Pepsi’s first female CEO to end 12-year run, replaced by insider

Bloomberg

Indra Nooyi is stepping down as chief executive officer of food and beverage giant PepsiCo Inc., handing the reins to a top lieutenant in a transition that will draw attention to the dearth of prominent female CEOs in corporate America.
Nooyi, 62, will leave the role in October and remain chairman until early 2019. Ramon Laguarta, 54, who has been a candidate to take over since a promotion last year to president, will be just the sixth CEO in the 53-year history of the company.
Nooyi, who is from India, is the first foreign-born CEO of Pepsi and the first woman to lead the chips-and-soda behemoth, whose revenue topped $63 billion last year.
Her departure thins the ranks of female CEOs running S&P 500 companies and comes at a time when Pepsi’s North American beverage unit is stagnating amid a general decline in soda consumption. In 24 years at Pepsi, including 12 as chief executive, she has helped the Frito-Lay unit grow in a challenging industry and added healthier drinks and snacks to a portfolio that includes Cheetos and Mountain Dew.
“I’ve had a wonderful time being CEO, but at some point you sit back and say, look, it’s a responsible move to effect an orderly transition and to have somebody else take over the leadership of this company,” she said.
“Being a CEO requires strong legs and I feel like I ran two legs of a relay race and I want somebody else with nice strong legs and sharp eyes to come and lead this company.”
A 22-year Pepsi veteran, Laguarta ran the Europe Sub-Saharan Africa division before becoming president last year, overseeing global operations, strategy, public policy and government affairs.
Nooyi attended graduate school at Yale University and joined Purchase, New York-based Pepsi in 1994 as head of corporate strategy, rising to the CEO job in 2006. At the time only a handful of women ran major US companies, and there are still fewer than 30 female CEOs in the S&P 500.
Nooyi faced down activist investor Nelson Peltz, repelling a bid to break up the company, and has guided Pepsi through a tricky stretch as shifts in how US consumers eat and shop have bedeviled the largest food and beverage companies in the world.
“Indra’s legacy is that she’s figured out in a difficult environment that she could run a great company and drive great results and do good at the same time, while having long-lasting impact as a leader and global icon,” said Blair Effron, co-founder of Centerview Partners, an investment bank and advisory firm that’s worked with a range of consumer giants including Pepsi.

Developing Talent
As she ponders her next chapter, Nooyi said she’ll possibly take a vacation, in addition to watching the New York Yankees baseball team, and, she quipped, “listen to some music, take a walk in the woods.”
She hasn’t thought through potential next steps, but at a time when global progress on promoting more women to CEO positions appears to have stalled, she plans to help develop more talent to ensure that women are represented in the top ranks of corporate America.
“I think people like me, after we leave privileged CEO jobs, I don’t think we can go silent,” she said.
“We have to keep fighting the good fight to develop women, to mentor them, to support them, so that we can get more highly qualified women— and there’s plenty of them— into the boardroom, into C suites and into the ultimate CEO job.
My job is in fact just beginning once I leave PepsiCo because I can do things now that I was constrained to do when I was CEO of the company.”
Nooyi is leaving the top job at Pepsi at a time when overall soda consumption has dropped to its lowest level in more than 30 years as consumers try to avoid sugary drinks.
That’s led Pepsi and competitors to try to diversify into new products perceived as healthier, and to market zero-sugar versions of their soft drinks and retool their diet beverages.