PepsiCo announced Aug. 14 that Steve Reinemund, chairman and CEO, will retire next May. "After 22 years with PepsiCo, more than five of them 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 Reinemund. "It was, in many respects, the toughest and easiest decision of my life."
The board of directors has elected Indra K. Nooyi as CEO effective Oct. 1. Reinemund will serve as executive chairman of PepsiCo and will continue to serve as a member of the board of directors until his retirement in May, 2007.
In addition, PepsiCo also reported that Nooyi's current responsibilities will be divided between two PepsiCo veterans. Richard Goodman, who has 12 years of service with the company and is 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 F. 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. Johnston has worked at PepsiCo for 17 years. Both executives will report to Nooyi.
Nooyi joined the $33 billion global convenient foods and beverages company in 1994 and has served as president and chief financial officer since 2001, when she was also named to PepsiCo's board of directors. As the fifth CEO in PepsiCo's 41-year history, she brings vast and unique skills to the job. She has directed the company's global strategy for over a decade and was the primary architect of PepsiCo's restructuring, including the divestiture of its restaurants into the successful YUM! Brands, Inc., the spin-off and public offering of company-owned bottling operations into anchor bottler Pepsi Bottling Group (PBG), acquiring Tropicana, and the merger with Quaker Oats that brought the vital Quaker and Gatorade businesses to PepsiCo. Recently, she has been driving critical cross-business initiatives to enhance operations and enable PepsiCo to meet the changing needs of consumers and retailers.
"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. "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. Having worked side-by-side with Indra for many years, I am convinced she is more than qualified and clearly ready for her new role leading PepsiCo."
Reinemund, a 22-year PepsiCo veteran, has led the corporation since 2001. From 2001 to 2005, PepsiCo's revenues increased by more than $9 billion, net income increased by 70%, earnings per share increased by 80%, its annual dividend doubled and the company's market capitalization surpassed $100 billion. During 2006, PepsiCo has continued to build on that growth record. Last month, PepsiCo announced strong second-quarter earnings across all businesses, with a 12% increase in net revenue and 15% EPS growth. In conjunction with today's announcement, PepsiCo reiterated its confidence for the year and reconfirmed its forecast for 2006 full-year earnings of at least $2.95 per share.