updated 5/19/2004 1:34:07 PM ET 2004-05-19T17:34:07

Procter & Gamble Co. announced a reorganization of its business units and a series of executive promotions and retirements Wednesday that illustrate the growing importance of the company's beauty care and home care product businesses.

The changes also increase the number of vice chairmen of P&G's board from two to four. That increases the pool of potential eventual successors to chief executive A.G. Lafley, who has directed the company's recovery from a slump in 2000 when he was hastily promoted to lead a turnaround.

Lafley, 56, has not announced any plans to retire. He inherited a company known for Tide detergent, Crest toothpaste, Pampers diapers and Folgers coffee. He has added the Clairol and Wella hair care products businesses and gotten rid of products including Jif peanut butter and Crisco shortening.

In its latest fiscal year, which ended June 30, P&G's earnings grew nearly 20 percent to $5.19 billion on sales of $43.4 billion. P&G's stock traded at $106.02 per share, down 4 cents, Wednesday on the New York Stock Exchange, near its 52-week high of $108.85. When Lafley became chief executive in June 2000, the stock had fallen 52 percent that year from a high of $118.37 to $56.75.

The realignment will create these main business units: global beauty care; global health, baby and family care, and global household care. The new global business units and the company's global operations now will each be headed by a vice chairman.

With the retirement of several officers expected over the next six to 12 months, management said it decided the realignment was needed to ensure a smooth transition.

Susan E. Arnold, 50, president for global personal beauty care and global feminine care, is being promoted to vice chairman for global beauty care. Robert A. McDonald, 50, currently president-global fabric & home care, becomes vice chairman for global operations.

Arnold's and McDonald's new vice chairman responsibilities will focus on business operations and do not include serving on the company's board of directors.

Bruce L. Byrnes, 56, currently vice chairman of the board and president-global beauty & feminine care and global health care, becomes vice chairman of the board and global household care.

R. Kerry Clark, 52, currently vice chairman of the board and president-global market development and business operations, becomes vice chairman of the board and global health, baby & family care. Clark was considered a candidate for the chief executive's job at Coca-Cola Co. until the Atlanta-based soft drink maker chose a former Coke executive this month.

"While some key managers are taking on new responsibilities, our strategies and structure are unchanged and we're maintaining significant continuity of leadership to drive further growth," Lafley said.

Additionally, the company is creating a new position of group president position to oversee P&G's regional businesses around the world.

The changes take effect July 1. They affect organization alignment only and will not result in any special charges against earnings, company officials said.

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