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NEW YORK -- PepsiCo named its first female CEO on Monday to replace Steve Reinemund, 58, who surprised Wall Street by announcing his retirement after 22 years with PepsiCo and the past five as its successful chairman and CEO.
Indra Nooyi, 50, president and chief financial officer, becomes CEO Oct. 1. That will make PepsiCo the third-largest U.S. company by revenue led by a woman, after Archer Daniels Midland and Kraft Foods. Reinemund will remain executive chairman through May, when he retires.
"I'm convinced that this is the right time for me to turn the page to a new chapter in my life and for Indra to assume the reins at PepsiCo," Reinemund said in a conference call.
He said succession planning was kept quiet, but that he informed the board a year ago. He said Monday he is retiring to spend more time with his wife, Gail, and four sons, ages 13 to 26. He took over Purchase, N.Y.-based PepsiCo in 2001, after cutting costs and boosting profits at its largest unit, Frito-Lay. It is based in Dallas, where his family still lives.
Nooyi and Vice Chairman Mike White were top contenders for the job.
Under the former Marine and intense competitor, revenue rose by more than $9 billion, earnings per share rose 80%, and market capitalization passed Coca-Cola for the first time in December, when it hit $100 billion.
"I'm assuming the new role when Pepsi's businesses are performing well," Nooyi said in the call.
She has worked for the $33 billion beverage and snack food giant since 1994 and became president, chief financial officer and a director in 2001. She and Reinemund led successful integration of the $13.8 billion acquisition of Quaker Oats and its flagship Gatorade brand.
Earlier, Nooyi helped lead Pepsi's spinoffs in 1997 of its fast-food stores (Pizza Hut, KFC and Taco Bell), and in 1998, of its bottling group.
Also in 1998, she was deeply involved in the $3.3 billion purchase of juice maker Tropicana.
Nooyi is known as a music-lover, had a stint in an all-girl rock band in her teens and today sometimes follows up meetings with karaoke.
A married mother of two daughters, Nooyi was born in Madras, India. She has an MBA from the Indian Institute of Management, Calcutta, and came to the USA for post-graduate work in management at Yale University in 1980.
"It's a fantastic signal to Corporate America in terms of diversity and inclusion," says Caroline Levy, a beverage analyst at UBS.
Nooyi's former duties will be shared by two Pepsi veterans: Richard Goodman, 57, will become CFO, and Hugh Johnston, 44, will take the newly created job of executive vice president, operations.
PepsiCo shares closed up 62 cents, at $63.95.
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