The chairman of the company’s compensation committee, James McNerney, CEO of Boeing Co. (NYSE: BA), was reported by Bloomberg to be unhappy with McDonald after P&G was forced to cut its forecast three times in a year. The irony of that is best left to another day.
P&G announced a layoff of 5,700 employees last year, as well as other cost cutting measures totalling some $10 billion by 2016 to help offset rising commodity costs. That has certainly helped the company’s bottom line, but it’s nothing more than a near-term fix.
McDonald may also get a shareholder challenge led by activist investor William Ackman of Pershing Square Capital Management. Ackman’s hedge fund owns about 1% of P&G’s stock, and while he’s currently busy with Herbalife Ltd. (NYSE: HLF) and J.C. Penney Co. Inc. (NYSE: JCP), if he smells blood in the water here, McDonald could face a tough opponent. Ackman probably thinks he waited too long for results from his hand-picked CEO for Penney’s and is not likely to make that mistake again.
When the notion of replacing McDonald came up last year, many thought that it was premature. After all he’d been at the head of P&G for only about three years and those were the toughest years for the U.S. economy since the Great Depression. But as the quarters roll along and P&G’s performance doesn’t improve, McDonald’s tenure in the corner office gets shakier.
Shares of P&G hit a bottom of around $45 in May of 2009 and have since climbed to an all-time high of more than $82. But growth was pretty flat for the two year to January of 2013, when they turned sharply higher as commodity prices fell and the company’s cost reduction program showed some results. Neither force, however, demonstrates much of a strategic vision.
P&G’s shares are down about 4.8% in mid-afternoon trading today, at $78.05 in a 52-week range of $59.07 to $82.54.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
