Merck’s Clyburn Joining IFF Adds to Ranks of Black CEOs in S&P 500

(Bloomberg) -- Frank Clyburn, who was passed over as a successor to Kenneth Frazier at Merck & Co., will leave the pharmaceutical company for a job as the chief executive officer of International Flavors & Fragrances Inc.

Clyburn, president of Merck’s human health division, is set to take the CEO role at food and health-sciences company IFF on Feb. 14, becoming one of the few Black corporate chiefs among companies in the S&P 500 Index. Clyburn, 57, who was also an executive vice president at Merck, wasn’t available for comment on his departure or the new role.

Companies came under renewed pressure from investors, employees and activists to increase workforce diversity and provide more opportunities to minorities after the 2020 murder of George Floyd sparked nationwide protests. Gains have been sluggish, at best, at the highest corporate level as the number of Black CEOs has actually declined since 2015. Prospects in the boardroom have been better, as appointments of Black directors surged in 2020 and 2021. 

When Frazier left the CEO role at Merck in late June, that dropped the number of Black CEOs in the index to five: Marvin Ellison at Lowes’s Cos., Roz Brewer at Walgreens Boots Alliance Inc., Arnold Donald at cruise company Carnival Corp., Craig Arnold at Eaton Corp. and Rene Jones at M&T Bank Corp.

In recent years, more Black CEOs have departed from their post than been appointed. Ken Chenault stepped down in 2018 at American Express Co., while Jide Zeitlin, the CEO of Tapestry Inc., parent of Coach and Kate Spade, left in 2020 amid misconduct allegations. Both were replaced by White executives. Brewer, who joined Boots Walgreen in March, was the first Black female CEO in the S&P 500 since Ursula Burns left Xerox Holdings Corp. in 2016. 

Clyburn’s appointment is another signal that the environment for Black executives is getting stronger as more opportunities are available, said Michael Hyter, CEO of the Executive Leadership Council, which advocates for Black executives in business. Clyburn was already running 90% of Merck’s business and would have been a prime candidate as a CEO, regardless of race, Hyter said. Outside of the S&P 500, Thasunda Brown Duckett at retirement adviser TIAA and David Rawlinson at Qurate Retail Inc., which operates the home shopping channel QVC, also represent recent gains for Black executives, Hyter said. 

“Any news of a Black CEO being appointed to the S&P is progress. That’s a victory,” Hyter said. “But there’s still too few of them.”

Clyburn replaces Andreas Fibig as CEO, with International Flavors & Fragrances director Dale Morrison becoming non-executive chairman. IFF’s stock has advanced about 20% in the last 12 months.

Clyburn is coming aboard IFF just as activist investor Carl Icahn has taken a 4% stake, CNBC reported on its website, citing unidentified people familiar with the matter. A representative for Icahn didn't return a request for comment. Michael DeVeau, a spokesman for IFF, said he could not comment on the news of Icahn's investment.

“IFF maintains an open dialogue with all of its shareholders and we welcome constructive input on ways to create value. We look forward to regularly communicating with shareholders about our business and prospects,’’ DeVeau said in an emailed statement.

IFF is a $36 billion New York-based company that makes scents, tastes, and ingredients for foods, beverages, health and other products. The acquisition of DuPont de Nemours Inc.'s nutrition and biosciences business last February, following the Frutarom purchase in 2018, makes IFF by far the largest producer of flavor, fragrance and health ingredients, according to an analysis by Bloomberg Intelligence. Clyburn was also on the board of DuPont from June 1, 2019, until Thursday, which gave him familiarity with the merger, IFF said in a statement.

Clyburn’s departure from Merck simultaneously comes as a blow to the pharmaceutical industry, whose upper ranks are lacking diversity. 

In February, Merck announced Frazier would retire from his post at the end of June and named then-Chief Financial Officer Robert Davis as future CEO. In tapping Davis, the board had passed over Clyburn and another top executive, Michael Nally, who was chief marketing officer of its human health division, which oversees its major pharmaceutical portfolio.

A month later, Nally departed from Merck to run a biotech company. With that announcement, Merck promoted Clyburn, who had been chief commercial officer of human health, to president of human health. Clyburn’s new role combined his past job with Nally’s, overseeing both commercial and marketing strategy for the human health division.

Mizuho analysts Mara Goldstein and Supawat Thongthip said in a note that they weren't surprised to see Clyburn leave after being passed up for CEO. “He has been highly regarded and viewed as an effective leader,” they said in a note to investors on Thursday, crediting Clyburn with building the global strategy that's made Merck's top-selling product, the immuno-oncology drug Keytruda, a blockbuster success.

Goldstein and Thongthip added that they expect Clyburn's successor to be appointed from within. Merck said in a statement that new leadership for the human health division will be announced in coming weeks.

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