Susan Arnold to Retire From P&G

Departure Appears to Clear Way for Robert McDonald to Succeed A.G. Lafley as Chairman-CEO

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BATAVIA, Ohio ( -- Procter & Gamble Co. said Susan Arnold, president-global business units, will retire Sept. 1, a move that appears to give Chief Operating Officer Robert McDonald a clear path to succeed A.G. Lafley as chairman-CEO.

Susan Arnold
Susan Arnold Credit: P&G
Ms. Arnold won't be replaced; leaders of global business units who report to her will report to Mr. Lafley after she leaves.

Mr. McDonald, 55, oversees P&G's regional market-development operations, including media planning and buying, and functional heads, including Global Marketing Officer Marc Pritchard; his duties remain unchanged. He'll be the only remaining executive at the rank Ms. Arnold occupies.

Mr. Lafley, 61, has announced no plans regarding his retirement, though he dampened speculation that he might step down this year when asked a question on the subject at a December analyst conference. He and other P&G executives began a new three-year cycle in the company's compensation plan in July; he wouldn't get a full payout under terms of the plan if he left his post before July 2011.

Ms. Arnold and Mr. McDonald are both part of a group of executives who worked closely with Mr. Lafley in the company's laundry division in the 1980s and whose stock rose rapidly after Mr. Lafley became CEO in 2000.

"Susan has been an integral part of P&G's leadership team over the past decade," Mr. Lafley said in a statement. "She has also been an architect of the company's winning beauty strategy for the past decade. She's led the transformation of P&G into one of the world's leading beauty companies."

Head of beauty business
P&G said its beauty business has nearly tripled to $20 billion from $7 billion since Ms. Arnold became president of the company's personal-beauty-care business in 1999. Ms. Arnold also has been instrumental in developing top talent throughout P&G and is role model and coach for women inside and outside the company, Mr. Lafley said.

But the beauty business Ms. Arnold headed for so many years began slowing significantly more than a year before the recession began, and it became clear, following a corporate restructuring of divisions in 2007, that P&G's feminine-care business had played a significant role in fueling the unit's top-line growth in prior years.

In the most recently completed quarter, P&G beat its longtime global beauty nemesis L'Oreal on the top line with flat growth vs. L'Oreal's global organic-sales decline of 0.6%. But P&G was bested by most other global beauty and personal-care players on the top line, including Unilever, Johnson & Johnson and Beiersdorf.

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