CEO OF THE YEAR DINNER: P&G’s A.G. Lafley Honored
September 1 2006 by Chief Executive
After the closing bell on July 12, more than 200 of
The 29-year P&G veteran was an “easy choice” for Chief Executive magazine’s selection panel, outgoing CEO of the Year George David, chairman and CEO of United Technologies, told the crowd. “A.G. Lafley is known for productivity, operating income, performance and most of all for P&G’s commitments to the highest standards of corporate governance and environmental stewardship,” said David. “Total shareholder return at P&G since he became CEO in 2000 is 60 percent-decisively over the Dow Industrial average of 16 percent for that time period-at a time of flatter markets for large cap companies in
NYSE President John Thain, United Technologies CEO and 2005 CEO of the Year
George David and CE Group and Butler International CEO Ed Kopko congratulate this
And shareholder return is just one measure of the revitalization engineered by Lafley at the 169-year old institution’s helm. Steering a strategy of cost-cutting coupled with product innovations, he reenergized core brands-including Pampers, Tide and Crest-plagued by flattened volumes and shrinking profit margins. Leading acquisitions of Clairol in 2001, Wella in 2003 and Gillette in 2005, he further strengthened the company’s product portfolio, bringing operating margins to an impressive 19.4 percent.
“We have been willing to change anything and everything,” noted Lafley, commenting on the intense global competition that spurred P&G’s strategy shifts. “I’m very cautious about using a word like transformation. But I think it’s a good way to describe the level and pace of change necessary for sustainable growth and consistent value creation.”
In accepting the CEO of the Year title, Lafley thanked P&G’s 135,000 employees, as well as his wife, Margaret, and family. “This recognition means a lot to me because it comes from peers,” he added. “Peers understand the challenges and responsibilities, ins and outs and ups and downs of being a CEO. And peers in my experience are always the toughest graders. They understand sustained growth, value creation, ongoing transformation and inspirational leadership are hard work.”
In closing, Lafley, urged business leaders to commit to good corporate citizenry and promised to continue P&G’s commitment to provide safe drinking water to children in impoverished regions of the globe. “We must not only sustain growth, we must also contribute to the sustainability of the world we live and work in,” he noted. “Of the world’s 100 largest economies, 42 are corporations. We need to ask ourselves how we can use our talent, technologies, human capital and global presence and experience to help ensure a sustainable future or people who need help and hope.