Coca-Cola Co. elevated Muhtar Kent to president-chief operating officer Dec. 7, effective immediately, fueling speculation that Mary Minnick, president-marketing, strategy and innovation, likely would leave the marketer.
Mr. Kent assumes the No. 2 executive post left vacant by Steve Heyer in June 2004.
"For most of his 28 years in our system, I have worked closely with Muhtar," Coke CEO Neville Isdell said in a statement. "He is an excellent and focused leader, and I look forward to working, and winning, with him as we take the Coca-Cola Co. to a future of sustained growth."
Many considered Ms. Minnick a candidate for the top job. However, she faced stiff competition from Mr. Kent in January, when he was named president of the marketer's international division. The appointment of Indra Nooyi to CEO of Pepsi in August buttressed the notion that Ms. Minnick also could rise to the top. But talk spread in October that the board was considering Mr. Kent to become president despite a stock-trading scandal that resulted in the Turkey native's resignation from bottler Coca-Cola Amatil a decade earlier.
That news prompted speculation that Ms. Minnick was shopping for a comparable position outside of Coke. Several industry observers and insiders have predicted that Ms. Minnick would not wait long for a shot to lead a company, even as they insisted that Mr. Kent's elevation was no guarantee he would become CEO.
"As of today, Muhtar is the clear leading candidate to succeed Neville someday, but it's not a certainty," said John Sicher, publisher and editor of Beverage Digest. "He still has to prove himself in his new job."
"Even if that happens, it doesn't mean Mary comes up empty," said one former co-worker. "She could readily be named president there if or when Muhtar is named CEO."
Some not surprised
Others have noted that Ms. Minnick was never a serious candidate for CEO, having been hired by former Chairman-CEO Doug Daft. However, with the company suffering from earlier succession botches and a ravaged executive pipeline, Ms. Minnick's successes in Asia were proof the marketer still had strong talent in its ranks. Mr. Isdell empowered her to make a host of strategic and marketing changes, including boosting the annual marketing budget by $400 million.
Ms. Minnick couldn't be reached for comment, but a company spokesman was quick to note that Ms. Minnick continues to report to Mr. Isdell and works closely with Mr. Kent in the executive committee. "Mary continues to provide great leadership for our strategy, marketing and innovation group," said the spokesman, who wouldn't comment on other succession plans or executive contracts. "That group has accelerated our growth and contributed significantly to our success in 2006."
Many observers remain mystified that Mr. Kent would have a future with Coke after his earlier fall from grace. The executive, who joined Coke in 1978, was enjoying a successful career and held myriad marketing and operations posts, including general manager of Coca-Cola Turkey and Central Asia, president of the East Central Europe division and senior VP of Coca-Cola International.
Then, in late 1996, when he was managing director of Coca-Cola Amatil, based in Sydney, Australia, Mr. Kent made $400,000 on 100,000 short-sold Amatil shares just before the regional bottler unexpectedly warned of a profit shortfall. Following an investigation by Australian securities regulators, Mr. Kent in 1999 resigned and agreed to pay back the profits he made to share purchasers. Coke management in a Nov. 12 article in the Atlanta Journal-Constitution said it was an "honest mistake" based on financial advice to diversify his portfolio and that he didn't fully understand the nature or timing of the transaction.
"Without doubt, Muhtar is a man of the highest integrity and deepest skills," said Mr. Isdell, in today's statement.
After he left Coke, he was president-CEO of Efes Beverage Group from 1999 until May 2005, when Coke, under Mr. Isdell, recruited him back as president-chief operating officer, North Asia, Eurasia and Middle East Group. In January, he ascended to president of Coca-Cola International.
Mr. Isdell credited the company's international markets -- and thereby Mr. Kent -- for 95% of its year-to-date unit-case-volume growth. In the third quarter ended Sept. 29, Coke posted a 14% boost to its third-quarter profit and a 5% volume gain globally. It was the company's best global-sales period since the third quarter of 2000, despite a 1% fall in North America.
"Since his return to our company, his ability to realize growth across the entire nonalcoholic beverage sector in our key international markets has been central to our success," Mr. Isdell said in the statement. "Additionally, Muhtar's close working relationship with our bottling partners has enabled us to capture marketplace opportunities and improve the way we do business."