AG Online

Yesterday, P&G's Board of Directors elected Bob McDonald President and Chief Executive, effective July 1, 2009. I will be moving full-time into the Chairman's role.

Bob McDonald is the most broadly and globally experienced CEO in P&G history. He has nearly 30 years of brand-building, market development, global business unit and global operations leadership experience across the Company and throughout the world.

He has lived and worked on nearly every continent and has experience in virtually every part of P&G's business. He spent most of the 1990s leading P&G's businesses in the Philippines, Japan and Korea, including responsibility for P&G's Hair Care business in Asia and the P&G Beauty Business in Japan. He led Global Fabric & Home Care, the Company's largest and most mature business, which delivered strong sales growth and record-setting profits during his tenure.

As Vice Chair - Global Operations, he led P&G's market development organizations and was a member of the team that created the Company's winning Low-Cost Business Model, which has helped drive developing markets to more than 30% of sales while delivering company-average margins.

As Chief Operating Officer, Bob has worked closely with the leaders of P&G's strong functional organizations including Marketing, R&D, Product Supply, Customer Business Development and others - and has championed the integration of P&G's global brand-building capability. He also played a pivotal role in the integration of Gillette and led P&G's game-changing "go-to-market" reinvention.

Bob has a strong track record of building capability and strong operating systems. He played an integral role in the development and selection of the Global Leadership team that's largely in place for the decade ahead - a team that is the most experienced and diverse leadership team that P&G has ever had.

Bob was elected president and chief executive through a rigorous, disciplined, multi-year succession process led by the Board. He believes in P&G's Purpose and P&G people to his core. He thinks strategically and operates systemically. He understands our most important assets are our brands and our people. He's a servant leader who will ensure we touch and improve more consumers' lives more completely - and grow our business consistently, reliably and sustainably as a result.

I'll work with Bob just as John Pepper worked with me when I became CEO nine years ago. I will be chairing the Board, with responsibility for the Board agenda and overall governance. I will continue to provide advice and counsel and, at Bob's request, will join him at his business strategy, innovation and talent reviews. I will continue to represent the Company on certain external matters. And I will continue to be involved in training for our senior managers.

Bob has my complete confidence and support, and I look forward to continuing as a full-time Chairman of the Board and as a full-fledged and full-on member of Bob's team, providing support in any way he finds helpful.

Please join me in congratulating Bob. He's the right leader at the right time and we're fortunate to have him taking the helm of our Company.

AGL

Bob McDonald Employee Message

I am humbled at the opportunity to lead P&G. First and foremost, I want to take this opportunity to thank the thousands of P&Gers with whom I've worked over the years, and whose leadership contributed mightily to our business and financial success, I also want to let you know how grateful I am to work with and for all of you as we touch and improve the lives of more consumers around the world.

I joined P&G because I wanted to be part of an organization that was focused on a higher purpose, an organization of people who were genuinely motivated by the opportunity to improve people's lives. I wanted to work with people who operated with clear and consistent values - people who hold themselves and one another accountable for operating with trust and integrity, for stepping up as leaders and owners of the business, for competing honorably with a passion to win against the best competitors in the world. And last, I wanted to work with people who are best in class, who would continually make me better because of their competence and excellence. I found all that at P&G, and my affection and respect for this Company and its people has grown steadily for nearly 30 years. The opportunity to serve you as chief executive is a tremendous honor and the greatest responsibility of my professional life.

It's a great honor to succeed A.G. Lafley as CEO. Under A.G.'s leadership, we have all focused on consumer-driven innovation and consistent, reliable sustainable growth. The Company has more than doubled sales since the beginning of the decade, and we've grown our portfolio of billion-dollar brands from 10 to 23. On average, annual organic sales have grown 5%, core earnings-per-share have grown 12%, and free cash flow productivity has increased 111% since 2001. The Company's market capitalization has increased dramatically, making P&G one of the five most valuable companies in the U.S. and among the 10 most valuable companies in the world.

In many ways, A.G. has led the transformation of P&G. He's focused the Company on core businesses and brands, faster-growing and higher-margin beauty, grooming and health care businesses, and winning in developing markets. He has made P&G a more consumer-driven and externally focused company. And he has shaped a far more diverse, open, connected and collaborative culture in which innovation is everyone's job. He's been one of the most successful CEOs in P&G history and I know you're grateful, as I am, for all that he's done for our Company - and for what he will continue to do as our full-time Chairman.

A.G., the vice chairs and I - together with your line business leaders - will be focused on navigating through the remaining months of the global recession and taking the steps necessary to ensure P&G emerges a stronger Company as economies recover. We are preserving and strengthening what is core and working at P&G today:

• We will stay true to our Purpose and Values, the bedrock foundation of P&G
• We will stay sharply focused on our growth strategies and core strengths to continue to grow sales and market share profitably and sustainably.
• We will continue to grow our strong stable of billion-dollar brands and aspiring billion-dollar brands.
• We will continue to lead innovation to provide products of superior performance, quality and value to more of the world's consumers.
• We will continue to improve productivity and to drive dramatic simplification to enable investment in growth, steady earnings progress, and excellent execution.
• We will continue to drive out costs and to drive up cash - the financial lifeblood of our Company.
• We will continue to invest in P&G people - our most important asset - to ensure we have the most innovative, productive and strongest-performing organization in our industry.

The opportunity that exists for us in the decade ahead is truly inspiring. We're reaching about three and a half billion consumers today. That's roughly a billion more consumers than we were reaching a decade ago. But, there are nearly seven billion people in the world. We have the opportunity to reach the great majority of them with P&G brands and products that we know improve their lives in small but meaningful ways. Few companies in the world can touch and improve as many lives as we can - and I'm proud to work alongside every one of you as we seek to fulfill P&G's Purpose and, as a result, deliver the strong, sustainable growth that people expect from P&G, and which we expect of ourselves. Thank you.

Bob