Camilleri, Louis C. 1957–
Louis C. Camilleri
President, chief executive officer, and chairman, Altria Group
Born: 1957, in Alexandria, Egypt.
Education: University of Lausanne, Switzerland, degree in economics and business administration, 1976.
Family: Married Marjolyn (maiden name unknown).
Career: W.R. Grace & Co., business analyst; Philip Morris Europe, 1978–1986, business development analyst; Philip Morris International, 1982–1986, director of business development and planning; 1986–1990, vice president of the Eastern Europe, Middle East, and Africa region; 1990–1993, vice president of the Central and Eastern Europe region; 1993–1995, senior vice president of the European Union region; 1995, vice president for corporate business strategy; 1995, senior vice president for corporate planning; Kraft Foods International, 1995–1996, president and chief executive officer; Altria Group, 1996–2002, senior vice president and chief financial officer; 2002–, president, CEO, and chairman.
■ As president, CEO, and chairman of Altria—formerly called Philip Morris Companies—Louis Camilleri oversaw the world's largest tobacco firm, with 2004 sales of about $81 billion. Altria controlled about half of the U.S. tobacco market, and the Marlboro name was one of the world's most valuable brands. The company also made the Benson & Hedges, Parliament, and Virginia Slims brands. Tobacco, however, was only one part of the company's business. Its Kraft Foods North America unit was the world's second-largest food company (after Nestle) and the largest in the United States, with leading brands such as Jell-O, Kool-Aid, Maxwell House, and Post cereal. Camilleri took the top spot in the company after earning high marks in positions overseas and in various corporate roles. Despite his long career at Philip Morris, however, Camilleri's leadership style remained an enigma. His understated public
persona seemed to suit a company whose employees continued to dodge the persistent question "What is it like to work for a company whose primary product causes terminal illness?"
MULTICULTURAL BACKGROUND PRODUCES A GLOBAL EXECUTIVE
Camilleri was the product of a multicultural background. He was born in Alexandria, Egypt, to Maltese parents and left his native country at age five after the Suez crisis. His father left behind his iron- and steel-trading business but found the money to send his son to boarding school in Britain and, years later, to the University of Lausanne in Switzerland.
That background helped prepare Camilleri for a series of overseas positions with Philip Morris. Two years after graduating with a degree in economics, he launched his career at Philip Morris in Switzerland. That position was followed by a series of other international roles that contributed to the tobacco brand's overseas expansion; as head of Eastern European operations in the early 1990s, Camilleri secured a huge market share in that region. Camilleri's vast international experience became a strong business asset. Robert A. Eckert, the CEO of Mattel and former chief of Kraft, remembered watching in awe as Camilleri interacted with executives of the company's European operations, handling several different languages with ease.
BIG TOBACCO UNDER FIRE
In 1998 Camilleri helped negotiate the state lawsuits that contributed to the company's image as the most reviled corporation in the United States. Philip Morris and three rival companies reached settlements with 46 states amounting to nearly $250 billion, money that would help reimburse the cost of treating smoking-related illnesses. On top of that publicity nightmare, the U.S. government filed a massive lawsuit against the tobacco industry to recover health-care costs and profits allegedly derived from fraud.
In 2000 courts awarded $74 billion in punitive damages to Florida smokers, a verdict that Philip Morris vowed to appeal. As of May 2001 the judgment had been stayed pending the outcome of the company's appeal. This ruling was made possible because the tobacco companies named in the suit agreed to pay at least $709 million in the case regardless of the out-come of the appeal. The company, along with the rest of the tobacco industry, claimed that the original verdict would cause bankruptcy, which is not allowed by Florida tort law. Also in 2001 a Los Angeles jury ruled against Philip Morris, awarding Richard Boeken $3 billion in punitive damages, the largest amount ever awarded to an individual. (Later that year Boeken agreed to accept reduced damages of $100 million, but the company nonetheless appealed the reduced amount.)
On the subject of litigation, Camilleri followed the official line stated by his predecessor: Smoking is a lifestyle choice, not unlike eating a Big Mac, hiking Mount Everest, or spending five out of seven nights per week at the local tavern. Camilleri puffed on Marlboro Lights during his interviews. When asked whether he would advise people not to smoke, he responded: "If they're an adult, it's up to them" (Financial Times, January 31, 2003).
AN IMAGE MAKEOVER
In November 2001 Philip Morris announced that it would ask shareholders to approve changing the corporate name to Altria Group in April 2002. Camilleri claimed the move had just one motive: to raise Kraft's profile. "All our research showed that the name Philip Morris was solely associated with tobacco. And I would defy you to find anybody who knew that Kraft was part of Philip Morris. To this day, people are shocked and say: 'Really, you have Oreos? I don't believe it'" (Financial Times, January 31, 2003).
