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Coke executive resigns after being passed over

"He was brought in to be a change agent ... They say he had a tough style, but sometimes that is required to change the mentality."

William Pecoriello, a beverage-industry analyst at Morgan Stanley

A month after being passed over for the top job, Steven Heyer, the president and chief operating officer of Coca-Cola, said on Wed-nesday that he would leave the company.

Heyer, a marketing wizard who joined the company in 2001, was once considered the heir apparent to the previous chief executive, Douglas Daft, but he lost out to a company veteran, Neville Isdell, after a protracted search.

Isdell said in a statement that the two had reached a "mutual agreement" on Tuesday that would lead to Heyer's departure from Coke after "an orderly transition" in the next several months.

"We agreed that Steve could best realize his aspirations by pursuing opportunities outside the company," Isdell said.

Heyer will apparently leave without another offer in hand, and Coke has yet to announce whether or when it will name a successor.

His exit was widely expected by Wall Street analysts and beverage industry observers after Coke set up the high-stakes derby for a new chief executive, seemingly marginalizing Heyer's candidacy.

But the timing of Wednesday's announcement, just a week after Isdell officially took over, was somewhat surprising, and it may signal that he intends to move swiftly to put his own mark on the company and its management.

"It was precipitated by Neville getting the job," said one individual close to the situation. "This happened very fast. Nobody is quite sure of anything."

Heyer arrived at Coke three years ago, armed with what many analysts considered the right formula to put the long-troubled company on the right track.

"Coming from outside the industry, he brought a way of thinking that was very different from the way Coke was before," said William Pecoriello, a beverage-industry analyst at Morgan Stanley.

Pecoriello said Heyer's departure "leaves a big hole in Coke's organization in terms of marketing strategy and planning."

Pecoriello suggested that the management structure at Coke would again be forced to reshuffle; this time, in a way that would eliminate the president's role and allow Isdell to have more direct contact with the company's regional division heads.

Isdell, 61, a longtime Coke executive who was brought back to the company this year, now has a mandate to install his own management team, but will likely carry out many of the strategies that Heyer helped design.

Still, he is under pressure to reverse the company's recent history of declining sales and management turmoil.

"This is a very important moment for Coca-Cola," said Emanuel Goldman, a beverage industry consultant in Hillsborough, California. "If they pick right, they can overcome some of the management sins of the past."

Heyer, a 51-year-old former Turner Broadcasting president with stints as a management consultant and an advertising executive on his resume, arrived at Coke as an outsider to head Coca-Cola Ventures, a now defunct division that included oversight of the Minute Maid juice brand.

But Heyer's star soon began to rise, and he quickly won the favor of Wall Street analysts as well as other powerful Coke insiders like Donald Keough, who believed his ideas might be just the thing to shake up the staid soft drink maker.

In less than two years, he rocketed through the company's ranks to become head of soft drink concentrate manufacturing and the marketing division, the two most important businesses for Coke, eventually getting promoted to second-in-command as president.

While Heyer's big ideas were welcome, his assertive -- and sometimes acerbic-management style often was not.

Beverage industry observers said that his brash sensibility was not compatible with the company's genteel culture and led some executives to leave the company.

"He was brought in to be a change agent," Pecoriello said. "They say he had a tough style, but sometimes that is required to change the mentality."
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