Coke narrows CEO candidates

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jim kilts is hotly tipped as top choice to become the next CEO at Coca-Cola Co. But the soft-drink giant's hurdles in snaring him might well be too high to overcome.

The Gillette chairman-CEO is one of four outside executives reportedly in contention to succeed the departing Doug Daft as chairman-CEO. Mr. Kilts was recommended by board member Warren Buffett, whose Berkshire Hathaway owns about 8% of Coca-Cola and 9% of Gillette. "Warren trusts him," said one high-ranking executive close to the company.

If one of those candidates is tapped, it likely marks the end of Steven J. Heyer's career at Coke. Mr. Heyer, currently president-chief operating officer, is the sole internal candidate, but increasingly looks like a long shot. His brash management style is said to have alienated several board members, including Mr. Buffett.

legacy of problems

At Gillette, Mr. Kilts inherited a legacy of problems, including a history of year-end trade promotions that helped the company hit ambitious sales and earnings targets but created oversupply. Citing what he called Gillette's past "cycle of doom" in promising ambitious earnings growth and then slashing marketing spending to hit targets, Mr. Kilts stopped providing earnings guidance to Wall Street.

Under his watch, Gillette underwent a sweeping review of all purchases, including advertising and media. That resulted in a shift of the marketer's $600 million global media account to WPP Group's MindShare in 2002. The company also cut costs while boosting ad spending.

A Kilts appointment at Coca-Cola "would be a positive for Coke but wouldn't hurt Gillette that much," said one industry analyst.

But those close to Mr. Kilts said he will only take the job if he is given free reign by the board to run the company. Mr. Kilts recently renewed his contract with Gillette and most observers agree that to get him, Coca-Cola would have to over-compensate him.

"We don't comment on rumors or speculation," a Gillette spokesman said, a softened stance from an earlier "Jim Kilts' only interest is Gillette" comment.

Other serious contenders for the post are R. Kerry Clark, vice chairman of Procter & Gamble Co., Robert Eckert, chairman-CEO of Mattel and Carlos Gutierrez, chairman-CEO of Kellogg Co. (see chart, P. 4). The names were first reported by The Wall Street Journal.

None of the candidates or board members could be reached; a spokeswoman from Coca-Cola referred calls to the board.

Mr. Gutierrez is credited with turning around the sleepy cereal giant in his five-year tenure as CEO through innovative product launches. While Mr. Eckert earned good marks as a brand-builder at Kraft Foods, he has not yet succeeded in re-energizing Mattel's Barbie and Matchbox franchises.

mixed reviews

Mr. Clark, once seen by some analysts as a strong contender to succeed P&G Chairman-CEO A.G. Lafley, gets decidedly mixed reviews. He heads the global business services unit that has spearheaded the controversial outsourcing of various functions.

Coca-Cola's board is under pressure to show progress on the succession, particularly after the company's recent marketing missteps with Dasani in the U.K., and being beaten to market by PepsiCo in announcing a mid-calorie soft drink.

contributing: jack neff

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