PepsiCo CEO Indra Nooyi, one of the crucial distinguished girls to guide a Fortune 500 firm, will step down on October 3.
She’s going to stay as chairwoman of the board of administrators till early 2019. Nooyi, 62, can be changed by Pepsi’s ( international operations chief Ramon Laguarta, 54. )
Nooyi, who was born in India, is one in every of a handful of individuals of coloration to guide a Fortune 500 firm.
She helped flip Pepsi into one of the crucial profitable meals and beverage firms on this planet. Sales grew 80% throughout her 12-year tenure. She spearheaded Pepsi’s transition to a greener, extra environmentally conscious firm.
Nooyi has been with Pepsi for 24 years. Earlier than changing into CEO, she led the corporate’s growth by way of acquisitions, together with its 2001 buy of Quaker Oats. She earned $31 million final 12 months, and $87 million during the last three years, based on firm filings.
“Rising up in India, I by no means imagined I would have the chance to guide such a unprecedented firm,” she mentioned.
Nooyi grew up in a center class household in India. When she and her sister have been younger, their mom challenged them on the dinner desk every evening to provide speeches about what they’d do in the event that they have been prime minister or one other world chief, a Pepsi spokesperson mentioned. After the speeches, their mom would vote.
Her departure leaves solely 24 girls main Fortune 500 firms, after Beth Ford became the CEO of Land O’Lakes simply final week. Simply greater than a 12 months in the past, there have been 32 women leading Fortune 500 companies.
For the reason that center of final 12 months, a number of high-profile feminine CEOs have introduced they have been stepping down, together with Marissa Mayer at Yahoo, Irene Rosenfeld at Mondelez ( and Meg Whitman of )Hewlett Packard Enterprise (. )
Laguarta, Nooyi’s successor, has served as president of PepsiCo since September 2017, overseeing international operations, company technique, public coverage and authorities affairs. Laguarta can also be an immigrant, having been born in Spain. He had beforehand been CEO of the European and sub-Saharan African unit of Pepsi earlier than being named the corporate’s president.
Nooyi’s 12 years as CEO is pretty lengthy by requirements of the job. A research by Equilar discovered that the typical tenure for a CEO at massive firms is simply 5 years.
Nooyi praised her successor, calling him “precisely the suitable particular person to construct on our success.” She additionally acquired reward from analysts following her announcement.
“Now we have had the privilege of figuring out Nooyi for over a decade and have been very impressed along with her management acumen and really considerate strategy to managing PepsiCo by way of what has been a interval of very uneven waters for broader shopper packaged items,” mentioned Bonnie Herzog, senior analyst at Wells Fargo. “Nooyi has been an exemplary CEO and units the bar excessive.”
Nonetheless, Pepsi’s inventory lagged the broader market in recent times, and it has trailed rival Coca-Cola (. Shares are down 1.8% this 12 months, in contrast with a virtually 7% rise within the S&P 500 index. Each Coke and the S&P even have barely outperformed Pepsi throughout Nooyi’s tenure. Shares of Pepsi have been barely larger in early buying and selling. )
People’ rising distaste for sugary sodas has harm each Coke and Pepsi. In 2014 activist investor Nelson Peltz pushed for Pepsi to spin off its snack enterprise as a separate firm. However Nooyi fought calls to interrupt up the corporate. It turned out to be the suitable name, based on Neil Saunders, a managing director of GlobalData.
“Nooyi will go away an organization stronger than the one she inherited 12 years in the past,” Saunders mentioned. “It was her insistence on build up and sustaining a powerful snack enterprise that was most prescient. With demand for soda below strain, PepsiCo can now take consolation in the truth that it has a balanced portfolio of merchandise.”
Nooyi has confused the significance of shifting Pepsi towards more healthy meals and snacks, saying it was necessary for the corporate’s future due to customers’ growing consideration to well being.
She broke the corporate’s choices into three classes: Enjoyable For You contains conventional, higher-calorie delicate drinks and snacks. Higher For You contains weight loss program drinks and lower-calorie snacks, akin to potato chips which can be baked as an alternative of deep-fried. And Good For You contains meals akin to Quaker Oats oatmeal, Sabra hummus and Bare Juice smoothies.
In 2010, Pepsi set a purpose of tripling gross sales of its healthiest choices to $30 billion by 2020. By 2017, gross sales had grown solely 75%, to $17.5 billion.
In 2016, Pepsi revised the purpose. It now desires gross sales development of more healthy merchandise to outpace conventional drinks and snacks by 2025.
— CNNMoney’s Paul R. La Monica and Julia Carpenter contributed to this report.
CNNMoney (New York) First revealed August 6, 2018: 7:13 AM ET