Steve Reinemund to Retire as Chairman in May 2007
PURCHASE, N.Y., Aug. 14 / --PepsiCo announced today that the board of
directors has elected Indra K. Nooyi, 50, as CEO effective October 1,
2006. Steve Reinemund, 58, 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 Mr. Reinemund. "It was, in many respects,
the toughest and easiest decision of my life."
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Mr. 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 announced that Ms. Nooyi's current
responsibilities will be divided between two PepsiCo veterans. Richard
Goodman, 57, 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, 44, 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. Mr. Johnston has worked at PepsiCo for 17
years. Both executives will report to Ms. Nooyi.
Ms. 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 Mr.
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."
Steve 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.
Commenting on the transition, Mr. Reinemund said, "It has been a privilege
to lead PepsiCo and I have wonderful memories of my 22 years here. I have a
deep passion for the company and enormous respect for the people. However, I
also have a deep love for my family and I believe the time is right to devote
more attention at home, which I look forward to doing after completing a
smooth business transition over the next nine months."
Speaking on behalf of PepsiCo's board of directors, presiding director
Robert E. Allen said: "Steve's contributions as Chairman and CEO and
throughout his service to PepsiCo have been exemplary. In addition to the
growth of the company during his tenure, there are three big areas that will
mark his legacy to this company -- his passionate commitment to health &
wellness, diversity & inclusion and values-based leadership."
"At the very start of his tenure as CEO, he orchestrated the merger with
Quaker, which gave PepsiCo substantial momentum and enabled it to become an
industry leader in offering a pragmatic and balanced approach to delivering
health and wellness solutions for consumers. It is evident in his move to
quickly and voluntarily eliminate trans fats from Frito-Lay snacks, years
ahead of when companies were required to start reporting trans fat content in
"Steve has had a strong commitment to diversity and inclusion. From the
outset he has been relentless about attracting diverse talent and driving
innovation by embracing different viewpoints with an eye towards growing the
business by reaching out to the expanding population of diverse consumers."
"Finally, he has been the model of values-based leadership. His entire
tenure has been marked by a singular focus on always doing what is best for
PepsiCo and all its stakeholders, reinforced by the utmost integrity and total
transparency. That legacy extends to the thoughtful and orderly succession he
initiated many months ago with the board, which he has worked diligently to
carefully organize until the plans were recently completed. We are deeply
indebted to Steve and greatly appreciate his leadership, particularly in
leading the company over the last five years, and wish him and his family all
Speaking for the board, Mr. Allen continued, "We are exceedingly fortunate
to have a leader of Indra's caliber, vision and experience take the helm. She
has been instrumental to PepsiCo's solid direction and ongoing success and has
the complete endorsement and support of the board. We have seen firsthand the
difference that Indra has made on the business and the people, and we look
forward to working even more closely with her to usher in the next generation
of dramatic growth and advancement that has been a hallmark of PepsiCo since
Commenting on her appointment, Ms. Nooyi said, "I am humbled by the
opportunity to lead PepsiCo, and profoundly grateful to follow in the
footsteps of Steve Reinemund, Roger Enrico, Wayne Calloway and Don Kendall.
Steve has steered the company to a strong and enviable position, and he will
be a continuing source of wisdom and perspective. I am equally fortunate to
have amazing partners, not only on the board and executive team, but in the
157,000 bright, talented colleagues around the world who deliver the results
every day and are as committed as I am to continue capturing every growth
As CEO, Ms. Nooyi's leadership team of direct reports will include the
company's division chiefs -- Michael D. White, PepsiCo Vice Chairman and
Chairman & CEO of PepsiCo International, who is also a member of the board of
directors; Albert P. Carey, President & CEO of Frito-Lay North America; John
C. Compton, President & CEO of Quaker-Tropicana-Gatorade; Thomas Greco,
President of PepsiCo Sales; and Dawn Hudson, President & CEO of Pepsi-Cola
Corporate staff officers reporting to Ms. Nooyi will include Richard
Goodman as CFO and Hugh Johnston as EVP, Operations, along with Larry D.
Thompson, Senior Vice President, Government Affairs, General Counsel and
Secretary; Margaret D. Moore, Senior Vice President, Human Resources; Ron
Parker, Senior Vice President, Diversity and Inclusion; Antonio Lucio, Senior
Vice President, Chief Innovation and Health & Wellness Officer; and Tod J.
MacKenzie, Senior Vice President, Communications.
In closing, Mr. Reinemund said: "It gives me great pride that this
organization continues to develop the kind of talent that enables the board to
continue the unbroken tradition of selecting a strong CEO successor from
within the ranks of our leadership, and provides qualified leaders to
seamlessly backfill Indra's roles as well. I am absolutely confident that
PepsiCo's future is in very capable hands, starting with Indra and deep into
the organization. I truly believe she and her team will not only sustain the
achievements we have made, but will take PepsiCo to an even higher level of
success. I look forward to cheering their continued accomplishments."
