Merck replaces CEO Gilmartin with Clark

updated 3:38 p.m. ET May 5, 2005

NEW YORK - Merck & Co. said Thursday that Raymond V. Gilmartin has stepped down from the top jobs at the drugmaker, which has been slammed by mounting lawsuits and falling revenues since recalling its blockbuster painkiller Vioxx last fall.

Merck named Richard T. Clark, 59, as chief executive officer, president and a board member in Gilmartin’s place. Gilmartin also is stepping down as chairman although no successor was named.

The company said it will operate without a chairman for 1½ years to 2 years, with a new three-person executive committee handling many of the usual chairman’s duties and assisting Clark during the transition.

“Then we’ll deliberate on the situation and decide whether we’ll appoint a chairman or do something else,” said Merck board member Lawrence A. Bossidy, former chairman and CEO of Honeywell International Inc.

Bossidy would not say whether Merck might then make the chairman a separate post from CEO, a move some shareholders advocated during their annual meeting last week.

Bossidy will serve as chairman of the new executive committee; the other two seats will be held by two longtime board members, William G. Bowen and Samuel O. Their.

Clark had been president of Merck’s manufacturing division, which operates 31 plants in 25 countries. He began working at Merck in 1972 as a quality control inspector and advanced through jobs in production, new product planning and strategic planning.

“I never dreamed that one day I would be leading the company,” he said.

Clark previously served as the chairman and chief executive officer of Medco Health Solutions Inc., one of the country’s biggest managers of prescription drug programs. Merck spun off Franklin Lakes-based Medco in August 2003.

“He’s a person of vigor, he’s a hands-on leader, he’s got plenty of energy,” Bossidy said of Clark. “We think he will do a wonderful job taking this company forward.”

Gilmartin, who has served as president and CEO since 1994, will serve as special adviser to the board’s executive committee until March 2006, when he will retire. He turns 65 that year.

Gilmartin had originally intended to remain CEO until then.

“In no way did we push him out,” Bossidy told reporters during a conference call.

Clark was tapped after Merck’s compensation and benefits committee, headed by Bossidy, reviewed numerous internal and external candidates. The search began last fall, shortly after the huge impact of the Vioxx withdrawal began to crystallize.

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