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Smale to Quit Top P&G Post; Artzt Next CEO

October 11, 1989

John G. Smale announced that he will resign as chairman and chief executive of Procter & Gamble as one of several top-level personnel moves at the consumer products company.

Smale, 62, said he wanted to spend more time with his family. He has been the company's chief executive for nine years and plans to leave Jan. 2.

The new chairman and chief executive will be Edwin L. Artzt, 59, now vice chairman and president of Procter & Gamble's international operations.

Company President John E. Pepper will give up most of his responsibility for domestic operations to oversee the international business.

Smale announced the changes at a shareholders' annual meeting that was punctuated by an "animal rights" demonstration. Several dozen people picketed outside the headquarters while others questioned Smale during the meeting about Procter & Gamble's use of animals in testing new products.

The company, in recent years a target of animal-protection groups, maintains that marketing certain products without first testing them on animals would be risky.

Nine shareholders expressed concerns about testing practices, but Smale would not say how many animals are being used. He said the company had reduced the number of test animals by a third in the past five years and will continue to seek alternative methods.

The shareholders approved a 2-for-1 stock split, effective Oct. 20, that will increase the authorized number of common shares to 1 billion from 500 million.

After his leaving his executive position, Smale will remain a Procter & Gamble employee as a director and as chairman of the executive committee.

"By January, I will have been president and then chairman of Procter & Gamble for nearly 16 years," Smale said. "I will have been the chief executive officer of the company for nine years. I've reached the conclusion that for me as well as for my family, it's time to turn this responsibility over to someone else."

Smale has led the company into new product lines, and two years ago supervised an $805-million reorganization aimed at streamlining management. During his tenure, the company acquired Richardson-Vicks, some major brands from G. D. Searle, and Noxell Corp. Those moves gave the personal-care products giant a wide base in over-the-counter drugs and beauty products.

Procter & Gamble had sales of $21.4 billion in the fiscal year ended June 30, and net earnings of $1.6 billion.

Smale also helped the company branch out into foreign markets. Roughly 39% of its sales in the last fiscal year were based outside the United States, and Smale said that proportion should top 50% within a few years.

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