Coca-Cola CEO running out of fizz
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Daft will end 30 years with Coca-Cola when he retires this year.
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ATLANTA (Reuters) -- Coca-Cola Co. CEO Doug Daft, who has been dogged by government probes, disappointing sales and an anemic stock price, will retire at the end of 2004, the world's largest soft drink maker says.
Atlanta-based Coca-Cola said Thursday that President and Chief Operating Officer Steve Heyer, who in December took control of operations in the huge North American market, would be a strong internal candidate to take over as chairman and chief executive.
Sluggish sales of Coke's soft drinks and other products, particularly in the No. 1 market of North America, taxed Daft's tenure as CEO and kept a lid on the stock price he had been hired to revive.
Investors and analysts gave the news a mixed reception.
"I think that fresh blood will really be good for the company," said Ted Parrish, co-manager of the Henssler Equity Fund of nearby Marietta, Georgia.
"It's been the same old boring Coke for quite a while. They need to shake it up a bit and see if they still have the fizz," said Parrish, who does not own any Coca-Cola shares.
"This is a real surprise," said Knox Fuqua, fund manager at the $20 million AAM Equity Fund, who said Coca-Cola was probably his biggest holding. "I don't want to see Coke go through another management change. I felt they had turned the corner."
Company officials expressed confidence in Heyer, who "has made a lot of important contributions to this company," Coke board member Jimmy Williams said in a conference call. "We feel good about him."
Williams said the impending departure of Daft, an Australian with more than 30 years of service at the company, was unrelated to federal probes into allegations that the soft drink maker improperly inflated earnings and engaged in other corporate wrongdoing.
The Securities and Exchange Commission and Justice Department began investigating the soft drink maker last year after a former Coke employee accused the company of fraud in lawsuits against the company.
Daft said in a statement released by the company that the unexpected retirement was consistent with his own wishes. Another Coke board member said Daft had informed senior company officials of his desire to retire at the end of 2004.
The changing of the guard comes four years after Coca-Cola ushered Daft into the top job with much fanfare following the resignation of former Chairman and Chief Executive Douglas Ivester.
Under Daft, Coca-Cola (KO: Research, Estimates) cut thousands of jobs in a series of restructurings designed to decentralize operations and make its business more efficient and prosperous in its more than 200 markets around the world.
Several veteran managers, including former President and Chief Operating Officer Jack Stahl, left the company during the Daft era, prompting questions about Daft's ability to get along with others.
But Daft did get credit from some analysts for settling an embarrassing racial discrimination lawsuit filed by black employees; improving the soft-drink maker's relationship with bottlers and overseas regulators; and embracing product innovation as a cornerstone of Coca-Cola's growth strategy.
In a separate announcement on Thursday, Coca-Cola announced that Don Keough -- considered one of the most powerful and influential former Coke executives -- had been elected to its board of directors.
Keough, who became president and chief operating officer of Coca-Cola in 1981 and retired from the company in 1993, has been a key adviser to the company's management team for the past decade.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