PepsiCo is one of the world's largest food and beverage companies with
annual revenues of $33 billion. Its principal businesses include Frito-Lay
snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and
Quaker foods. Its portfolio includes 17 brands that generate $1 billion or
more each in annual sales.
This release contains statements concerning PepsiCo's expectations for
future performance. Any such forward-looking statements are inherently
speculative and are based on currently available information, operating plans
and projections about future events and trends. As such they are subject
to numerous risks and uncertainties. Actual results and performance may be
significantly different from expectations. The Company undertakes no
obligation to update any such forward-looking statements. Please see the
Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K, for a discussion of specific risks that
may affect performance.
At 11 a.m. (Eastern Time) today, the Company will host a conference call
with investors to discuss information contained in this press release. Note:
Members of the news media are welcome to listen-in on the call by webcast.
For details visit the Company's website at http://www.pepsico.com .
PepsiCo Executive Changes -- Biographies
Steven S Reinemund (58 years)
Prior to becoming Chairman & CEO in May, 2001, Mr. Reinemund served as
PepsiCo's President and Chief Operating Officer (COO) starting in 1999. From
1996 to 1999, he was Chairman and CEO of Frito-Lay's worldwide operations, and
from 1992 to 1996 he led the company's North American snack division. Mr.
Reinemund started his career with PepsiCo in 1984 at its Pizza Hut division
(now part of YUM! Brands, Inc.), and serving as CEO from 1986 until 1992.
Before joining PepsiCo, Mr. Reinemund held positions with the Roy Rogers
division of Marriott Corporation and IBM, and also served as an officer in the
U.S. Marine Corps. In addition to the PepsiCo board, he is a director of
Johnson & Johnson.
Indra K. Nooyi (50 years)
Ms. Nooyi most recently served as PepsiCo's President and Chief Financial
Officer (CFO), a position to which she was named in May, 2001, when she was
also elected to the board of directors. Before assuming this position in
2001, Ms. Nooyi had been Senior Vice President (SVP) and CFO since February,
2000. Between 1996 and 1999, Ms. Nooyi was SVP of Corporate Strategy and
Development. Prior to joining PepsiCo in 1994 as SVP of Strategic Planning,
Ms. Nooyi spent four years as SVP of Strategy and Strategic Marketing for Asea
Brown Boveri. From 1986 to 1990, Ms. Nooyi was Vice President and Director of
Corporate Strategy and Planning at Motorola, where she joined the company as
the business development executive for its automotive and industrial
electronics group. Before joining Motorola, she spent six years directing
international corporate strategy projects at the Boston Consulting Group. Ms.
Nooyi started her career in India, where she held product manager positions at
Johnson & Johnson and at Mettur Beardsell, Ltd., a textile firm. In addition
to the PepsiCo board of directors, Ms. Nooyi serves as a member of the board
of the Federal Reserve Bank of New York, Motorola, the International Rescue
Committee and Lincoln Center for the Performing Arts. She is also a Successor
Fellow of Yale Corporation and on the Advisory Board of the Yale School of
Management, the Board of Trustees for the Eisenhower Fellowships and Asia
Society, and a member of the Executive Committee of the Trilateral Commission.
Ms. Nooyi holds degrees from Yale University (Master of Public and Private
Management), the Indian Institute of Management (MBA) and Madras Christian
Richard Goodman (57 years)
Mr. Goodman most recently served as Senior Vice President (SVP) and Chief
Financial Officer (CFO) of PepsiCo International, a role he assumed in 2003.
Mr. Goodman joined PepsiCo in 1992 as Vice President of Corporate Strategic
Planning, International. He became CFO of KFC International and then SVP/CFO
of Taco Bell (both companies are now part of YUM! Brands, Inc.), when those
businesses were part of PepsiCo's restaurant operations. In 2000, Mr. Goodman
became General Auditor and head of Risk Management. He was named SVP/CFO of
PepsiCo Beverages International in 2001. Before joining PepsiCo, Mr. Goodman
was with W.R. Grace in a variety of global CFO positions. He holds degrees
(PhD, MBA, M.A. and B.A.) from Columbia University.
Hugh F. Johnston (44 years)
Mr. Johnston most recently served as Senior Vice President (SVP),
Transformation, with responsibility for major cross-business initiatives
including Project OneUp, Supply Chain and Go-To-Market strategies. He
previously served as Chief Financial Officer (CFO) for PepsiCo Beverages and
Foods, and as Senior Vice President (SVP) of Mergers & Acquisitions for the
corporation. Mr. Johnston held finance positions with General Electric before
joining PepsiCo in 1987. He is a member of the board of directors of Junior
Achievement in Chicago. Mr. Johnston holds degrees from the University of
Chicago (MBA) and Syracuse University (B.S.).