PepsiCo's names Ms. Indra Nooyi as New CEO

PepsiCo's names Ms. Indra Nooyi as New CEO

PepsiCo's names Ms. Indra Nooyi as New CEO

PepsiCo Inc. named Indra Nooyi as chief executive, succeeding Steve Reinemund, the soft-drink and snack-food company said Monday. With the move, Ms. Nooyi becomes one of the most prominent woman in corporate America.

Ms. Nooyi's appointment is effective Oct. 1. Mr. Reinemund said he is stepping down to spend more time with his family.

Ms. Nooyi, 50 years old, joined Purchase, N.Y.-based PepsiCo -- whose brands include Gatorade sports drinks, Frito-Lay snacks, Quaker oatmeal and its namesake cola -- in 1994 and has served as president and chief financial officer for about five years.

"We are exceedingly fortunate to have a leader of Indra's caliber, vision and experience take the helm," presiding director Robert Allen said in a statement. "She has been instrumental to PepsiCo's solid direction and ongoing success and has the complete endorsement and support of the board."

Ms. Nooyi, who was raised in a middle-class family in India, early in her career worked as a corporate strategist at Motorola Inc. and Asea Brown Boveri Inc. After joining Pepsi, she helped spin off Pepsi's restaurant and bottling businesses and worked on the 1998 acquisition of juice maker Tropicana. Then she was lead negotiator on the $13.8 billion acquisition of Quaker Oats Co. in 2001. She was rewarded in May 2001 with a board seat at Pepsi and the additional title of president, putting her in line to succeed Mr. Reinemund someday.

The board had made it clear they didn't want to lose Ms. Nooyi. In 2004, she was one of only two Pepsi executives granted multimillion-dollar restricted stock awards that require them to stay until 2009 to cash in. The other executive to receive the service-based award was Michael White, head of Pepsi's international business. 

In becoming CEO, Ms. Nooyi joins an elite group of woman who lead major U.S. corporations. Earlier this year, Pepsi's Frito Lay North America chief, Irene B. Rosenfeld, was named the new CEO of Kraft Foods Inc. Other companies headed by woman include eBay Inc., Xerox Corp. and Lucent Technologies Inc.

Mr. Reinemund, 58 years old, will serve as executive chairman of PepsiCo and will continue to sit on the board until his retirement next May. He has been with the beverage and food giant for 22 years and spent more than five years as chairman and CEO.

"I have decided that my family is entitled to more time from me than the responsibilities and obligations of continuing as PepsiCo's CEO requires and deserves," said Mr. Reinemund. "It was, in many respects, the toughest and easiest decision of my life."

PepsiCo also said Ms. Nooyi's current responsibilities will be divided between two executives. 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. And Hugh Johnston, currently senior vice president in charge of 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.

Last month, PepsiCo reported a 14% increase in second-quarter profit and raised its full-year earnings outlook, reflecting continued strength from major brands like Gatorade and emerging markets such as Russia. Volume for Pepsi's noncarbonated drinks rose 23% during the quarter, led by Gatorade's 29% growth. That helped offset another sales decline for flagship Pepsi-Cola and the overall soda business slipping 1% by volume.

Shares of PepsiCo, which ranks second to Coca-Cola Co. in the soft-drink market, added 13 cents to end Friday's trading at $63.33.