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| Indra "Middle Finger" Nooyi promoted to CEO at Pepsico |
| 2006-08-14 |
| The Pepsico CFO who likened the US to a middle finger has now been pushed upstairs. PepsiCo Inc. (NYSE:PEP - news) on Monday promoted its president and chief financial officer, Indra Nooyi, to chief executive, succeeding Steve Reinemund, whose decision to retire after a successful five-year run caught some on Wall Street by surprise. Nooyi, who has been involved in much of the major strategic planning for the company for several years, was expected to lead a smooth transition, and the stock rose slightly. "I don't think it's a surprise to anyone that the choice was Indra. The surprise was Steve stepping aside," said David Kolpak, an analyst at Victory Capital Management, which owns 1.5 million PepsiCo shares. Reinemund, 58, said he will leave next May to spend more time with his family. He will serve as executive chairman and as a director of PepsiCo, which makes Pepsi soda and Frito-Lay snacks, until his retirement. The 50-year-old Nooyi, who takes over effective October 1, has been president and chief financial officer of PepsiCo since 2001, and was favored to take over the helm. "Given Indra's involvement in the company's strategy, vision and her current role as president and chief financial officer, we would expect a seamless transition," William Pecoriello, an analyst at Morgan Stanley, said in a research note. Pecoriello called Reinemund's retirement a surprise, adding he had the "highest confidence" in Nooyi's ability to "lead the organization going forward into many years of solid performance." The stock rose 25 cents to $63.58 on the New York Stock Exchange on Monday. The shares are up about 44 percent since April, 2001, compared with a 5 percent decline in Coca-Cola Co. (NYSE:KO - news) shares over the same period. PepsiCo stock is also up nearly 80 percent from a low under Reinemund of $35.60 in September 2002. The largest U.S. company in terms of revenue run by a woman is grain processor Archer Daniels Midland Co. (NYSE:ADM - news), which named Patricia Woertz as CEO in April. With Nooyi's appointment, PepsiCo would become the second-largest company headed by a woman. Reinemund had moved back to Dallas about three years ago to be closer to his family, so the decision to retire was not a surprise, said Ken Harris, a partner in consulting firm Cannondale Associates. Harris, who used to work with Nooyi, said that she brings several important qualities to the chief executive's job. "No. 1, she's smart, smart, smart," Harris said. "The next thing is that she is a very good people manager." Richard Goodman, 57, currently CFO of PepsiCo International, will become CFO of the corporation, and Hugh Johnston, 44, was promoted to the newly created position of executive vice president, operations. He had been PepsiCo's senior vice president, transformation. Since Reinemund became chairman and CEO in May, 2001, PepsiCo has expanded its business. Most notably, it acquired Quaker Oats Co. for $13 billion three months after he took over, adding Gatorade sports drink and a host of food brands to the company's portfolio. During his tenure, PepsiCo evolved from a company known mostly for selling soda pop and salty snacks into a $33 billion food company that has embraced the push into healthier options like Tropicana juices, Aquafina water and whole grain Quaker Oats Cereals, while seeing earnings soar. "He's an ex-Marine. He prides himself on staying in shape, and health and wellness has been a real mantra for him at the company," said analyst Kolpak. Kolpak noted that PepsiCo was ahead of most, if not all, of the food industry, in removing artery-clogging trans fats from its products. From 2001 to 2005, the company's earnings per share jumped 80 percent, its dividend doubled, and its market capitalization increased to more than $100 billion. |
| Posted by:Zhang Fei |
| #15 Perhaps she secretly craves that "Middle Finger". Wouldn't be the first time an accuser had a crush on the accused. Be it on or off, she can nonetheless get f&cked. Time to short Pepsico, they must not value their American consumer base too much. |
| Posted by: Zenster 2006-08-14 21:38 |
| #14 Coke Zero. And, for the ultimate in "More Americana Than Thou", remember that Disneyworld only serves Coke products. |
| Posted by: Robert Crawford 2006-08-14 18:30 |
| #13 Pepsi sponsors Jeff Gordon's 24 car - enough reason to dislike em. That said - I drink it |
| Posted by: Frank G 2006-08-14 18:11 |
| #12 For a company that hails its roots from Fayetteville NC they have really gone to hell. Guess Pepsi and Fritos are now RC cola and Moon Pies instead!!!! |
| Posted by: 49 Pan 2006-08-14 18:02 |
| #11 I had to go back and look. May 2005. I haven't had a Pepsi in 15 months. Just tell Indra to consider it my middle finger... |
| Posted by: tu3031 2006-08-14 17:02 |
| #10 Well, crud. #9 was me. And on my home computer, too! :-( |
| Posted by: Barbara Skolaut 2006-08-14 16:37 |
| #9 She's been promoted? I'll pop open a DIET COKE in celebration. Oh, wait.... |
| Posted by: Clesh Ebbealing8178 2006-08-14 16:36 |
| #8 Here's the powerline blog link with some details. I'll venture if she's that smart, she won't make the same mistake twice. Boycotted Pepsi since I read this... http://powerlineblog.com/archives/010478.php |
| Posted by: Warthog 2006-08-14 16:29 |
| #7 I just drank my last Mountain Dew. Man this is going to be tough, I love that crap. Thanks a pantload Pepsi. |
| Posted by: Mike N. 2006-08-14 16:06 |
| #6 Haven't you heard? Soft drinks kill ya. |
| Posted by: mcsegeek1 2006-08-14 15:59 |
| #5 So glad I've never liked Pepsi. Always drank Coke and currently own Coca-Cola shares. Never will buy Pepsico and this really seals it. |
| Posted by: SOP35/Rat 2006-08-14 15:58 |
| #4 One more of the many reasons for me never to buy Pepsi. |
| Posted by: DarthVader 2006-08-14 15:29 |
| #3 So I just buy RC. |
| Posted by: 3dc 2006-08-14 15:25 |
| #2 If she continues her little habit of making assumptions about her audience, the transition may go smoothly but the tenure... maybe not so good. I'm surprised by this promotion; PepsiCo is known in this part of the world as one of the places where Procter&Gamble graduates go to make money. And Proctoids as a group are pretty patriotic -- they know P&G is the best company to work for, and the US is the best country to live in (even those who leave the company, either sad because it just wasn't a good fit, or for more rapid opportunities available elsewhere). As a group they're awfully cute about it all. ;-) |
| Posted by: trailing wife 2006-08-14 14:49 |
| #1 Ken, I don't care if she's smart, smart, smart. Her attitude, both elitist and anti-American, caused me and mine to buy not another Pepsico product. Dumped my stock and I haven't bought any Pepsico products since that Commencement address. |
| Posted by: Quana 2006-08-14 14:36 |