[BUSINESS] Indian-Born Indra Nooyi Appointed CEO of PepsiCo Inc.
- PepsiCo Names Successor to CEO
Indra Nooyi is replacing Steve Reinemund at the maker of beverages
and snack foods.
By Molly Selvin, Times Staff Writer
With Monday's appointment of Indian-born Indra Nooyi as chief
executive, PepsiCo Inc. has positioned itself to compete for key
emerging markets in Asia and the Middle East, analysts say.
Nooyi, who had been the soft drink giant's president and chief
financial officer, will replace Steve Reinemund, 58, who announced
that he was ending his five-year tenure to spend more time with his
wife and four children.
Reinemund praised Nooyi, a 12-year PepsiCo veteran, as a talented
"I'm very excited and at the same time very humbled," Nooyi told
analysts during a conference call.
The 50-year-old Nooyi will be the rarest of CEOs: a wife, a mother
and a woman of color. Only two other women, Patricia Woertz of
Archer Daniels Midland Co. and Irene Rosenfeld of Kraft Foods Inc.,
lead larger (by annual revenue) U.S. corporations.
Nooyi's appointment makes her only the 11th female CEO of a Fortune
500 company, said Kara Helander, western regional vice president of
Catalyst, a nonprofit group that promotes women in business.
At PepsiCo, Nooyi played key roles in the purchase of Tropicana, the
public offering of Pepsi Cola bottling group and a merger with
Ken Harris, a partner at consulting firm Cannondale Associates in
Evanston, Ill., called Nooyi "a world-class CEO," adding that
she "has that special chromosome. She has presence."
J.P. Morgan analyst John Faucher said her challenge was to continue
the company's "phenomenal" results of recent years. Over the last
five years, PepsiCo's sales have increased an average of 5%,
compared with 3% for archrival Coca-Cola Inc.
Nooyi's background could be an asset as the company expands
internationally. She is comfortable in a variety of cultures, said
Carolyn Buck Luce, a partner with Ernst & Young who chairs a task
force on women executives for the New York-based Center for Work-
Life Policy. Nooyi's record suggests she is able to "celebrate
differences, not just tolerate them," Luce said.
Asia and the Middle East represent major emerging markets for soft
drink makers. Although Coke dominates the world, PepsiCo has the
edge in the Middle East, Faucher said.
Since 2003, PepsiCo and Coke have wrestled with allegations in India
that their soft drinks contain pesticide levels that exceed European
standards. Executives at Coke and Pepsi deny the allegations.
Faucher said the charges represented more of a threat to the
companies' images than their bottom lines.
Faucher said that "it certainly can't hurt" to have Nooyi at the
helm to demonstrate that PepsiCo is a global company.
Nooyi is known for her directness, wit and habit of singing in the
Helander credited PepsiCo with doing more than most corporations to
reward women and minorities.
Catalyst research found that 16.4% of Fortune 500 corporate officers
are women; at PepsiCo that number is 26.7%.
PepsiCo's success in nurturing and promoting women executives is an
integral part of its business strategy, said Judy Olian, dean of the
UCLA Anderson School of Management.
"It's not just about creating a diverse employment pool," she
said, "but doing it while creating new customer bases and new
product lines. That's the unique aspect."
Nooyi came to Purchase, N.Y.-based PepsiCo after working as a
corporate strategist at Motorola Inc. and Asea Brown Boveri Inc., an
electronic components maker.
Reinemund will continue to serve as chairman and a director until
May. Although the timing of his announcement took some by surprise,
he told analysts that he had been considering retirement for the
Shares of PepsiCo rose 62 cents Monday, or 1%, to $63.95.
Women at the top
PepsiCo is the third-largest company by annual revenue to have a
female CEO. Here are others.
Company Chief executive (In billions)
Archer Daniels Midland Patricia Woertz $36.6
Kraft Foods Irene Rosenfeld 34.1
PepsiCo Indra Nooyi 32.6
Rite Aid Mary Sammons 17.3
Sara Lee Brenda Barnes 16.0
Lucent Technologies Patricia Russo 9.4