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PepsiCo Taps Nooyi as CEO

Former CFO Indra Nooyi is only the fifth executive to be named CEO at the food and beverage giant.
Stephen TaubAugust 14, 2006

PepsiCo announced that current chief financial officer Indra Nooyi will take over as chief executive officer, effective October 1, making her one of the most prominent women in Corporate America.

She replaces Steve Reinemund, who said he will retire as chairman and CEO next May after 22 years with the company. Reinemund will serve as executive chairman of PepsiCo and will continue to serve as a member of the board of directors until his retirement.

Nooyi joined the food and beverages giant in 1994 and has served as president and chief financial officer since 2001, when she was also named to PepsiCo’s board of directors. She becomes only the fifth CEO in Pepsi’s 41-year history. “Indra’s record of transforming PepsiCo speaks for itself, and she has been an invaluable partner and ally throughout my time as CEO,” said Reinemund, in a statement. “She not only co-authored our vision and drafted our strategic blueprint, she has a sharp talent for turning insightful ideas and plans into realities and for developing and replenishing our talent base,” he added.

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Nooyi is credited with being the primary architect of PepsiCo’s restructuring, including the divestiture of its restaurants into YUM! Brands, the spin-off and public offering of company-owned bottling operations into anchor bottler Pepsi Bottling Group, acquiring Tropicana, and the merger with Quaker Oats.

In an attempt to prevent Nooyi from defecting to another company, the former CFO was one of only two Pepsi executives granted multimillion-dollar restricted stock awards that require them to stay until 2009 to cash in, reported The Wall Street Journal. Michael White, head of Pepsi’s international business, was the other executive.

Prior to joining PepsiCo in 1994 as senior vice president of strategic planning, Nooyi spent four years as senior vice president of strategy and strategic marketing for Asea Brown Boveri, and four years as vice president and director of corporate strategy and planning at Motorola.

PepsiCo also announced that Nooyi’s current responsibilities will be divided between two PepsiCo veterans. Richard Goodman, currently CFO of PepsiCo International, will assume the position of CFO for the corporation with responsibility for tax, treasury, control, risk management and audit, and investor relations. Hugh Johnston, currently senior vice president, transformation, has been promoted to the newly created position of executive vice president, operations and will add global procurement and information technology to his responsibilities.

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