Pepsi Restructures to Ensure Succession 'Choice of Five'

07 November 2007

PURCHASE, New York: Although PepsiCo chairman/ceo Indra Nooyi (52) has no intention of retiring yet awhile, her revamp of the company's senior ranks this week is directed precisely toward that end.

"The goal is to have this great stable of great operating executives," she told the Wall Street Journal. When the issue of succession eventually arises, she wants PepsiCo's board to have "five people to pick from, not just one person".

As part of that engineering process, Nooyi is dividing Pepsi's current domestic and international businesses into three new units:

  • Americas Foods, under the baton of John Compton, (46), combining North American and Latin American food businesses.

  • Americas Beverages, run by Massimo d'Amore (51), encompassing the company's beverage businesses in the same regions.

  • International, melding both food and beverage operations across the rest of the globe, led by incumbent international boss Michael White (55).
In addition to the anointed trio, there is a wild card in the shape of Hugh Johnston (46), currently evp operations, with oversight of global transformation, supply-chain, procurement and information-technology activities.

These duties now pass to White, while Johnston shoulders the responsibilities of Dawn Hudson, departing president/ceo of Pepsi's North American beverage business.

According to the company, Hudson is quitting for the most bewhiskered platitude in the book: "To pursue other career opportunities".

Word from Pepsi's corridors of power is that Hudson is quitting because she feels "removed from the top" after last year's management revamp. There is another term for such a situation, albeit used only in a courtroom contractual case.

Given the formidable numeracy of WARC News' readers, no prizes for spotting that three plus one doesn't add up to Nooyi's stated succession goal of "five people to pick from".

But the astute Ms Nooyi knows there's merit in a situation that keeps folk guessing and on the tip of their corporate toes.

She should, however, heed the immortal Mae West's warning: "Don't keep a man guessing too long - he's sure to find the answer somewhere else."

Data sourced from Wall Street Journal Online. additional content by WARC staff