`Flamboyant' figure leaves centre stage

The retirement of Dr Tony O'Reilly as chief executive of the Heinz food conglomerate has been widely reported in the business pages of the leading US newspapers. Much attention is paid to his record earnings and to recent criticism of Heinz's share price performance. Some commentators also query whether it is wise for Dr O'Reilly to remain as chairman after he steps down as chief executive next April. This could "inhibit" the independence of his successor, William R. Johnson, according to some observers.

There is also regret that one of the most "flamboyant" business leaders is leaving the scene. "With his retirement, perhaps, an era in glitzy, larger-than-life CEOs will come to an end," says USA Today in a lead business story which pictures Dr O'Reilly throwing up a globe. He is described as a "world-class bon vivant who regularly hob-nobs with heads of state such as South African President Nelson Mandela".

The New York Times under the heading: "O'Reilly to step down as Heinz Chief; Pay and Style were Criticized", quotes Heinz spokesman, Mr Ted Smyth, as saying that recent criticism of the company stock performance had "no bearing on the timing" of the resignation. The announcement pushed Heinz stock up $1.25 a share to a 52-week closing high of $52.62.

The report says that "Some of Heinz's largest institutional investors took issue with Mr O'Reilly's style, complaining about the high salaries he paid himself and his executives as well as lack of new blood on the board. In the 1997 fiscal year, Mr O'Reilly received $2.9 million in salary, bonus and benefits, plus 750,000 stock options."

The report asks "how active Mr O'Reilly will be as chairman, and if he is active, whether that will cause management headaches for Mr Johnson (48), as he tries to put his own vision for the company into motion? Mr Johnson, for example, is thought to be in favour of restructuring company operations in Europe, a project avoided so far".

The Washington Post writes that "The curtain came down on one of Corporate America's most flamboyant acts yesterday". But an executive in the Lens money management company in Washington is quoted as saying: "I think he's making the right choice. It's great he recognises it's time for him to go."

The report says that "O'Reilly wowed Wall Street in the 1980s as he revved up the tired Heinz brand and went on a global shopping spree for international food companies. But Heinz lagged in the 1990s and its brands grew tired as arch rival Campbell Soup Co. modernized under a new, outsider, CEO and a revamped board".

The Wall Street Journal in its report concentrates on the track record of Mr Johnson but says that Dr O'Reilly "led Heinz as it expanded operations into all major continents. His charisma and sales skills in the US and abroad revived the company in the 1980s, producing consistent sales growth since 1987". The report says that "rumours circulated last year that Mr O'Reilly had health problems, which he did not address".