focused heavily outside the U.S., while people close to P&G expect Mr. Perry to focus more on North America.

Mr. Perry was among those in recent years spearheading a bigger role for the North American Market Development Organization, including growing multi-brand and corporate-branding efforts linked to the Winter Olympics and NFL. Like Ms. Allen, he headed the North American baby-care business before taking the North American marketing role.

Ms. Allen is perhaps best known for leading efforts to stem the social-media controversy surrounding the launch of Pampers Dry Max last year. Parents who didn't like the new diaper organized efforts to bring back the original version on Facebook and blamed the new diapers for causing severe diaper rash.

The controversy grew a year ago as it was picked up by consumer media, with the AP local TV stations around the country publicizing the controversy. Ms. Allen led daily team briefings on the issue for months as it unfolded, and it ultimately subsided after P&G took a tougher line with critics and particularly after the U.S. Consumer Product Safety Commission and its Canadian counterpart announced they found no link between Pampers and diaper rashes in September.

Pampers' share rebounded in the third quarter last year after appearing to take a hit from the publicity earlier. But Pampers share has been down since then as rival Kimberly-Clark Corp.'s Huggies also has had see-saw results in recent quarters as thrifty consumers turn to private labels, according to SymphonyIRI data from Deutsche Bank.

Globally, however, P&G's baby-care business has continued to be one of the company's fastest-growing units, with organic sales up 5% last quarter. Speaking at the analyst conference in December, Dimitri Panayotopoulos, vice chairman-global household care, said lessons learned in the U.S. helped prevent similar problems as P&G rolled Dry Max in Western Europe.

In the wake of Mr. Shirley's departure, P&G will consolidate oversight of all its global business units under Mr. Panayotopoulos, who will become vice chairman, global business units. The move doesn't affect duties of the other remaining vice chairman, Mr. Geissler, who oversees global operations such as sales, multi-brand local and regional marketing and media purchasing.

Mr. Panayotopoulos, 59, and Mr. Geissler, 58, both are older than Mr. McDonald, making them unlikely to succeed him. That leaves several group presidents vying for future consideration should P&G eventually repopulate the vice-chairman level or designate a clear CEO successor.

One of them is Ms. Healey, 50, who recently added some global duties overseeing relations with big-box retailers such as Wal-Mart Stores and Carrefour to her North American role. Among other top group presidents who appear to be CEO candidates are Gina Drosos (Beauty), 48; Deb Henretta (Asia), 50; Jorge Mesquita(Fabric Care), 49; Martin Riant (Baby Care), 52; and David Taylor (Home Care), 52. Ms. Healey, Ms. Henretta, Mr. Mesquita and Mr. Riant all have substantial experience while stationed outside the U.S., which has become one key marker for P&G CEOs in recent decades.

Mr. Shirley is the second P&G vice chairman to announce his retirement in just over three months after Rob Steele, 55, said he would step down. Mr. Steele is on special assignment as vice chairman, health-care strategy through Sept. 1.

Mr. Steele told Advertising Age in February, "I've been at P&G for 35 years, and my goal is to be CEO. That's not going to happen at P&G. And I thought it was smart to help with the transition. But I thought if I'm ever going to be a CEO at another company, I should make the attempt now."

Mr. Shirley, too, turns 55 before his retirement date at P&G. He didn't return a call and email for comment by deadline.

One person close to Mr. Shirley said the Gillette veteran at one time believed he had a chance to become CEO of P&G. This person said Mr. Shirley, like Mr. Steele, would be a strong candidate for a number of top posts in consumer products.

P&G spokesman Paul Fox, who has worked with Mr. Shirley since their days at Gillette, said of Mr. Shirley: "He's had a 33-year career. He feels now it's the right time to step down. He feels his work in setting the strategy and vision for beauty and grooming is delivering and is confident it will continue to deliver. He doesn't have any plans right now. But after a 33-year career, I think he's looking forward to a well-earned rest."

The high-profile units Mr. Shirley led had grown three big acquisitions last decade for which P&G paid close to $80 billion collectively. But they had lagged top-line results for the rest of the company and key competitors in years prior to and after Mr. Shirley taking charge of them in 2008.

Mr. Shirley reorganized the businesses along consumer lines -- dividing them into the female beauty and male-grooming businesses. And Mr. Fox noted that those units have had seven consecutive quarters of organic sales growth. Last quarter, they delivered their best results yet on Mr. Shirley's watch, with the female-beauty business matching overall company organic sales growth at 4% and maintaining market share broadly, and the men's grooming business exceeding company results with 7% growth and gaining share globally, according to Mr. McDonald in an earnings press briefing last week.

"He's been an outstanding leader," Mr. Fox said. "And while he is the last of the original Gillette leadership team to leave, since that time many former Gillette employees have become key leaders within P&G."

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