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Coke’s No. 2 executive to step down

COO Heyer was passed over for firm’s top job

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Steve Heyer

Steve Heyer

ATLANTA — The Coca-Cola Co.'s No. 2 executive is stepping down after being passed over for the top job at the world's biggest beverage maker, the latest in a string of high-level departures. Now some are wondering: Who will be next?

The company said Wednesday that Steve Heyer, the company's president and chief operating officer, will leave by mutual agreement after a transition period of several months. His plans beyond that were not disclosed.

Coca-Cola shares slid 85 cents to close at $51.76 on the New York Stock Exchange.

"Part of the problem with Coke has been a never-ending series of executive-level changes," said James Owers, a finance professor at Georgia State University. "That appears to be causing the market considerable anxiety."

E. Neville Isdell, a veteran Coca-Cola system executive who was named last month to replace Doug Daft as chairman and chief executive, said the decision that Heyer would leave followed discussions he had with Heyer over the past week. Spokeswoman Sonya Soutus would not say who initiated the decision.

Some analysts have speculated that more changes could come under Isdell's watch as he seeks to restore confidence in a company that is posting strong earnings but has had public image problems amid federal investigations and the executive departures.

In addition to Heyer, the Atlanta-based company's chief executive, general counsel, human resources boss and the head of its North American division announced their departures in the last year.

J.P. Morgan analyst John Faucher said in a research note Wednesday that the main question over the next couple of weeks will be how Isdell and Coca-Cola address Heyer's departure. Like other analysts, Faucher believes more changes could come.

"We think that a reorganization of the senior management reporting structure could be in the works, which would broaden the bench at the top," he said.

Many analysts had expected Heyer to leave after he lost out to Isdell to be Daft's replacement.

"Probably what was a surprise was that it took a month for this to happen," Owers said.

However, Heyer said at a recent analysts' conference that he was looking forward to working with Isdell. "I'm very optimistic we will be great partners," Heyer said May 18 at the Goldman Sachs consumer products conference.

It's not clear what changed his mind.

Owers noted that Heyer enjoyed support from others in senior Coke management.

"Some of the significant players held him in pretty high regard," Owers said. "So given that, a new CEO may feel threatened by his continued presence."

Heyer said in a statement that with the arrival of new senior leadership, "this is the right time for me to pursue new opportunities."

All Isdell would say was that, "We agreed that Steve could best realize his aspirations by pursuing opportunities outside of the company, and we both also want to see his important work during the past three years transitioned in a professional and mutually beneficial manner."

Heyer, 51, was president and chief operating officer of Coca-Cola Ventures before being elected to the company's No. 2 position in December 2002. He had joined the company in March 2001 from then-AOL Time Warner Inc., where he had served as president and chief operating officer of Turner Broadcasting System Inc.

At Turner, Heyer was responsible for all primary revenue and cost centers for the company including its entertainment networks. He also directed Turner sales, marketing and distribution and sports divisions.

Before Turner, Heyer worked for several advertising and consumer services firms.

Isdell, 60, is an Irish citizen who worked in the Coca-Cola system mostly in Europe, the Middle East and Africa for 35 years before retiring in 2001.