Departure of P&G Vice Chairman Shakes Up Management Ranks

Moves Pull Up Gillette Exec to Oversee Planning and Media Buying

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CINCINNATI (Adage.com) -- The departure of Vice Chairman R. Kerry Clark is forcing Procter & Gamble Co. to make a major shakeup in its senior management, as the company slims from five to four vice chairmen.
R. Kelly Clark, above, had been with P&G for 32 years and is the first top-five P&G executive to be lured away from the company in decades.
R. Kelly Clark, above, had been with P&G for 32 years and is the first top-five P&G executive to be lured away from the company in decades.

CEO of Cardinal Health Care
Mr. Clark, 54, who had been considered a possible successor to Chairman-CEO A.G. Lafley, 59, is leaving to become CEO of drug distributor Cardinal Health Care, P&G announced. His duties as vice chairman-global family and health care will be divided between fellow vice chairmen Susan E. Arnold, 52, and Bruce L. Byrnes, 58.

Jim Kilts remains vice chairman of the Gillette unit, but is widely expected to step down when his one-year contract with P&G is up in October. Vice Chairman of Global Operations Robert A. McDonald is the remaining front-runner, along with Ms. Arnold, to ultimately succeed Mr. Lafley.

In a research note, Deutsche Bank analyst William Schmitz said he believes Mr. Lafley will remain in the CEO post until at least 2009. Under P&G's executive compensation period, he's rewarded substantially for staying through the three-year period that ends then.

But the departure of Mr. Clark, the first top-five P&G executive to be lured away from the company in decades, sets off a chain reaction that strains and shuffles P&G's top management, including moving Rob Steele, 50, group president-North America, to new duties as president of household care, reporting to Mr. Byrnes and overseeing such brands as Bounty, Iams, Pringles and Folgers.

Gillette exec moves up
Replacing Mr. Steele will be Ed Shirley, 49, now president-international commercial operations for Gillette. As president-North America, the Gillette veteran will oversee P&G communications planning and media buying, multi-brand marketing initiatives and the sales force. The move delivers on P&G's statements made when it acquired Gillette last year that is will give incoming executives key roles.

Ms. Arnold will assume responsibility for health and oral care in addition to her current duties over global beauty care. Mr. Byrnes will add baby, tissue-towel and pet products to his duties, which also include overseeing household cleaning and P&G's small remaining snacks and beverage business.

"We will take this opportunity to realign our beauty and health businesses under Susan Arnold's leadership and combine all of our household and family businesses under Bruce Byrnes," Mr. Lafley said in a statement. He noted Mr. Clark's "tremendous contributions" in a 32-year career leading "virtually every P&G business category" and called Mr. Clark "the architect of P&G's developing-markets growth strategy."
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