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None of the analysts who cover Procter & Gamble (NYSE: PG) like Chairman & CEO Robert A. McDonald. He has been CEO for three years. The stock has handily under-performed the S&P 500 since then. So far this year, shares are off 3% compared to an S&P 500 increase of 12%. And, the stock plunged last week after the company announced its quarterly earnings. EPS dropped 22%. P&G’s dropped its forecast well below expectations.

The P&G board has to take much of the blame for the company’s performance particularly because it has sent positive public signals about McDonald’s performance. He was paid $16.1 million last year and $13.1 million in the previous year. In both cases, McDonald got a raise.

The board’s decision about McDonald will rest to a large extent with presiding director W. James McNerney, Jr., who is the chairman and CEO of Boeing (NYSE: BA), a company which has had a number of financial and operating problems of its own. McNerney job has been on the line off and on. He would have to gather the P&G independent directors if any action is to be take to oust McDonald

Who would the board put into the CEO’s position? There are a number of outside candidates, but if P&G goes inside, there are only two realistic alternatives. One is Werner Geissler, who runs global operations. He is as close as the company has to a COO. The other candidate is E. Dimitri Panayotopoulos, who is head of the huge global household care division.

McDonald can’t survive another bad quarter, which means he has to do better than P&G’s already lowered guidance. Even money he is out three months from now, if his past performance is any indication

Douglas A. McIntyre