By Amy Joyce
Washington Post Staff Writer
Tuesday, August 15, 2006
Indra K. Nooyi, chief financial officer of PepsiCo Inc., will become the company's chief executive in October, making her the second-highest-ranking woman in the Fortune 500.
Nooyi, 50, a native of India who joined PepsiCo in 1994, will be among a group of 11 Fortune 500 female chief executives. She will rank just below Patricia Woertz, chief executive of the agricultural processing firm Archer Daniels Midland Co., on the Fortune list, which ranks companies by gross revenue. Archer Daniels Midland No. 56 on the list, and PepsiCo is No. 61.
"It's a surprise that makes perfect sense," said John Sicher, editor and publisher of trade publication Beverage Digest. "Indra is not only an incredibly talented executive but a brilliant strategist. She is one of these executives who, in the chess game of business, moves ahead of other people."
Nooyi was described by the company as the primary architect of its restructuring, which included divestiture of its restaurants, the acquisition of Tropicana Products Inc. and merging with Quaker Oats Co. She will take over from chief executive Steve Reinemund, 58, who will retain the title of chairman and remain on the board until May.
Reinemund said he was stepping down to spend more time with his family. "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," he said in a statement. "It was, in many respects, the toughest and easiest decision of my life."
Nooyi, who became chief financial officer in 2001, will be the fifth chief executive in the company's history. "I am humbled by the opportunity to lead PepsiCo," she said in a statement.
Her duties as chief financial officer will be divided between Richard Goodman, chief financial officer of PepsiCo International; and Hugh F. Johnston, senior vice president.
Nooyi started her career in India, where she held product manager positions at Johnson & Johnson. She earned a master's degree at Yale, and later became director of corporate strategy and planning at Motorola Inc.
"Indra's record of transforming PepsiCo speaks for itself, and she has been an invaluable partner and ally throughout my time as CEO," Reinemund said in the statement. "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."
In 2005, women held 16.4 percent of corporate officer positions, up just 0.7 of a percentage point from 2002, according to a recent report from Catalyst Inc., a nonprofit research organization that studies women at work. PepsiCo's percentage in 2005 was 27.6.
"I think there is beginning to be greater recognition that there is untapped talent in the women officer ranks," said Deborah Soon, vice president for executive leadership initiatives at Catalyst.
Nooyi is part of an even rarer group: women of color in leadership ranks. Only Andrea Jung, chief executive of Avon Products Inc., currently fits that role in the Fortune 500. "She is going to be a wonderful role model for many other women who aspire to the corner office," Soon said.
Pepsi has a history of high-profile women. After Pepsi-Cola board chairman Alfred Steele died in 1959, his wife -- actress Joan Crawford -- was elected to the board of directors and was associated with the company for the rest of her life.
A former PepsiCo executive, Brenda Barnes, made her own mark in 1998 when she famously quit her position as chief executive of PepsiCo North America to spend more time with her family. Advocates worried that her departure would be used to support arguments that women could not handle family and career duties.
Last year Barnes became chief executive of Sara Lee Corp. after spending time on corporate boards and as interim president of Starwood Hotels & Resorts Worldwide Inc. She joined Sara Lee in 2004 as its chief operating officer.
Nooyi's expansion of the ranks of female Fortune 500 chief executives may soon be canceled out, however. Marion Sandler, chief executive of Golden West Financial Corp., No. 326 on the Fortune 500, is selling the company she and her husband run to Wachovia Corp.