The company has retained Spencer Stuart to conduct a search involving internal and external candidates. Robert Matschullat, 58, 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, 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 last week; 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.
Cited among top possible external candidates is William Perez, 58, former CEO of privately held Clorox rival SC Johnson, who left as CEO of Nike earlier this year. But when contacted for comment, he demurred. "SCJ is a very good company, and I can't imagine competing against them, nor would I be interested in competing against them," he said.
A new CEO will inherit a Clorox that has been building share across most of its key categories-even in such highly commoditized businesses as bleach, charcoal and trash bags-behind an unusual combination of well-regarded analytic capabilities and creative advertising. But the company is smaller and far less global than its major competitors P&G, SCJ and Reckitt Benckiser.
And unlike those competitors, it has no stake in the faster-growing, higher-margin personal-care side of the business. P&G in particular has stepped up its game in Clorox's U.S. household cleaning categories in recent years. And the flagship bleach brand, which had faced competition only from private label, has a new branded threat from Unilever's All, now distributed only in Wal-Mart Stores.
Clorox shares fell 4.5% to $61.50 as it reported profit fell 6.8% to $110 million, or 72? a share, for the fiscal third quarter ended March 31. That was still a penny ahead of average analyst estimates of 71? a share.
Sales rose 7% to $1.2 billion, but volume was flat as consumers reacted to price hikes related to rising raw-material costs. Mr. Peiros said competitors hadn't followed all of Clorox's price increases in such categories as water filtration and household cleaners.
He said Clorox still had increased ad spending 6% in the quarter and plans continued spending increases behind launches, including the June introduction of Clorox Ultimate Care Bleach, which is billed as easier to use and gentle enough to be poured directly on white clothes.
Omnicom Group's DDB Worldwide, San Francisco, handles advertising and promotion support for all Clorox brands.
The inside track Some talked-about candidates to replace CEO Gerald Johnston are:
- Lawrence E. Peiros, 50, group VP-household care
- Beth Springer, 42, group VP-specialty products
- Frank A. Tataseo, 52, group VP-functional operations, (like Mr. Johnston, a veteran of Procter & Gamble Co. sales)