Lafley In, McDonald Out at Procter & Gamble

Bill Ackman got his way after all. Former Procter & Gamble chairman and CEO AG Lafley has rejoined the company as CEO, effective immediately. He replaced Bob McDonald who retired.

“AG.’s track record and his depth of experience at P&G make him uniquely qualified to lead the company forward at this important time,” said Jim McNerney, presiding director of P&G’s board of directors. “The board expects AG to further improve results, implement the current productivity plan, and facilitate an ongoing succession process. The board is confident that he will continue improving P&G’s performance.”

Mr. McNerney added, “We thank Bob for his service and note the company’s improving business performance. Under his leadership, the company expanded its business in developing markets, built a strong innovation pipeline, and has made substantial progress implementing a $10 billion cost savings and productivity program.”

Despite these successes, McDonald's tenure as chairman and CEO was marred by criticism from activist hedge fund manager Bill Ackman. Ultimately, it was Ackman who pressured the P&G board to replace McDonald. Ackman, head of Pershing Square Capital Management, has been one of most vocal critics of McDonald's leadership. In January, he told CNNMoney he thought it was unlikely McDonald was the right CEO for the company and that the senior management team at P&G had also lost the confidence in him.

For its part, P&G insists that McDonald chose to retire after 33 years of service with the company.