The decision is released in a statement, with no comment on the turmoil the soft-drink giant has faced in the past year.
By Associated Press
Published February 20, 2004
ATLANTA - Coca-Cola Co. chairman and chief executive Doug Daft said Thursday he plans to retire at the end of 2004, a surprise announcement that caps a year of layoffs, management changes and legal turmoil at the world's largest beverage maker.
Daft, 60, did not elaborate on his decision in a statement issued by the company and did not make himself available for further comment. A board member said Daft felt it is the right time for him to leave.
In his statement, Daft said Coke has faced significant challenges since he was appointed in 1999 to the top position at Coca-Cola.
"Today our brands are stronger and our global production and marketing system has been restored to health," the statement said. "I am proud of what we have accomplished."
Over the past 12 months, however, Coke has faced upheaval.
The Atlanta company faces a criminal investigation by federal prosecutors into fraud allegations raised in a whistleblower lawsuit. The Securities and Exchange Commission also is investigating.
Last March, the company laid off 1,000 people and has made several top-level management changes since then.
This month, Coretha Rushing, the woman tapped to head Coca-Cola's human resources department four years ago as the company grappled with a costly racial discrimination suit, said she is resigning. In December, Jeff Dunn, the head of Coca-Cola Co.'s North America division who oversaw the restructuring and layoffs, said he would leave the company.
And last August, Tom Moore, a Coca-Cola executive accused in the whistleblower lawsuit of sham accounting and rigging a marketing test, stepped down.
Daft did not say if the investigation led to his decision, but board member Jimmy Williams insisted that the investigation had nothing to do with Daft's move.
"Everything's positive," Williams said.
Williams said Daft told the board when he took the job that he wanted to stay four or five years. Last October, Daft told the board he was seriously thinking about retirement, then came to the board a final time on Wednesday and said he would be leaving, Williams said.
Daft said he would assist the board of directors in its search for his successor. No time frame was set for the process to be completed.
Todd Stender, an analyst with Crowell, Weedon and Co. in Los Angeles, said the news took him by surprise.
"He's had an uproad battle since he came in 1999," Stender said. "The company went through a restructuring for the five years he's been there. He had a difficult time integrating the company on a global basis. Now that the company is turning around it looks like he is ready to hand the reins over."
Daft said the board will hire a search firm and will consider candidates from both outside and within the company, including president and chief operating officer Steve Heyer, Coke's No. 2 executive.
As to Heyer possibly taking over the top job, Williams said there has been no decision.
"He's a strong internal candidate and he's doing a superb job," Williams said. "We just want to be sure we get the best candidate for the company. While Steve is a good contender, we want to know what else is out there."
In his lawsuit against the company, former Coke manager Matthew Whitley alleged that he was laid off a month after he sent a memo to Heyer detailing allegations of widespread fraud at Coke. In October, Whitley settled his wrongful termination lawsuit against Coke for $540,000. He said at the time he would continue to cooperate in the criminal investigation.
In his lawsuit, Whitley claimed Coke rigged a marketing test. Coke has since admitted that some of its employees undermined the marketing test at Burger King restaurants in Virginia in 2000.
Coke's auditing committee, however, said it found no evidence of more serious allegations in the lawsuit, including Whitley's claim that Coke improperly shifted $4-million in capital funding to a soda fountain project.
Asked if Heyer's mention in the lawsuit has anything to do with Coke's decision to include candidates from outside the company in its search to replace Daft, director Williams said, "I can tell you absolutely not."