Many in the industry believed that the benign, almost altruistic-sounding moniker was clearly an attempt by Camilleri to distance his food division from the constant dark cloud that followed tobacco. After all, Philip Morris ranked 59th out of 60 in a Harris Interactive survey on corporate reputations released by the Wall Street Journal. Camilleri contended that the company continued to embrace its hallmark brand. "Most of the attacks [say] we are hiding from tobacco. But the fact is we're pretty proud of the Philip Morris name, and that hasn't disappeared. Philip Morris remains the name of tobacco, but it is confined to tobacco. Our vocal critics have now resorted to attacking our motivations rather than our actions. I see that as progress" (Financial Times, January 31, 2003).
In another move to burnish his company's image, Camilleri led Philip Morris's negotiations to divest its beer unit, Miller Brewing, which it acquired in two stages in 1968 and 1970. The division, which marketed the low-performing brands Miller Lite and Miller Genuine Draft, had always been a thorn in the company's side, overshadowing any positive press received by the parent company. In May 2002 Philip Morris agreed to sell Miller Brewing to South African Breweries for $3.6 billion in stock.
A NEW MARLBORO MAN RAISES HIS PROFILE
Camilleri had been one of the most accomplished, yet least visible executives in the company. At Philip Morris's Kraft Foods, he rallied for and then helped oversee the $19 billion purchase of Nabisco Holdings Corporation in 2000, the company's biggest acquisition. The deal added brands such as Chips Ahoy!, Oreo, and Ritz to its food portfolio.
In April 2002 Camilleri was elected president and CEO, succeeding Geoffrey C. Bible, who remained chairman until he retired in August of that year. The pressure on Camilleri was considerable. Apart from replacing a passionate predecessor, Camilleri was charged with making peace with his tobacco critics while maintaining the company's 40-year record of at least 15 percent growth in annual per-share earnings. Said Jane Evans of Opnix, a technology company, and a member of the Philip Morris board since 1981: "It's a tough job. But Louis is probably one of the most brilliant individuals I have ever met" (BusinessWeek, April 29, 2002). Despite 25 years at the company, however, Camilleri's management style was a mystery, and he clearly lacked the charisma that marked Bible's reign. Camilleri waited nearly a year to give his first interviews.
A year after his appointment, Marlboro's market share was being attacked from every possible angle. Some of that business went to less expensive brands, such as Rave, Hi-Val, and Roger, which saw their market share rise from 3 percent in 1998 to 10 percent in 2002. Camilleri waged a pricing battle with rival R. J. Reynolds while dealing with such formidable overseas competitors as British Tobacco.
But Camilleri faced considerably less pressure in the courts. A U.S. Supreme Court ruling reduced punitive damages and the Illinois Supreme Court announced that it would hear Philip Morris's appeal without an intermediate appellate court review. Camilleri believed the company would win its appeals and that the litigation onslaught would ultimately fizzle. "The plaintiffs' bar is pretty creative—but at one point they're going to run out of creativity. They'll probably set their sights on some other industry" (Financial Times, January 31, 2003). A likely new target is the food industry, which faces increased scrutiny in the wake of an obesity epidemic. Camilleri's food empire is well insulated—Kraft launched several healthier products and announced a campaign to educate the public about healthy eating.
A CLOUDY PORTRAIT
As of early 2004 Camilleri had yet to make a definitive impact on his company and its employees. Said one insider who spoke off the record: "He's unbelievably buttoned up, and there isn't a fact that he doesn't look at because he has a great financial mind. But he hasn't stood up and established himself as a leader yet. A lot of people are wondering whether he's capable of showing he can inspire people and create the pieces to create a bigger puzzle" (Delaney Report, April 4, 2004).
Outside the company Camilleri faced other hurdles. The world's first public-health treaty, the Framework Convention on Tobacco Control, placed a spotlight on his leadership. Publicly, Camilleri claimed to support the treaty, but he was criticized for his alleged efforts to undermine it. Nonetheless, Camilleri's quiet leadership style seemed beneficial in the litigious environment that continued to require diplomacy.
sources for further information
Buckley, Neil, "Food for Thought in Marlboro's New Face," Financial Times, January 31, 2003, p. 12.
Byrnes, Nanette, Julie Forster, and Christopher Condon, "A New Kind of Marlboro Man," BusinessWeek, April 29, 2002.
"A Little Less Love," Delaney Report, April 5, 2004, p. 1.
Sellers, Patricia, "Altria's Perfect Storm," Fortune, April 28, 2003, p. 96.