New York, Dec. 12: The Coca-Cola Co. said Wednesday that it had named Steven J. Heyer, who joined the company in 2001, president and chief operating officer. The positions had been empty since May 2001, when Coke’s former president abruptly resigned.
The appointment ends, at least temporarily, more than a year of speculation about the future of Heyer.
Despite Coke’s long tradition of picking senior executives from the ranks of the company faithful, Heyer left his post as president and chief operating officer at AOL Time Warner's Turner Broadcasting unit to head Coca-Cola Ventures. In May, he was tapped to lead Coke's embattled Latin American unit.
But Heyer has always seemed destined for something more. Since his arrival, Heyer has been hailed by the beverage industry and several Coke insiders as the likely successor to Douglas N. Daft, the chairman and chief executive. Talk of Heyer's advancement to the No. 2 job accelerated in the past few weeks as investors looked toward a December 18 board meeting in which the directors were expected to discuss the fate of several senior executives, including Heyer. But the board voted on Heyer's appointment Wednesday, in part because Coke executives wanted to fill the position before a meeting with Wall Street analysts on Friday, the company said. Daft said he wanted to use Coke's upcoming analysts' meeting to focus on company business, not industry gossip. He also said Heyer's appointment was crucial in terms of building a management team to lead the company in 2003.
“It's critical that the team operate in the year 2003,'' Daft said Wednesday in a telephone interview. “You don't want to make changes throughout the year.”
When Jack L. Stahl resigned as Coke’s president in 2001, Daft was deliberately slow in naming a replacement, saying he needed time to let the organisation evolve. But within a few months, Daft reached into Coke's past and asked Brian G. Dyson, a former Coke executive with more than 30 years at the company, to serve for two years. On Wednesday, Daft said he had not hired Heyer with the intention of promoting him to the presidency. But he said he was impressed with Heyer's operations and marketing abilities and team leadership skills during the initial interview process.
In his new job, Heyer, 50, will wield considerably more authority as he focuses on improving global operations. On Wednesday, he said he was excited about his new position.
“When I came into the Coca-Cola Company, I came in with two promises,” Heyer said. “That I could work for Doug. The second one was that Doug was going to stick around for a long time. Doug has kept those promises, so as far as I'm concerned, my ambitions have been paid in full. If this is my last job at the Coca-Cola Co, that's great.”
Both Daft, 59, and Heyer will face significant challenges as they seek to expand their business in an increasingly difficult economic environment, analysts said.
In October, the company said it would not meet earnings expectations for the year because of weakness in Latin America and foul weather in several foreign markets. Analysts have described Heyer as aggressive and as a possible solution to Coke's challenges. They expect him to make bold moves to increase volume, improve the financial standing of Coke's bottlers and increase profits, perhaps even by acquisition.
“Clearly he has a strategy that's not yet been revealed to Wall Street,” one investment banker said.
“I've got to believe that he's going to do something transformative.”
While few on Wall Street were surprised by Heyer's appointment, some analysts said his accomplishments at Coke had been relatively modest since his arrival.
Heyer has spent a considerable amount of time creating a new marketing campaign for Coca-Cola Classic. The campaign is scheduled to make its debut early next year.
“We've heard a lot about this campaign, but until it's really out there this is the first thing that is directly attributable to Steve Heyer, and we haven't seen it yet,” said John A. Faucher, a beverage analyst at J. P. Morgan Securities. “Obviously the impact that he's having on the organisation in terms of shaking things up is what we know about him, and that's a little less concrete.”
Heyer's promotion refueled speculation about whether he will eventually take the reins of Coke.
“Whether Heyer ever becomes CEO is a question for the future,” said John D. Sicher, the editor and publisher of Beverage Digest. “He first has to succeed at being COO, but he would certainly also have to be considered a strong candidate some day. However, I think that Daft will remain chairman and CEO for