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Coke names new chairman and CEO

The Atlanta-based company said the board of directors tapped E. Neville Isdell to succeed Doug Daft, who announced in February that he would retire at the end of the year.
/ Source: The Associated Press

The Coca-Cola Co. named a former top official for one of its bottlers as its new chairman and chief executive on Tuesday, ending months of speculation over who would be the next leader of the world’s largest beverage maker.

The Atlanta-based company said the board of directors tapped E. Neville Isdell to succeed Doug Daft, who announced in February that he would retire at the end of the year.

The 60-year-old Isdell, an Irish citizen who joined Coke in 1966 before leaving in 2001, inherits a company that has posted strong results but has raised concerns among investors amid layoffs, key executive departures and federal investigations.

“The first thing I’m going to do is get my facts straight ... and make sure I know what the company’s issues are,” Isdell told reporters in a conference call.

The board’s decision came amid Coca-Cola’s inclusion of outside candidates for the first time ever in a search for a new CEO. The company opted to go with a former Coke insider, but passed over No. 2 executive Steve Heyer for the top job. The decision leaves an uncertain future for Heyer, the company’s chief operating officer and only internal candidate for the top job.

“I can’t second-guess how Steve feels about my appointment,” Isdell said, adding that he had not yet talked with Heyer about the decision. “You’ll have to ask him.”

Efforts to reach Heyer through a Coke spokesman were not successful.

“Steve and I don’t know each other well,” Isdell said. “One of the things I’m going to do is get to know Steve a little bit better.”

Donald Keough, a Coke director and leader of the company’s CEO search committee, said Isdell was the best choice for the top job because of his deep knowledge of the company. He brushed off suggestions from some observers that Coke should have picked an outsider to restore confidence in the company.

“This is not a popularity contest,” Keough said.

Isdell has his work cut out for him as he takes over a complex, multinational behemoth that still faces legal problems.

The Justice Department and Securities and Exchange Commission have been investigating fraud allegations involving the company’s business practices for nearly a year. A grand jury is hearing from witnesses.

The company laid off 3,700 people last year.

But among the strengths Isdell will have is the company’s strong results. In the first quarter, Coke reported that its profit soared 35 percent from a year ago.

“He’s coming into a company that’s making headlines and is at a challenging time now,” said Todd Stender, an analyst with Crowell, Weedon & Co. in Los Angeles. “The company right now is doing well, but internationally there are some issues.”

But, Stender added, “He’s a seasoned Coke employee. Experience-wise, it has been a good pick for someone who has worked from the inside of Coke.”

Isdell said that in the short-term he doesn’t plan any major changes with how Coke operates its global system. He also said he will work hard to expand the presence of trademark Coca-Cola in the United States.

“I in no way accept that the growth in Coca-Cola is in any way over,” Isdell said. “I believe that is the world’s greatest brand and there is significant growth to be had with Coke.”

Isdell joined the Coca-Cola system in Zambia. After holding positions of increasing responsibility in South Africa, Australia, and the Philippines, he was named president of the company’s Central European Division, based in Germany, in 1985, where he restructured the German bottling system to 30 franchises from 106 in just over three years.

In 1995, he was named president of the Greater Europe Group comprising territories accounting for nearly one-third of the company’s worldwide profits. Isdell left the company in 1998 to serve as chairman of Coca-Cola Beverages, a company that went public the same year.

In 2000, he negotiated a merger with Hellenic Bottling Company to form Coca-Cola HBC, at the time the world’s second-largest Coca-Cola bottler, and became its chief executive. He left CCHBC at the end of 2001.

Isdell has served on the boards of directors of Coca-Cola Enterprises, Coca-Cola Amatil, Coca-Cola Femsa, and British Telecom, and remains a director of Scottish and Newcastle Breweries.

The transition to his new role is expected to take place by early summer. Daft will assist in that process.

Coca-Cola shares fell 35 cents to close at $50.27 on the New York Stock Exchange, then gained 1 cent in extended trading.