Comeback Kids

At ailing firms, the new guy is the old guy

May 24, 2013
May 24, 2013

Everything old is new again. Procter & Gamble is the latest company to bring back a former CEO to replace its outgoing one. Just last month, retailer JC Penney pulled the same trick.

The moves could reflect a lack of succession planning by the boards of directors or a dearth of qualified executives to take the helm. It may also be difficult to find people willing to become CEOs of ailing companies.

AG Lafley is coming out of retirement to go back to his old job as CEO of P&G. He replaces his successor, Bob McDonald, who had taken over in 2009. JC Penney brought back former Mike Ullman to replace his successor, Ron Johnson, after less than two years.

Normally when a CEO leaves, there is a search for a replacement. Or there is a orchestrated handover. But both P&G and JC Penney were under pressure by investors to push out their leaders, and the CEO departures surprised the market.

Other industries have also found it difficult to find CEOs. Natural gas company Chesapeake Energy finally named a permanent CEO earlier this week after a year of getting by with an interim leader. The company faced a shareholder revolt after Chesapeake co-founder Aubrey McClendon was found to be using his stakes in Chesapeake wells to gain personal loans. Anadarko Petroleum executive Robert Douglas Lawler is taking the helm at Chesapeake.

In April, Occidental Petroleum announced that CEO Steve Chazen would remain in his position, reversing an earlier decision to find a new CEO. One of the reasons behind the reversal, according to sources, was that Occidental found it difficult to find qualified candidates to replace Chazen.

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