In Surprise Move, Unilever Names Polman CEO
BATAVIA, Ohio (AdAge.com) -- In a stunning move that ratchets up already intense rivalries, Unilever is bringing in Paul Polman, who has been a senior executive within the past three years at two of the company's principal global rivals, as its new CEO.
Slightly less than a year ago, Mr. Polman, now exec VP-Americas for Nestle and then chief financial officer of the company, was passed over to become CEO of Nestle, a position that would have given him a hand in deciding whether Nestle would exercise its option to take control of another Unilever rival, L'Oreal.
He joined Nestle in 2005 from Procter & Gamble Co., where he also was once seen as a contender to ultimately become CEO after leading the turnaround of the company's struggling business in Western Europe. But he left after being leapfrogged in P&G's hierarchy by executives closer to Chairman-CEO A.G. Lafley, including current Chief Operating Officer Robert McDonald and President-Global Business Units Susan Arnold, now seen as leading candidates to succeed Mr. Lafley.
Instead, Mr. Polman, 52, will succeed Patrick Cescau, 59, sometime following extraordinary general meetings of the dual boards of the Anglo-Dutch company this fall. It has been customary for Unilever CEOs to announce their retirement plans when they turn 60, which Mr. Cescau does Sept. 27.
Interestingly, Unilever announced news of Mr. Polman's appointment hours before one of his former P&G colleagues, Mr. McDonald, widely considered front runner to succeed Mr. Lafley, was set to give a presentation this morning at an investor conference.
First time outsider takes helm
The move is stunning in another sense as well, as it marks the first time in its 123-year history that Unilever has gone outside for a chief executive. But it follows an extensive shakeup led by Mr. Cescau in recent years that has seen a complete overhaul of the company's top executive ranks, extensive hires from outside, appointment of an outside chairman in Michael Treschow and a senior leadership team that no longer includes any English or Dutch executives.
"Patrick [Cescau] has had an outstanding career," Mr. Treschow said in a statement. "We are greatly in his debt for the transformation he has brought about over the last four years. The business has improved markedly under his leadership."
Mr. Treschow called Mr. Polman a "great talent with significant international experience and an excellent track record. He has all the right attributes necessary to build on Patrick's achievement."
In his own statement, Mr. Cescau said, "Four years ago, we set out to transform Unilever and to get the business back on track. I believe that phase of work is largely complete, so now is exactly the right time to pass on the baton."
Career filled with surprises
Mr. Polman's appointment is the latest surprise in a career that has produced plenty of them lately. The decision by Nestle's board to pick company veteran Paul Bulcke over Mr. Polman last year surprised many, particularly among analysts and investors, who had been pleased by Mr. Polman's work as CFO. Two years earlier, Mr. Polman's abrupt shift from leadership of P&G's Western Europe business weeks after the company announced its acquisition of Gillette was equally surprising to many inside and outside the company.
"I was shocked and surprised when I walked in one day and heard that Paul was on special assignment and was going to be leaving the company," said one former P&G executive last year when Mr. Polman was under consideration for the Nestle CEO post. "It all seemed so abrupt. ... To this day, I don't know what happened or why. It was not one of those subjects you really pried into."
His appointment as CEO of Unilever now comes at a critical juncture for both companies, as they face rising commodity costs and slowing demand for many of their products. Unilever has been beating P&G in recent quarters globally on organic top-line growth, but last quarter saw all that growth come from price hikes as volume actually declined. Both companies have seen growth of the big, heavily extended beauty brands that have propelled them for the past decade slow of late, including P&G's Olay and Pantene and Unilever's Dove.
A rival and friend
Mr. Polman's accession at Unilever also could have big ramifications for senior executives at both companies. It comes as Mr. Lafley and P&G Chief Financial Officer Clayton Daley have accelerated restructuring efforts and discussed plans to "accelerate attrition" in the company's senior ranks in an effort to trim the number of executives at the general-manager level and above from around 360 to around 300. Now, many of those executives who were close to Mr. Polman at P&G suddenly have a friend at Unilever.
Mr. Polman was widely seen as a protege of Mr. Lafley's predecessor, Durk Jager, who spoke highly of Mr. Polman in an e-mail last year when he was being considered for Nestle's top job.
"He is a big-picture man," Mr. Jager wrote. "He is [a] future and results-oriented manager who cuts through the bureaucracy, the politics. He is a good marketer with interest in innovation."
Polman's ad approach
But he could also represent a big change for Unilever in terms of advertising approach. The company has been lauded in recent years in international creative competitions for work on such brands as Axe and Dove and has tended to rely far less than P&G on copy testing to pre-qualify ads. Mr. Polman was known for insisting on pre-qualification of ads in Europe, and expressed pride in raising those scores as part of the company's turnaround in Europe in a 2004 interview with Ad Age.