Heyer Will Leave Coke 'By Mutual Agreement.'
Isdell Era Begins.

In move that was widely anticipated, Coke announces June 9 that president/COO Steve Heyer will leave. Coke says Heyer's departure is "by mutual agreement" and will follow "orderly transition period." When Neville Isdell was chosen chairman/CEO (BD 5/5/04) and Heyer was passed over, informed Coke system executives suggested it was "just a matter of time" before Heyer left. Short tenure. Heyer's time at Coke was brief. He joined company in April 2001 and became president/COO in December 2002. His departure follows by just about 18 months.

Details. In employee memo, Isdell says he and Heyer "have been discussing the future for some time now." Says final decision on Heyer's departure reached in conversation Tuesday, June 8. Isdell says in statement he and Heyer "have looked at how (Heyer) could best realize his personal goals given my election as chairman and CEO ... We agreed that Steve could best realize his aspirations by pursuing opportunities outside" Coke. Isdell lauds Heyer's "meaningful contributions." 'All the best.' Isdell wishes Heyer "all the best as he goes on to what we know will be great achievements." Transition. Coke says Heyer will continue as COO "to effect an orderly transition over the next several months." Dollars. Heyer's departure package said to be valued at $20-$25 mil.

Ahead; more changes? Isdell is moving quickly to make his mark. In addition to Heyer's departure, he has brought in new head of HR with whom he previously worked (see below) and appointed new head of investor relations (see "People"). Some Coke system executives predict more management changes lie ahead. They suggest Isdell may make changes both in members of top management team and in company's global management structure. Some say Isdell has considered moving from having Coke's organization split among five separate global operating units to having operations split between North America and international. Some also say he may bring in Irial Finan in some senior capacity; Isdell and Finan worked together at Coke Hellenic. Some further suggest that Isdell may want Coke's senior operational management reporting directly to him, at least for a while. Under current structure, global business heads report to COO, not to CEO.

Heyer. Over last few months -- before and after CEO choice was made -- Heyer's support from bottlers and Wall St. analysts became apparent. In recent BD interviews with bottlers (BD 5/14/04), several voiced support for Heyer. But they also urged Isdell to resolve questions surrounding Heyer's future at company. Noted one: "The COO situation needs to be resolved quickly." In wake of Heyer announcement, Morgan Stanley's Bill Pecoriello calls COO's departure "big loss" for Coke and says departure leaves "big hole" re company's "marketing strategy and planning." But J.P. Morgan's John Faucher says "main question over the next couple of weeks will be how Coke will address his departure in terms of replacing him." Flip-side. Heyer's talents and intellect are well known. But some company insiders say he can be tough and even acerbic with fellow executives, and he has received some heat for that in press and at company.

Coca-Cola Enterprises' Alm. Heyer and Coca-Cola Enterprises CEO John Alm are known to have forged positive working relationship. Alm tells BD: "We are extremely grateful for Steve's meaningful contributions and leadership in building a strategic worldwide partnership with the bottlers." Continues: "In addition, he led a successful process in improving innovation and brand marketing/advertising that has helped grow our business." 'Miss' him. Adds: "We'll miss Steve, but we know he'll be a great leader in his next opportunity." Working with Isdell. And Alm declares: "We look forward to working with Neville and his team."

Isdell takes reins. Isdell formally took reins of Coke Tuesday June 1, 2004, succeeding Doug Daft. On his first morning on job, he visited major Coke customer McDonald's. Two days later, he met with Atlanta VIPs at Coke-hosted reception. On June 1, he sent internal memo to all Coke employees; details below. Isdell says over next four months, he will work to get up-to-date and "won't be doing a lot of talking. Instead, I'll be doing a lot of listening."

Isdell's memo. In memo, Isdell cites Coke's "limitless opportunities" and lists eight themes: 1) operate with "highest standards of ethical behavior." 2) keep "it as simple as our challenging business allows." 3) "Hard, but fulfilling work." 4) demand and expect "from each other accountability, flawless execution and innovative thinking." 5) accomplish and deliver "concrete results instead of talking about what we will do next." 6) "Stamping out bureaucracy when it impedes our ability to do our best." 7) service to customers and consumers "instead of (thinking about) what we personally can gain." 8) respect, challenge and support "each other as we achieve our ambitions together."

New hire; reports to Isdell. Coke names new head of human resources: system veteran and Isdell colleague Cynthia McCague. In organizational change, she reports directly to Isdell; her predecessor, Coretha Rushing, had reported to general counsel Deval Patrick who is also leaving Coke (BD 4/30/04). McCague first joined Coke in 1982. She worked with Isdell as head of HR at time of creation of Coca-Cola Beverages, which Isdell ran. That company later merged with Coke Hellenic to form Coke HBC in 2000, and McCague ran HR at HBC. Rushing's departure from company was previously announced (BD 2/20/04).