Coke to put fizz back as Daft leaves

SOFT DRINKS giant Coca-Cola is for the first time in years considering external candidates to take over from chief executive Doug Daft, who is leaving after failing to lift the company's sales and share price.

While internal candidates are already lining up for the top job, the winner will have no easy ride. The company has failed to lift its performance for more than five years.

Coke said it would also be looking outside the firm for replacement for Daft, an admission according to some analysts that Coke knows it needs a big shake-up. But an internal succession has not been ruled out.

Daft himself said Steve Heyer, New York Coke's president and chief operating officer, was a candidate to take over the job. While his appointment is far from automatic, senior Coke officials were keeping the door open, endorsing him as a reliable pair of hands.

Board member Jimmy Williams said Heyer had made valuable contributions to the company and 'we feel good about him'.

Daft is the second chief executive to leave early after Douglas Ivester resigned suddenly in 2000. When Daft, a 60-year-old Australian who has been with Coke for 30 years, took over, the share price stood at $52.31 (£28.52). Yesterday it was slightly lower, at $51, having slipped as low as $37.01 during his tenure at the top.

Coke has been battling weak American sales and was hit last year by a Securities and Exchange and Justice Department investigation into allegations of widespread fraud against it by a former employee.

However, the soft drinks maker said Daft's departure had nothing to do with the investigations.

'I think fresh blood will really be good for the company,' said Ted Parish, co- manager of the Henssler Equity Fund.

'It's been the same old boring Coke for quite a while. They need to shake it up a bit and see if they still have the fizz.' But some observers were disconcerted by the chief exec's abrupt departure.

'Not only is this sooner than expected, but we are surprised the board has chosen to open up the succession planning to consider outside candidates,' said Marc Cohen, analyst at Goldman Sachs.

Indicative of Coke's malaise has been the thousands of job cuts carried out by Daft, who restructured the company to make it more efficient in more than 200 markets around the world.

At the same time, an exodus of top executives with decades of experience with the company, such as former president Jack Stahl, threw doubt on Daft's ability to work with colleagues.