Published: Mon, August 06, 2018
Money | By Armando Alvarado

PepsiCo CEO Nooyi to step down, Ramon Laguarta to succeed

PepsiCo CEO Nooyi to step down, Ramon Laguarta to succeed

Indra Nooyi of PepsiCo has announced that she is stepping aside as CEO after some 12 years at the helm.

Nooyi will remain chairman of the board until early 2019.

Nooyi, who took over as chief executive of PepsiCo in 2006, has resisted calls by an activist investor to spin off the company's beverage business, which has struggled in North America, from its better-performing Frito-Lay snacks business.

The board of directors elected Ramon Laguarta, who has been with the company for 22 years, to succeed Nooyi as CEO. Under her chairmanship, the company also improved in environmental sustainability metrics.

Recently, Nooyi has focused on reinvigorating sales of its marquee sodas by stepping up marketing efforts, in a bid to win market share from Coca-Cola Co. Before becoming CEO she led the company's expansion through acquisitions, including its 2001 purchase of Quaker Oats Co. All those companies changed CEOs in roughly the previous year.

"Growing up in India, I never imagined I'd have the opportunity to lead such an extraordinary company", Nooyi said in a prepared statement Monday.

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Nooyi, who was born in India, is a rarity on Wall Street as a woman and a minority leading a Fortune 500 company.

During her 12-year stint as the CEO, PepsiCo's net revenue grew from $35 billion in 2006 to $63.5 billion in 2017, a compound annual growth rate of 5.5%, the company has said.

Nooyi will be succeeded on October 3 by Ramon Laguarta, who has served as Pepsi's president since previous year. He previously served as chief executive of the Europe Sub-Saharan Africa region.

"Ramon Laguarta is exactly the right person to build on our success". She also received praise from analysts following her announcement.

"With a deep understanding of PepsiCo's worldwide operations, and a broader understanding of the total company portfolio in his role as president, we believe that Laguarta is well-placed to continue executing on PepsiCo's current strategy", analysts at Cowen & Co said. Shares of Pepsi were slightly higher in early trading. But Nooyi was able to fight off calls to break up the company.

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