Procter & Gamble names new CEO
CINCINNATI — Procter & Gamble's (PG) group president for global beauty, grooming and healthcare will become the company's next chief executive on Nov. 1, the company said Tuesday.
David Taylor, 57, is a 35-year company veteran and North Carolina native. He's been widely seen as the heir apparent since January when he was given oversight of the beauty business in addition to grooming and healthcare, which combined are more than half the company's sales.
Current Chief Executive A.G. Lafley, 68, will remain as chairman of the company's board to smooth the leadership transition.
The change comes a little more than two years after Lafley came out of retirement to reboot P&G's operations. Lafley slashed more than 7,000 jobs and cut deals to sell or exit almost 100 laggard brands, but sales growth remains tepid.
Taylor joined P&G in 1980 and his early career was in manufacturing, including a stint running P&G's largest factory in the world in Mehoopany, Pa. He later took several management jobs in baby care, beauty and family care. He's been stationed in Asia, Europe and North America.
From 2007 to 2013, Taylor headed P&G's stalwart home care business before being tapped to oversee the company's highly profitable razor business and its health care unit.
Taylor declined an interview request through a spokesman. But he gave a wide-ranging perspective last fall on his career and his management philosophy during a recorded presentation at his old college.
Taylor discussed how he left a promising career after 12 years in plant management at P&G to "start over" as an assistant brand manager at 34. He wanted to learn from the brand-building side of the business and worked along side recent college graduates again after previously overseeing nearly 1,300 factory workers.
Taylor said it was the job of leader to clearly outline objectives, provide guidelines, but otherwise give subordinates wide latitude on how to achieve goals.
Taylor recalled in 2001, he was a new vice president of family care in Western Europe when he agreed to scrap a global advertising campaign for Bounty paper towels in the United Kingdom for an idea championed by his team in the country. The ads were not boosting sales in the U.K.
Local brand managers advocated a Monty Python-esque ad featuring two men dressed in drag, bumbling in a kitchen and making a mess before Bounty came to the rescue. Taylor sold the idea to top management back in Cincinnati. U.K. paper towel sales surged 25% that year and the campaign was rolled out in other markets.
"I've had bosses that are very prescriptive and I've found that very limiting, it didn't bring out the best in me," Taylor said. "The kind of leaders we have want to be engaged and have a conversation versus being told what to do."
Lafley's 2013 return to the helm was a calming influence, but analysts didn't expect him to remain for more than a few years.
Some Wall Street analysts have speculated since April that a leadership transition could occur by late summer, after the company announced the last of its major brand divestitures. But skeptics thought P&G should resolve more of its issues — closing brand sales and improving financial results — before breaking in a new CEO.
Lafley, who previously served as CEO from 2000 to 2009, returned to the executive suite after four inconsistent years at P&G under Bob McDonald, whose leadership was challenged by activist hedge fund manager Bill Ackman.
Since Lafley's return, he has focused on cost-cutting and simplifying the company's brand portfolio to faster-growing, core businesses, such as Tide detergent, Pamper diapers, Gillette razors and Crest toothpaste.
Earlier this month, Lafley secured a deal to carve out 43 beauty brands and merge them with New York-based Coty Inc. by December 2016. The pact delivered on a Lafley promise to have the bulk brand exits announced by the end of summer.
Still, a sluggish worldwide economy and unfavorable foreign exchange rates have overshadowed Lafley's turnaround progress.
Excluding one-time items, P&G is expected to report Thursday an $11.4 billion profit on sales of $76.4 billion for the fiscal year ended June 30, according to Bloomberg. That would compare to an $11.6 billion profit on annual sales of $83.1 billion in the same period a year earlier.
P&G's stubborn performance made some analysts believe Lafley would end up staying on longer.
"Sales growth has only decelerated since Mr. Lafley's return two years ago. ... As such we'd thought Mr. Lafley (and the Board) would surely prefer he stay on until the company was on firmer revenue footing," wrote Barclays analyst Lauren Lieberman, in a note to investors.
Bernstein analyst Ali Dibadj said the switch won't bring radical change.
"Although we continue to be supporters of A.G. Lafley, change at P&G is good," he wrote in a note to investors. "Taylor will be more continuity than change at P&G."