Succession Rumors Circle P&G, Unilever

CEOs Patrick Cescau and A.G. Lafley Show Signs of Stepping Down

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BATAVIA, Ohio ( -- As the going gets tough, are the CEOs about to get going?

Speculation is mounting that the chieftains of two of the world's biggest advertisers, Procter & Gamble Co. and Unilever, are laying plans to step down. Neither company will confirm or deny the chatter, and both have pointed to strong succession plans in place.
P&G Chief Operating Officer Robert McDonald is a likely successor to A.G. Lafley.
P&G Chief Operating Officer Robert McDonald is a likely successor to A.G. Lafley.

But the buzz has become so loud around Unilever that CEO Patrick Cescau, 59, was asked in an investor briefing last week to address reports he's preparing to leave next spring. His rather tepid response did little to dampen speculation. "Good companies have good processes," Mr. Cescau said. "It's very appropriate, it's very normal for Unilever to start a process of succession. ... News of my death [is] greatly exaggerated. ... I'm focused on continuing to drive this business to deliver."

Meanwhile, talk is swirling around Cincinnati that in December P&G will announce Chairman-CEO A.G. Lafley, 61, will step down as CEO next spring, though he may possibly continue to hold the chairman position for up to two years. "I'd be shocked if it didn't happen," said one P&G executive of a succession announcement regarding Mr. Lafley -- but then he noted speculation was just as rampant last year.

Rumors about a P&G succession have also been fueled by announcements since the start of the year that four global functional chiefs have left or are leaving, including Global Marketing Officer Jim Stengel. Also fueling speculation that Mr. Lafley will leave soon is that he and other top P&G executives just completed a three-year cycle in the company's bonus program.

Inheritors to throne
Several company watchers point to Chief Operating Officer Robert McDonald, 55, as Mr. Lafley's likely successor, though others believe President-Global Business Units Susan Arnold, 54, or others deeper on the company's bench could be named.

Other signs that some say point to his leaving are a lot less concrete. People close to Mr. Lafley, or who have met with him in recent months note a change in his outlook and demeanor. They say he appears more relaxed, less focused on P&G and more focused on a variety of outside interests.

"A.G. today, as he has been for the past eight years, is focused on continuing to drive the P&G business," a P&G spokesman said. "That has not changed over the past eight years, and it's not going to change in the future."

The scenario laid out by some people close to P&G is interesting, though entirely unconfirmed. They say next spring Mr. Lafley plans to take over either as an interim or permanent replacement for the president of his alma mater, Hamilton College, where he is chairman of the board. President Joan Hinde Stewart has announced plans to take a one-semester sabbatical in March.

"I haven't heard that at all," said a spokesman for Hamilton College, who later said the school's dean of faculty has been identified as interim president. He said Hamilton's last president similarly took a one-semester sabbatical after five years in office and returned as scheduled.

Search committee
At Unilever, people close to the company said it has retained U.K. recruiting firm Egon Zelender to search for a possible replacement for Mr. Cescau.

Vindi Banga
Harish Manwani

Vindi Banga and Harish Manwani are likely candidates to replace Unilever CEO Patrick Cescau.

One person familiar with the company said it's been customary for Unilever's chief executives to step down at the May annual general meeting after they reach 60, an age Mr. Cescau is one year shy of.

It would be difficult, the person said, for an outsider to navigate the complexities of Unilever's business and culture. That makes an internal candidate more likely, with two executives of Indian origin -- President-Foods, Home and Personal Care Vindi Banga and President-Asia, Africa, Central and Eastern Europe Harish Manwani -- seen as leading candidates.

Another person familiar with the industry termed the outside search a "benchmarking" effort more likely to confirm a choice of an internal candidate than to select an outsider.
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