Lafley, a former marketer who joined P&G as a brand manager in 1977, is coming out of retirement to rejoin P&G as CEO and president. He will also chair the board of directors.
He left the FMCG firm in 2009 after more than 40 years with the firm. Lafley is also said to be behind P&G’s acquisition of Gillette in 2005.
McDonald has been under pressure from investors, particularly major shareholder Bill Ackman who has been vocal in calling for McDonald to step down, to improve profit and growth since taking on the role four years ago.
In his time as CEO McDonald has struggle to grow revenue, profit and share price in line with expectations and has presided over several quarters of disappointing growth.
There has also been concern over the rate of innovation at the firm and it outlined plans to triple the rate of innovation late last year.
The news was announced after markets closed in the US where P&G is listed so any impact on share price remains to be seen.
The Wall Street Journal has quoted a memo sent by McDonald citing attention on him personally was “distracting” for the business.
“When we get to a point where too much attention becomes a distraction, it’s time to change that dynamic,” the memo read.
McDonald will retire on 30 June 2013 after 33 years with the company.
Jim McNerney, presiding director of P&G’s Board, says: “A.G.’s track record and his depth of experience at P&G make him uniquely qualified to lead the company forward at this important time. The board expects A.G. 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.”
P&G posted worse than expected sales and profit in its third quarter update last month, but stood by its commitment to invest in brands and product innovation to drive long-term growth. Lafley is expected to continue P&G’s $10bn cost-cutting and efficiency drive.
Biography Alan George “A.G.” Lafley
1977 – Joined Procter & Gamble as Brand Assistant of Joy
1978 – Assistant Brand Manager of Tide
1980 – Brand Manager of Dawn & Ivory Snow
1981 – Brand Manager of Special Assignment & Ivory Snow
1982 – Brand Manager of Cheer
1983 – Associate Advertising Manager of PS&D Division
1986 – Advertising Manager of PS&D Division
1988 – General Manager of Laundry Products of PS&D Division
1991 – Vice President of Laundry and Cleaning Products, Procter & Gamble USA 1994 – Group Vice President of The Procter & Gamble Company, and President of Procter & Gamble Far East
1995 – Executive Vice President of The Procter & Gamble Company, (President-Asia, Procter & Gamble Asia)
1998 – Executive Vice President of The Procter & Gamble Company, (President-North America, Procter & Gamble North America)
1999 – President of Global Beauty Care and North America
2000 – 2009 – CEO and President of Procter & Gamble
2009 – Chairman of Procter & Gamble