December 1, 2006

RJR President Lynn Beasley Will Retire Jan. 1

By Richard Craver, Winston-Salem Journal, N.C.

Dec. 1--Lynn Beasley, the president of R.J. Reynolds Tobacco Co. and the architect of the controversial Joe Camel marketing campaign, said yesterday that she plans to retire Jan. 1.

Beasley, 49, is the highest-ranking official left from the RJR team that bought Brown & Williamson Tobacco Corp. in 2004 to create Reynolds American Inc.

She will be replaced by Daniel Delen, 41, who has been the president of British American Tobacco Ltd. in Japan since August 2004 and with the company for 17 years. Delen's hiring is another indication of how Susan Ivey, the chairwoman and chief executive of Reynolds American, is recasting the company toward a more youthful, risk-taking culture, analysts said.

Analysts credit Beasley with playing a significant management and marketing role with Reynolds during her 25-year career, which she began as a marketing assistant in 1982 and served as a senior brand manager for several years.

Rob Campagnino, a senior tobacco analyst with Prudential Securities, said in a 2002 interview with the Winston-Salem Journal that Beasley is "a tremendous asset" to Reynolds.

Beasley made her reputation in the industry when she turned around Camel in the late 1980s with the Joe Camel ads that eventually were banned in the 1999 Master Settlement Agreement.

In January 2002, Beasley was promoted to president of Reynolds Tobacco, taking over the day-to-day operations and serving as the right-hand woman to Andrew Schindler, Reynolds' chairman and chief executive at the time. In 2003, Beasley played a lead role in the decision to put Reynolds' marketing focus on Camel, and later Kool, over other brands.

Beasley retires as the second-highest paid executive at Reynolds. She made more than $2.4 million in salary, bonus and other compensation in 2005.

Beasley said in a statement that her 25 years with the company "have been both exhilarating and challenging."

"I've been afforded the opportunity for tremendous personal and professional growth at R.J. Reynolds and have enjoyed working with my extraordinarily dedicated and talented colleagues," she said. "At this point in my life, I'm looking forward to spending more time with friends and family."

Reynolds declined to make Beasley and Delen available for interviews.

"Lynn's 25-year career with R.J. Reynolds has been nothing short of extraordinary," Ivey said in a statement. "Her many contributions to R.J. Reynolds will continue to impact the company's performance for years to come." Ivey praised Delen's "broad and deep experience in the global tobacco industry."

"His past experience in the U.S. market will bring valuable insight and expertise to the business from day one," Ivey said.

R.J. Reynolds Tobacco Holdings Inc. bought Brown & Williamson from British American Tobacco PLC for $4.4 billion in July 2004. Ivey and Delen worked together at British American Tobacco.

"When you are merging two distinct cultures, the culture preferred by the new company's chief executive is usually the one that eventually prevails," said Peter Tourtellot, the managing director of Anderson Bauman Tourtellot Vos & Co., a turnaround-management and consulting company with an office in Greensboro.

"There could have been a philosophical difference between Ivey and Beasley regarding the future direction of the company. It is unusual for a key officer at a public company to step down and there not being an announcement of the decision to leave prior to the naming of their successor."

The switch of president at R.J. Reynolds Tobacco is understandable given that most chief executives want their own people in key roles, said Greg Warren, an analyst at Morningstar, a stock and mutual-fund research company in Chicago.

"This is not a shocker for that reason," Warren said.

Beasley has said that the Joe Camel campaign was a defining moment of her marketing career at Reynolds.

During testimony in a legal case involving Philip Morris USA, Beasley said she came up with the idea for Joe Camel to commemorate the 75th anniversary of the debut of Camel cigarettes. The idea came from a cartoon poster of a camel's face that had been used in France in the mid-1970s.

"When that was shown to adult smokers, they just, like, loved it," Beasley said in her testimony. "They lit up. They said, 'Hey, this is fun, it's entertaining, this is what you should use.' "And, you know, it's one of those things that when you're in marketing, it happens, like, once every several years when everybody in the room goes 'I like this, I really like it.' And it was one of those moments that just -- it's really great."

But the Joe Camel campaign proved to be a magnet for anti-smoking groups, which said that the advertising was aimed at attracting underage smokers at a time when cigarette sales were declining industrywide.

"Joe Camel was one of the most effective product campaigns aimed at kids, and not just cigarettes," said Vince Willmore, a vice president of communications for the Campaign for Tobacco-Free Kids. "It's the reason why youth smoking skyrocketed in the 1990s."

Reynolds said at the time, and does now, that it has never marketed its cigarettes to underage smokers.

Gayle Anderson, the president of the Greater Winston-Salem Chamber of Commerce, said she doubts that Beasley will remain idle long.

"Her job was certainly time-consuming and draining given the travel requirements and the day-to-day challenges of running a company like Reynolds, so it's not surprising to hear that she's retiring," Anderson said.


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