Procter & Gamble Co. Chief Executive Officer Bob McDonald may not be the right person to lead the world’s largest consumer-products maker and the board may have to replace him, activist investor Bill Ackman told CNN.
“It’s unlikely that Bob McDonald is the right CEO for the company, based on his track record there,” Ackman said in an interview on the station’s website. He said he doesn’t think the senior executives have confidence in McDonald, who took over in July 2009.
Ackman bought a $1.8 billion stake in P&G in July, shortly after McDonald began a turnaround program that includes trimming $10 billion in costs through 2016 and renewing the company’s focus on top categories and markets. Ackman, who leads hedge fund Pershing Square Capital Management LP, has sought management changes and break-ups of companies including Fortune Brands Inc. and Canadian Pacific Railway Ltd.
Ackman told CNN he had some ideas of potential replacements for McDonald and that he would rely on the board to take needed action. The board probably is giving McDonald “a little more time,” though likely less than three years to show results, he said.
“If the current senior team can’t do it, we expect the board to make a change,” Ackman told CNN.
Ackman’s comments are “an unnecessary distraction” as P&G undertakes a turnaround, Paul Fox, a company spokesman, said today in a telephone interview
“The situation isn’t changed,” he said. “The board has made it clear that it supports Bob, the senior leadership team and our growth strategies.”
P&G, based in Cincinnati, rose 0.3 percent to $69.34 at the close in New York. The shares climbed 1.8 percent last year, trailing the 13 percent gain at Colgate-Palmolive Co. and the 15 percent increase at Kimberly-Clark Corp.