In a sudden move, Nooyi quits as CEO of PepsiCo after
12 yrs
Indra Krishnamurthy Nooyi, the Chennaiborn, IIM- and
Yale-educated executive who raised both the bar and the glass ceiling in a
global corporate world dominated by men, is stepping down after 12 years at the
helm of beverage and food behemoth PepsiCo.
Nooyi, 62, will make way for company insider Ramon
Laguarta, a 22-year PepsiCo veteran, but she will remain chairwoman until early
2019, the company said. “Leading PepsiCo has truly been the honour 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,” said Nooyi. “Growing up in India, I never imagined
I’d have the opportunity to lead such an extraordinary company.”
Indeed, her India background and her gender animated
both her rise and her profile in an American corporate world where female CEOs
account for only about 5% of the Fortune 500 companies. Her departure leaves
only 24 women leading Fortune 500 companies. She was frequently voted in
various polls as one of the most powerful female executives in the world. Nooyi
was Pepsi-Co’s first female CEO, and also the first foreign-born CEO.
Nooyi was both criticised,
admired for diversification
On both counts she blazed an unprecedented trail
after she first joined the company in 1994 as head of strategy after brief
stints in consulting firms Booz Allen Hamilton and Boston Consulting Group, and
in Motorola and Asea Brown Boveri.
Joining Pepsico as a young executive, Nooyi was
promoted to chief financial officer (CFO) in 2001 and was named CEO in 2006,
becoming the fifth CEO in the company’s 54-year history at a time female CEOs,
much less a brown-skinned foreigner, was unheard of.
During her dozen years at the helm, Nooyi led
Pepsi-Co’s transition from a seller of sugary soft drinks and sodas and fatty
foods to a greener more health and environment conscious company even at the
risk of hurting its bottomline, although some critics saw her effort as
inadequate. Even before she became CEO, she oversaw acquisitions such as the
purchase of Quaker Oats in 2001, eventually leading to products such as Quaker
Oats Upma, Nutri Idli, Nutri Khichdi, etc, now seen on Indian shelves.
She reclassified Pepsi-Co's products into three
categories: “Fun for you” (such as potato chips and regular soda), “Better for
you” (diet or low-fat versions of snacks and sodas), and “Good for you” (items
such as oatmeal). As CEO, she later oversaw acquisition of a 50% stake in U.S.
hummus maker Sabra in 2008, formed a joint venture with Saudi Arabian dairy
giant Almarai in 2009, and bought Brazilian coconut water company Amacoco. In
2010, she oversaw the $5.4 billion acquisition of Russian dairy and fruit-juice
maker Wimm-Bill-Dann.
Such efforts to push the company into healthier, more
nutritious products with a more diverse portfolio won her admirers but she was
also attacked by critics who felt she was slowing down growth even though under
her leadership the company generated total shareholder return of 162%, growing
its net revenue from $35 billion in 2006 to $63.5 billion in 2017.
“Nobody’s going to remember you for delivering
earnings to stockholders; they will remember you for the lasting impact you
made on society,’’ she said in a 2009 speech as she pushed PepsiCo into
uncharted but healthy areas.
She ramped up R&D spending at the company and
sent researchers to India to study ayurvedic medicine and Africa and the Amazon
jungles to learn about ancient grains, berries and plants.
Among her critics was the activist investor Nelson
Peltz of the Trian Fund Management LP, who dismissed her health and nutrition
push as a distraction and accumulated stock in a campaign to split up PepsiCo so
shareholders could milk more from the company. Nooyi weathered the storm and
continued the journey into healthy areas, acquiring KeVita, a leading maker of
Kombucha, a fermented tea drink.
She was also politically outspoken, once creating a
stir in a speech to the Columbia business school graduating class by ticking
off a critique of the Bush administration (and the US) with her fingers till
only her middle finger remained. Describing the world’s five major continents
as being like the five fingers on a human hand, she called the middle finger an
anchor for the functions of the hand, saying, "What is most crucial to my
analogy... is that each of us in the US—the long middle finger—must be careful
that when we extend our arm in either a business or political sense, we take
pains to assure we are giving the hand ... not the finger.”
More recently, she was a supporter of Hillary Clinton
in the 2016 presidential campaign, and confessed after her defeat in the
election that she found herself having to “answer a lot of questions, from my
daughters, from my employees—they were all in mourning”.
Chidanand.Rajghatta@timesgroup.com
TOI 7AUG18
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