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[BUSINESS] Indian-Born Indra Nooyi Appointed CEO of PepsiCo Inc.

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  • madchinaman
    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
    Message 1 of 1 , Aug 24, 2006
      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
      http://www.latimes.com/business/la-fi-pepsi15aug15,1,5050799.story


      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
      role model.

      "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
      Quaker Foods.

      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
      office.

      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
      last year.

      Shares of PepsiCo rose 62 cents Monday, or 1%, to $63.95.

      *

      (INFOBOX BELOW)

      Women at the top

      PepsiCo is the third-largest company by annual revenue to have a
      female CEO. Here are others.

      '05 revenue
      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


      Source: Reuters
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