ATLANTA - Coca-Cola Co. said President Steve Heyer, passed over for chief executive officer, will leave in a few months as E. Neville Isdell puts his stamp on the world's largest soft-drink maker. Coke's shares had their biggest decline in three months.
Isdell, 61, who was named chairman and CEO on May 4, said in a statement: "We agreed that Steve could best realize his aspirations by pursuing opportunities outside of the company."
No replacement was named for Heyer, 51, a former Turner Broadcasting executive who revamped Coke's advertising, cut costs and brought in other outside executives in his three years at the 118-year-old company. Some directors didn't approve of his decision to push out senior executives, said analysts, including Morgan Stanley's William Pecoriello.
"Certainly, Wall Street thinks this is a huge loss," said Arthur Cecil, analyst with Baltimore-based T. Rowe Price Group Inc., which owns 6.5 million shares of Coca-Cola. "You have to feel there were board members who felt he [Heyer] didn't have a future at the company."
On May 18, Heyer said in a New York speech, "I think I have one of the best jobs in the world," and "I hope to play an important role" under Isdell.
The maker of Coca-Cola Classic and Sprite chose Isdell after a three-month search to replace Douglas Daft, 61, who said he would retire by year's end. The company has struggled with U.S. soft-drink sales gains of less than 1 percent a year the past five years, and it trails No. 2 PepsiCo Inc. in sales of noncarbonated beverages.
"I'm disappointed, because I'd hoped he would stay because he's an extremely bright guy who has already made very significant contributions to the progress of Coke," said Phillip Humann, chief executive officer of SunTrust Banks Inc.
SunTrust took Coca-Cola public in 1919, and the safe-deposit vault at the bank's main office in Atlanta contains the only written copy of the Coca-Cola formula. The company owned 48.3 million shares of Coca-Cola stock at the end of the first quarter.
Isdell, who spent 35 years at Coca-Cola and was mentored by former leader Roberto Goizueta until his 1997 death, said he plans to accelerate Coke's strategy of growing sales in emerging markets such as India and China, where per-capita consumption of soft-drinks remains far below that in the United States.
Shares of Coca-Cola fell 85 cents, or 1.6 percent, to close at $51.76 yesterday on the New York Stock Exchange, their biggest decline since March 11.
Board members didn't approve of Heyer's pushing out longtime Coca-Cola executives such as Jeff Dunn, who headed North American operations, said analysts including Pecoriello. Among other executives who have left since Heyer was appointed are Tom Moore, president of its soda-fountain business; Stephen Jones, formerly its top marketing officer; and General Counsel Deval Patrick.
Heyer likely will be courted for other CEO jobs among media or consumer-products companies, investors said.
Heyer joined Coca-Cola in March 2001 after starting 14 television networks and 19 Web sites as president and chief operating officer of Time Warner Inc.'s Turner Broadcasting System. Coca-Cola promoted him to president and chief operating officer in December 2002, putting him second in command.
Board members who passed over Heyer didn't want him as Isdell's heir apparent, said Pecoriello. The board includes multibillionaire investor Warren Buffett and former Coca-Cola President Donald Keough.