business

Coke's President Could Start a Parade

Steve Heyer's departure may be just the beginning: Analysts think many of his managers might also split in the wake of the new CEO

By Dean Foust

The other shoe finally dropped in Coca-Cola's executive suite: On June 9, Coke (KO ) announced that President Steve Heyer -- who was recently passed over for the CEO's job -- would depart the soft-drink giant "by mutual agreement" to pursue "opportunities outside of the company." The move was hardly a surprise. When Heyer lost out in the succession race to replace CEO Douglas Daft, few analysts expected the headstrong 51-year-old executive to stick around given his obvious ambitions to become a CEO -- if not at Coke, then somewhere else. "It's pretty clear that Steve just wants to be a CEO," says one Coke insider.

And while some analysts had hoped that Heyer -- who was widely respected on Wall Street -- would be able to coexist with new CEO Neville Isdell, it quickly became apparent that the partnership wasn't going to work out. In his first week on the job, Isdell signaled he was taking a far more hands-on approach than Daft did, immediately naming a new head of human resources for Coke who reported directly to him, and not Heyer.

While Heyer's decision wasn't a big surprise, it will still have repercussions for Coke. The president was often credited by analysts for his work in reinvigorating Coke's lackluster marketing -- replacing the old syrupy ads with some edgier spots that were designed to appeal to the all-important teen market -- and his absence could leave a void there.

TWO-PERSON JOB?

  What's more, some analysts believe Heyer's departure could prompt a further exodus of the many managers that he recruited, including global-marketing chief Daniel Palumbo, innovation head Danny Strickland, and U.S. marketing star Esther Lee.

Still, expect Isdell to move fast to bring in his new team. It's unlikely that he'll name a direct successor to Heyer as president. Indeed, analysts are betting that Isdell will divide the job in two -- naming a head for North America and someone to oversee Coke's vast international operations.

Already, speculation is rising that Isdell will lure back Irial Finan -- a respected beverage executive who once served as CEO of Coke's second-largest bottler -- as head of Coke's international operations. The revolving door at Coke is likely to keep spinning for months to come.

Foust is BusinessWeek's Atlanta bureau chief

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE