Clorox Chairman-CEO Gerald Johnston to Retire

Peiros Remains Interim Leader; Search on for Replacement

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CINCINNATI ( -- Clorox Co. Chairman-CEO Gerald E. Johnston will retire, the company said today, two months after he went on leave after suffering a heart attack.
Clorox has begun a search for candidates to replace retiring CEO Gerald Johnston.
Clorox has begun a search for candidates to replace retiring CEO Gerald Johnston.

Begins search
The company said in a statement that it has retained Spencer Stuart to conduct a search involving internal and external candidates to replace Mr. Johnston.

Robert Matschullat, 58, who has been interim chairman-CEO since Mr. Johnston went on leave, will continue in that capacity until a permanent CEO is named. Mr. Johnston had been CEO since 2003.

Among possible internal candidates for the position, according to people familiar with the company, are Lawrence E. Peiros, 50, group VP-household care, who participated along with Mr. Matschullat on Clorox's conference call today; Beth Springer, 42, group VP-specialty products; and Frank A. Tataseo, 52, group VP-functional operations and like Mr. Johnston a veteran of Procter & Gamble Co. sales who came up through Clorox's sales operations.

Ex-Nike CEO Perez a contender?
Among top possible external candidates is William Perez, former CEO of privately held Clorox rival SC Johnson, who left as CEO of Nike earlier this year. Mr. Matschullat declined to comment on how long it would take to find a replacement in the conference call.

Clorox shares fell 4.5% to $61.50 as the company also reported profit fell 6.8% to $110 million or 72 cents a share for the fiscal third quarter ended March 31. That was still a penny ahead of average analyst estimates of 71 cents a share, according to Reuters.

Sales rose 7% to $1.2 billion, but volume was flat as consumers reacted to several price hikes related to rising raw material costs. Mr. Peiros reported on the call that competitors had not followed all of Clorox's price increases in such categories as water filtration and household cleaners.

Increased ad spending
But he said Clorox still had increased ad spending 6% in the quarter and plans continued spending increases behind upcoming launches, including the June launch of Clorox Ultimate Care Bleach, which is billed as easier to use and gentle enough to be poured directly on white clothes.

Unilever's launch earlier this year of All Bleach at Wal-Mart Stores so far hasn't affected Clorox's business there substantially, Mr. Peiros said. And Clorox's latest "game changer" product launch, Clorox Anywhere everyday disinfectant, which the company says can be used on kitchen surfaces such as cutting boards to kill 99.9% of bacteria, is off to a strong start, he said.

Omnicom Group's DDB Worldwide, San Francisco, handles advertising and promotion support for all Clorox brands.
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