As PepsiCo’s CEO Plans Exit, Women’s Corporate Clout Fades

By Julie Creswell | August 13, 2018

In her 12 years as chief executive of PepsiCo, Indra K. Nooyi has been part of an elite club: She is one of only a small number of women leading large corporations. It is a position that has often meant her every move received greater scrutiny than the actions of her male peers.

That was true again Monday, when Nooyi, 62, announced she was giving it all up and handing the reins of the multinational conglomerate to Ramon Laguarta, a 22-year veteran of the company in October.

Her departure served as a stark reminder that the absence of women at the very top of corporate America remains a problem. She was one of 11 such women at the helm of the biggest U.S. companies in 2006. She’s now one of only 25 in the Standard & Poor’s 500. She will remain PepsiCo’s chairwoman until early 2019, the company said.

In recent months, the list of departing female chief executives has included Denise M. Morrison at Campbell Soup, Margo Georgiadis at the toy company Mattel, Sherilyn S. McCoy at Avon, Irene Rosenfeld at Mondelez and Meg Whitman at Hewlett-Packard. All five have been replaced by men.

The number of women in top jobs has, in fact, fallen sharply.

“I hate seeing her step down this particular year because we’ve had a 25 percent drop in women CEOs at major firms, and this is a big loss,” Jeffrey A. Sonnenfeld, the senior associate dean of leadership programs at the Yale School of Management, said of Nooyi.

In some cases, the women at the top have been pushed out by activist investors seeking a shake-up in the executive suite. “A lot of women have been easy targets when their performance weakens,” Sonnenfeld said. “Maybe unconsciously, institutional investors get weak-kneed and don’t back them up and boards of directors collapse like lawn furniture.”

Others tie the lack of women at the top not only to the choices of individual executives, but to a wider culture that is biased against women in the workplace, some experts argue. Women struggle as they adapt their careers to the demands of child-rearing while they are often viewed differently because they do not fit the mold of the leaders, overwhelmingly men, who preceded them.

“We have found that overall, we are stuck. We are seeing very little movement,” said Lareina Yee, senior partner at McKinsey & Co. in the global technology practice and co-author of the report Women in the Workplace, which found that only one in five of the most senior executives at U.S. companies is a woman. “We see that entry levels don’t look that bad, but women are not promoted at the same rates as men to the first manager role. We start to see the imbalance of opportunity early on.”

Nooyi’s impact on PepsiCo cannot be overstated. Over the past decade, she has transformed the company dramatically, expanding its presence in international markets, and also shifting its products increasingly into healthier beverage and snack choices.

In addition to Doritos and Mountain Dew, it now offers customers baked chips and water brands like Lifewtr and Bubly, and it recently acquired Bare Foods, a maker of baked fruit and vegetable snacks. As Nooyi steered the change, she clashed with activists and other investors who told her that her ideas were flat-out wrong.

Today, half of the company’s revenues come from healthier drink and snack products, up from 38 percent in 2006.

Still, Nooyi spent much of her tenure at the top defending her strategy to critics, who included activist investors. When PepsiCo lost market share on its namesake product a few years ago, critics claimed Nooyi was too focused on the “healthy” strategy. Others, including billionaire activist Nelson Peltz of Trian Fund Management, wanted the company split into two, a beverage giant and a snack king.

Nooyi held firm. Since she took over, revenue has grown to $63.5 billion from $35 billion in 2006, while the company’s share price has nearly doubled in that time.

In an emailed statement, Peltz congratulated Nooyi on a “strong decade-plus of corporate leadership” at PepsiCo. “We wish her all the best.”

In an interview, Nooyi said she was stepping down now, in part, because she wanted to spend more time with her 86-year-old mother. “You reach a point where you get tired,” Nooyi said. “Physically tired. And your family starts to demand more time of you. I’ve reached that point.”

Inside PepsiCo, Nooyi was known for working incredibly long hours — as many as 20 hours a day, often seven days a week. When asked Monday whether she felt that made her a good role model for other women, Nooyi said, “probably not.”

“But you have to remember when I started working in this corporate world, there were hardly any women in the jobs I was in. At that time, 30 or 40 years ago, expectations for women were unreasonable. We had to produce a better product and do everything much better than the men in order to move ahead,” Nooyi said.(BEGIN OPTIONAL TRIM.)Nooyi’s departure comes as the outlook for consumer packaged goods companies remains murky. It is difficult for big brands to raise prices as they increasingly face competition on shelves from private-label store brands. There has also been an extreme fragmentation of the food industry as big brands like PepsiCo face competition from startup snack companies.

And marketing to millennial consumers, whether through social media influencer campaigns or viral videos, has proved tricky. A year ago, Pepsi had to quickly pull an ad featuring Kendall Jenner that critics said trivialized the Black Lives Matter movement.

Born in Chennai, in southern India, Nooyi joined PepsiCo in 1994 and held a series of strategy roles before becoming its chief financial officer in 2000, and in 2006, its chief executive.

She said she believed the workplace, in general, had improved for women in the past decade. “Women are not held to unreasonably high standards these days,” Nooyi said. “That’s not a blanket statement. There are still places where it is a boys’ club, but I do think we’re moving to a place where we’re letting the best candidates move ahead.”

While Nooyi was often held up as an example of a woman in a very powerful position, she was a rare chief who did not claim to have it all worked out. A wife, mother and chief executive of a global conglomerate, Nooyi played down the notion of perfect balance.

“I don’t think women can have it all,” she said at the Aspen Ideas Festival in 2014. “We pretend we have it all.”

She told a story about getting a call when she was at work late one night from the chairman and chief executive of PepsiCo that she was going to be named president of the company and put on the board of directors.

She left work to tell her family, but when she arrived home, she was met by her mother, who told her to go back out and buy milk for the morning.

She did, banging the milk on the counter and telling her mother that she had just been named president and placed on the board of a large company, and all her mother wanted her to do was to go out and get the milk.

As she recalled, her mother said she might be the president of PepsiCo. She might be on the board of directors. “But when you enter this house, you’re the wife, you’re the daughter, you’re the daughter-in-law, you’re the mother. You’re all of that,” Nooyi told the conference. “So leave that damned crown in the garage.”

Over the years, Nooyi got advice from several powerful male leaders. Shortly after she had taken over PepsiCo as its chief executive in 2006, she had a meeting with Steve Jobs, the co-founder and at the time, the chief executive of Apple. Jobs, a driven visionary who was also known for his ruthless temper, advised Nooyi to throw the occasional temper tantrum, Nooyi recalled at a DealBook conference in 2016.

“I’m beginning to use certain words a little bit more freely, and I am screaming a bit more, pounding the table,” Nooyi said at the conference, noting that was not really her style. “But it is effective. It shows the passion that I have for what I’m doing.”

Prashant Rao and Amie Tsang in London contributed reporting.

© New York Times 2018