Contra Costa Times - March 3, 2006
Clorox's CEO in Hospital
Johnston, credited for his company’s turnaround, suffered an apparent heart attack Wednesday
By George Avalos
Gerald Johnston, Clorox Co.'s chief executive and the architect of the company's resurgence in recent years, suffered an apparent heart attack and is being treated in a hospital, the company said Thursday.
Johnston, 58, apparently suffered the heart attack late Wednesday. The company did not say if it would appoint an interim leader during Johnston's absence, and it released no other details of Johnston's condition.
"Everyone is shocked and concerned," said Kathryn Caulfield, a spokeswoman for the Oakland-based maker of household products. "Jerry is very well liked and well respected in the company. That adds to people's concerns and their feelings."
Johnston became CEO in 2003. Under his leadership, Clorox has strengthened its brands through new products and partnerships, along with cutting costs. The company's stock is up 1 percent over the last year and has risen 8.1 percent so far in 2006.
"People are confident in our ability to carry on and we will continue to execute our strategy," Caulfield said.
Still, the company will have some issues to contend with during the period of Johnston's hospitalization, according to management experts.
"Typically what companies have in place is an emergency plan in case the CEO is unable to run the company for health reasons," said David Broman, chief executive and co-founder of Lafayette-based Syzygy Consulting Group.
A company does not always rely on a single person to carry out interim duties.
"Usually the company has a No. 2 who has already been groomed for the No. 1 role," said Laura Raynak, principal executive with Raynak Executive Search in Palo Alto. "Or they might split the job among two or three people. Or they might bring in a board member who has management experience."
But an interim official might not be installed right away.
"The first thing the company wants to do is be sure that the CEO's health is good," Raynak said. "The initial concern is that the person is healthy."
Eventually, however, if it becomes apparent that the CEO is not returning to work right away, a company has to make new plans.
"If the health condition affects the CEO for a longer period of time, they usually start a search committee with internal and external candidates," Broman said.
