Indra Nooyi, PepsiCo’s first female chief executive, is stepping down after 12 years at the helm of the food-and-beverage giant.
Nooyi will stay on as chairman until early 2019. When Nooyi took the reins, she was Pepsi’s first foreign-born chief executive. She is also one of the few minority female leaders of a major corporation, and her departure focuses attention on the absence of women — particularly women of color — in some of the United States' most high-profile corporate roles.
Nooyi, 62, will be succeeded Oct. 3 by Ramon Laguarta, who has been Pepsi’s president since last year and has been with the company 22 years.
Born in Chennai in southern India, Nooyi joined Pepsi 24 years ago. In 1994, she was the company’s senior vice president of strategy and became Pepsi’s chief executive in 2006. She is one of only 25 female chief executives leading companies in the Standard & Poor’s 500 Index as of July 13, according to Catalyst, a nonprofit research and consulting firm focused on women’s advancement. While Nooyi will be stepping down, Kathy Warden was named to lead Northrop Grumman Corp., effective Jan. 1 next year.
“Leading PepsiCo has truly been the honor of my lifetime, and I’m incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve,” Nooyi said in a statement. “Growing up in India, I never imagined I’d have the opportunity to lead such an extraordinary company.”
Nooyi’s tenure was marked by changing consumer tastes for beverages and snacks, and under her leadership, the company known for colas and chips expanded to include more healthful alternatives. Pepsi’s net revenue grew from $35 billion in 2006 to $63.5 billion in 2017, the company said. From December 2006 to December 2017, Pepsi delivered a total shareholder return of 162 percent.
Nooyi’s tenure was more than twice as long as the median chief executive of a large publicly traded company, according to Equilar. It included a campaign by Nelson Peltz, the activist investor behind Trian Fund Management, to merge with the snacks giant Mondelez International and shed its beverage business. But Nooyi fended him off without a break-up — Trian exited his stake in Pepsi in 2016. Her tenure has included acquisitions of healthier foods, such as a Brazilian coconut water company, a stake in hummus maker Sabra, and Pepsi’s recent announcement to purchase Bare Foods, a maker of baked fruit and vegetable snacks.
Nooyi is known to be candid and direct, compared with many of her chief-executive peers, speaking openly about subjects, such as her family or the challenges of being a mother who works outside the home — but at times speaking off the cuff and prompting unintended controversies.
In an interview at the Aspen Ideas Festival in 2014, Nooyi was asked about a widely read article by Anne-Marie Slaughter in the Atlantic about professional women and work-life balance. Nooyi agreed that women can’t have it all, telling stories about the importance of developing coping mechanisms and a support network and how she dealt with not making it to events like class coffees at her daughters’ school.
“The first few times I would die with guilt,” she said, saying she would call the school to ask for a list of other mothers who were not there, to counter her daughters' protests — as well as how she enlisted the help of administrative assistants to ask the right questions when her daughter would call the office to ask about things like watching video games.
“If you don’t develop mechanisms,” she said, “it cannot work. Stay-at-home mothering was a full-time job. Being a CEO for a company is three full-time jobs rolled into one. How can you do justice to all? You can’t.”
Nooyi’s remarks at times sparked unintentional flare-ups. After Nooyi told an interviewer of the “Freakonomics Radio” podcast that women “don’t like to crunch too loudly in public” and that Pepsi was looking into design and package differences for female customers — “women love to carry a snack in their purse” — an online uproar erupted over “Lady Doritos," prompting Pepsi to clarify it was a misunderstanding.
And after the 2016 presidential election, Nooyi’s remarks about how some employees were “crying” and asking questions about their safety — she said, “we have to come together and life has to go on” — sparked calls for a boycott of Pepsi products on social media by Trump supporters.
Nooyi’s exit thins the ranks of major U.S. companies led not only by women, but by minority women. After former chief executive Ursula Burns’s recent departure from Xerox, there are no African American women leading an S&P 500 company, and women from other racial or ethnic backgrounds are also extremely scarce in the corner office. In 2017, Geisha Williams became the first Latina chief executive of a Fortune 500 company, PG&E Corp.; Advanced Micro Devices is led by Lisa Su, who was born in Taiwan.
Researchers say there are a host of factors that have kept more women of color from reaching the top job that go well beyond questions about the pipeline — the numbers of women available on the next step down from chief executive. From ingrained stereotypes to a lack of high-level advocates willing to “sponsor” women of color, “there are these levels of trust and social comfort that play in, and it’s not just about competence or capability,” said Ilene Lang, the interim CEO of Catalyst.
Laguarta will take the reins of the company in October. In September last year, he was named president of Pepsi, leading global operations, corporate strategy, public policy and government affairs. He previously ran Pepsi’s operations in Europe and sub-Saharan Africa. The rest of Pepsi’s leadership team will remain the same, the company said.
“Today is a day of mixed emotions for me. This company has been my life for nearly a quarter-century, and part of my heart will always remain here,” Nooyi said.