PepsiCo 'Stretches' Managers At Top -- WSJ
July 21 2017 - 3:02AM
Dow Jones News
CEO Indra Nooyi gives possible successors new responsibilities,
but is sticking around
By Jennifer Maloney
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 21, 2017).
PepsiCo Inc.'s longtime leader, Indra Nooyi, is promoting one of
her lieutenants into the vacant No. 2 position at the company, in a
move that shuffles potential successors to her job.
Ramon Laguarta, head of the company's Europe and sub-Saharan
Africa business, will become PepsiCo's president, a headquarters
role covering global operations, corporate strategy, public policy
and government affairs. The spot has been unoccupied for nearly
three years.
Mr. Laguarta's current duties will be given to Laxman
Narasimhan, who will continue to oversee the snack-and-beverage
giant's Latin America division. Both appointments will take effect
Sept. 1.
In an interview, Ms. Nooyi, 61 years old, said she intends to
keep running the Purchase, N.Y.-based company "for the foreseeable
future." The two promotions are the latest in a series of moves
over the past few years to "stretch" executives and prepare them to
be contenders for the top job, she said. The company's division
heads will continue to report to her.
The leading internal candidates to succeed Ms. Nooyi include Mr.
Laguarta, Mr. Narasimhan and Hugh Johnston, PepsiCo's chief
financial officer, who in 2015 was named vice chairman and put in
charge of e-commerce and information technology.
PepsiCo, which has a market value of about $165 billion, has
been using higher prices, smaller packaging and a broader product
portfolio to help boost results amid shifting consumer tastes that
are pressuring the packaged-food and beverage industries. Despite
falling soda demand and other industry challenges, the company's
profit margins are rising and its shares are trading near all-time
highs.
During Ms. Nooyi's 11-year tenure, two potential successors have
been promoted to the No. 2 role of president only to leave the
company later on. The job has been vacant since the 2014 departure
of Zein Abdalla.
Ms. Nooyi, who was chief financial officer and president before
she was named chief executive in 2006, said Mr. Laguarta shouldn't
be presumed to be her successor.
She took over as chairman in 2007 and led the spinoff of Yum
Brands Inc. as well as acquisitions of Tropicana and Quaker Oats.
She has fended off calls to break up the company and has pushed
into healthier snacks and beverages.
"There is no heir apparent," she said. "When the time comes for
succession, whenever it is, I think the wonderful thing is our
board is going to have so many people to choose from."
Mr. Laguarta, 53, a native of Barcelona, joined the company in
1996 and has spent most of his career rising through the ranks of
the European operations. He has an M.B.A. from Spain's ESADE
business school. He speaks English, Spanish, French, German, Greek
and Catalan and will relocate to the U.S. from Geneva in his new
role.
Mr. Narasimhan, 50, was previously a senior partner at McKinsey
& Co., where he spent 19 years before joining PepsiCo in 2012.
He worked as senior vice president and finance chief at PepsiCo
Americas Foods before rising to Latin America chief in 2014.
Ms. Nooyi said she wanted Mr. Laguarta, whom she called "a great
operating executive," to gain experience at the corporate
headquarters, where his mandate will be to increase sales and
productivity to fund investments, she said.
Meanwhile, she said she wanted to push Mr. Narasimhan to "lift
and shift ideas" across Europe, Africa and Latin America to
accelerate his divisions' growth. He has "evolved from brilliant
strategist to a very good operating executive," Ms. Nooyi said.
As Mr. Laguarta takes on some of Ms. Nooyi's responsibilities,
she said she would turn her focus to PepsiCo's future. Letting
other executives "come into their own, but being there as a helping
hand, is my job at this point," she said.
Write to Jennifer Maloney at jennifer.maloney@wsj.com
(END) Dow Jones Newswires
July 21, 2017 02:47 ET (06:47 GMT)
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