McCormick & Co. announced yesterday that President and Chief Operating Officer Robert J. Lawless will take over as chief executive officer Jan. 1.
The move will allow Charles P. "Buzz" McCormick Jr., who returned from retirement this year to lead the Sparks spice giant through its toughest challenges, to relinquish day-to-day duties and return to his Florida retirement residence. He will remain as chairman.
McCormick, the grand-nephew of the company's founder, said the company's future was secure enough to permit the change.
"This has been a year when our top priority was to do the things necessary to get our company to grow," said McCormick, 68. "Our turnaround happened as we hoped, a little earlier than we had expected."
Lawless, 50, promised a continuation of the leadership provided by McCormick, whom he called a mentor. "Buzz continues to be my boss," he said. "As I feel the need to check with Buzz, I will do that."
In other management changes, McCormick announced the promotion of Robert G. Davey, 47, the company's chief financial officer, from vice president to executive vice president; and the election of Robert W. Schroeder, 51, vice president and general manager of McCormick/Schilling Division, to the company's board.
The company's board also approved a 7 percent increase in the quarterly dividend, from 14 cents per share to 15 cents, payable Jan. 20 to shareholders of record Dec. 31.
McCormick stock reacted little to the announcement, closing at $22.625, off 75 cents.
"Buzz" McCormick had spent 45 years at the company -- six as chairman and CEO -- when he retired in January 1993 to spend much of his time in Florida.
But when his successor, Bailey A. Thomas, died of a heart attack in July 1994, McCormick reassumed the chairmanship to help out the newly elevated CEO, H. Eugene Blattman. Then, in October 1995, Blattman announced that he was retiring because of a heart ailment that left him fatigued and weak. So, on Jan. 1, 1996, McCormick also took up the job of chief executive.
McCormick's second tenure as chairman and CEO was marked by a flurry of activity aimed at making the company smaller but more profitable as the company defended its domestic market against Australian competitor Burns Philp & Co.
In a restructuring, McCormick ended some product lines, sold under-performing businesses and closed a New York City packaging plant. The company also sold Gilroy Foods Inc., its California-based garlic and onion dehydration business, and a companion power plant for $257 million. With the changes, McCormick gave up 16 percent of its $1.8 billion in annual sales, but presumably a smaller percentage of its earnings.
When McCormick announced in September that one-time charges of $71 million resulted in a third-quarter loss of $24.3 million, analysts were pleased. Without the charges, earnings would have been $23 million -- a 16 percent increase and a break from five consecutive quarters of earnings below expectations.
"Buzz wouldn't be leaving if he didn't think things had turned around," said David Nelson, a NatWest Securities analyst. "I think very highly of Bob Lawless. I think he brings energy and vision that I'm excited about."
Jeff Metzger, publisher of Food World, a Columbia-based trade journal, credited McCormick with more than just a financial turnaround.
"I think one of the things that Buzz has done is resurrect the morale of McCormick," he said. "As much as anything else, he's told people this is a viable company, you're important, and we do have a plan."
Metzger said Lawless is a hybrid between a hands-on financial manager and a company veteran with a sense of McCormick's history. He predicted a smooth transition.
"He has the confidence of the troops and the blessing of Buzz, who is immensely popular with his people," Metzger said.
Lawless, a former minor league hockey player and 19-year McCormick veteran, was named last year as chief operating officer, a position that historically serves as a training ground for the company's top spot.
Lawless, who held executive positions in Canada and Europe, credited the company's leadership team with executing a plan that made McCormick's retirement as CEO possible. He said the company lowered its debt, shed under-performing businesses and positioned itself for growth in 1997.
"There haven't been any surprises or disappointments this year," he said.
Lawless said the company does not plan to sell any additional divisions or businesses. He promised that the leadership team will focus on sales growth, inventory management and effective use of its dollars.
"We have very specific targets for general managers, and we will hold them accountable," he said.
McCormick called Lawless a leader with boundless energy who is well-liked. "He's a workaholic and all the other things you look for in an executive," McCormick said.
McCormick said he had expected his "re-retirement" to come in March 1997.
"But it became obvious during the fall that things were coming together so well that there was no reason to wait," he said.
As chairman, McCormick said, he will spend about 40 percent of his time on company business.
Pub Date: 12/17/96