News: GM CEO Leaves
The company promoted president and chief operating officer Ken Powell to CEO. Sanger will remain as chairman through May, according to General Mills.
Sanger has been chairman and CEO since 1995. Powell has worked at General Mills since 1979.
"The board and I have great confidence that Ken will be an outstanding chief executive officer of General Mills," Sanger said in a statement. "He has extensive knowledge of our global food categories, our customers and our worldwide operations."
Spokeswoman Kirstie Foster said it was Sanger's decision to step down as CEO. The board gave its approval Monday, she said, just before the company's annual meeting.
The hand-over was "a planned and thoughtful part" of the company's succession plan, she said, though General Mills had not previously announced that Sanger would be leaving his post.
"The board values Steve's continuing leadership as chairman, and Steve agreed to continue in that role for a time to aid in the transition," Foster said.
Powell told stockholders at the annual meeting that General Mills will raise advertising spending this year by as much as 9 percent and accelerate development of healthier snacks and cereals. General Mills is working to match the pace of new products introduced by Kellogg Co., the nation's largest cereal-maker, which has won sales with Special K Red Berries and other items marketed as healthy.
"They've become more focused on the basics of their business," William Frels, CEO of Mairs & Power Inc. in St. Paul, said of General Mills. Powell "knows the landscape," Frels said.
Kellogg surpassed General Mills as the largest cereal-maker in 2002, a year after Sanger engineered the $10 billion purchase of Diageo PLC's Pillsbury unit.
Adding Pillsbury, the maker of Hamburger Helper dinner kits and Betty Crocker baking mixes, distracted General Mills' management from its core business, Sanger said last year. In addition to Pillsbury products, General Mills makes Cheerios cereal, Green Giant frozen vegetables and Fiber One snack bars.
Powell was appointed U.S. retail chief in May 2005, a month after General Mills' share of the U.S. cereal market fell to a low point of 27.6%. It has since recovered to about 30%, compared with Kellogg's 34%, according to Information Resources Inc.
General Mills promoted Powell to president and chief operating officer in May 2006. His other jobs at the company included running the Yoplait yogurt division and the company's cereal joint venture with Nestle SA.
"The board and I have great confidence that Ken will be an outstanding chief executive officer of General Mills," said Sanger. "He has extensive knowledge of our global food categories, our customers, and our worldwide operations. This deep-seated understanding of our business, coupled with Ken's commitment to our culture and the development of our people, make him uniquely qualified to lead General Mills in the next phase of our long-term growth."
Powell said, "I am honored and excited to serve as General Mills' chief executive officer. And I realize Steve will be a tough act to follow." Powell noted that since Sanger became chief executive officer in May 1995, company sales have more than doubled to exceed $12 billion in fiscal 2007, earnings have tripled to more than $1.1 billion, and total return to shareholders (stock price appreciation plus reinvested dividends) averaged 10 percent compounded annually over the period. General Mills also grew dramatically in global scope, increasing international sales ten fold over the past 12 years.
"It has been a great privilege for me to serve as chief executive officer of General Mills," Sanger said, "and I look forward to seeing General Mills continue to grow and prosper in the years ahead."
From the October 8, 2007, Prepared Foods e-Flash