PepsiCo Chairman-CEO Steve Reinemund to Retire

President-CFO Indra K. Nooyi Gets Top Spot in October

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CHICAGO (AdAge.com) -- In a surprise move, PepsiCo today said Chairman-CEO Steve Reinemund will retire in May 2007, and President-Chief Financial Officer Indra K. Nooyi will become CEO effective Oct.1.
Steve Reinemund will remain with the company as executive chairman until his retirement.
Steve Reinemund will remain with the company as executive chairman until his retirement.

Mr. Reinemund, 58, has been with the $33 billion soft-drink and snack-food giant for 22 years and held the top post for the last five. Under his leadership, the company in December eclipsed the stock market capitalization of rival Coca-Cola Co. for the first time.

Time with family
"I have a deep passion for the company and enormous respect for the people," Mr. Reinemund said in an early morning statement. "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."

Until his retirement, he will be executive chairman and remain on the board of directors.

"While we are surprised by this move, PepsiCo's deep bench gives us confidence that the strong momentum the company has delivered should continue," Bill Pecoriello, beverage analyst for Morgan Stanley, wrote in a note this morning. "Given [Ms. Nooyi's] involvement in the company's strategy, vision and her current role and president and CFO, we would expect a seamless transition."

A 12-year company veteran, Ms. Nooyi, 50, has held her current post since 2001. She becomes the fifth CEO in the company's 41-year history and will be one of the most powerful women in business.

Architect of restructuring
She is credited as one of the chief architects of the company's restructuring that included divesting its restaurant and bottling operations that resulted in Yum Brands and Pepsi Bottling Group. The company later acquired Tropicana and merged with Quaker Oats Co., bringing the Quaker and Gatorade brands into the company portfolio.

"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," Mr. Reinemund said in the statement. "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."

In the statement Ms. Nooyi said, "I am humbled by the opportunity to lead PepsiCo."
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