* Compton to head truck-stop operator Pilot Flying J
* Guimaraes to take over PepsiCo Europe
By Martinne Geller
Sept 11 PepsiCo Inc President John
Compton is leaving the company to head truck-stop operator Pilot
Flying J Oil Corp, narrowing the pool of likely candidates to
become the soft drink and snack giant's next CEO.
Zein Abdalla, president of PepsiCo Europe, will succeed
Compton as president of PepsiCo, effective immediately. Enderson
Guimaraes will take over from Abdalla in Europe, the company
said late on Tuesday.
The news was a surprise, as Compton was just named president
in March. Some on Wall Street saw him as the most likely
successor to CEO Indra Nooyi, who has been at the helm for five
years and came under fire late last year for a stagnant stock
price and a North American drink business that lagged
Even though Compton cited personal reasons for his
departure, one could view it as a sign that he saw a rise to CEO
as unlikely, said Bernstein Research analyst Steve Powers.
The promotion of Abdalla, who has extensive international
experience, now "clearly positions" him as a leading CEO
candidate, said Wells Fargo analyst Bonnie Herzog.
"Furthermore, it seems to suggest a further shift away from
a U.S./beverage centric leadership," Herzog said.
Another, possibly less likely, successor is Brian Cornell,
head of the Americas Foods business, Powers said. He added that
any immediate departure by Nooyi seems less likely now, since
Abdalla and Cornell lack the experience of Compton.
"PepsiCo could have transitioned to John (Compton)
relatively seamlessly, whereas transitioning to Zein (Abdalla)
or Brian (Cornell) at this point would be a tougher sell,"
Compton joined PepsiCo as a 21-year-old at the Pulaski,
Tennessee, Frito-Lay facility. Taking the CEO job at privately
held Pilot Flying J gives him the chance to return to Tennessee.
"I have deep and personal ties to Tennessee, and my family's
plan all along has been to return to Tennessee at some point,"
Compton said in a statement. He had been based in Purchase, New
In running Pilot Flying J, the nation's largest truck stop
operator, Compton will succeed James Haslam, who last month
bought the Cleveland Browns American football team.
Despite what Edward Jones analyst Jack Russo called "a deep
bench," of capable managers, he said it was not good for PepsiCo
to see such an experienced and well-liked executive depart,
especially since the company is going through a transition.
CEO Nooyi is in the process of turning around the North
American soft drink business. Her plan includes ramping up
advertising, cutting thousands of jobs and warning Wall Street
to expect a bigger-than-expected decline in near-term earnings.
During Abdalla's tenure, the Europe division's revenue grew
to $14 billion from $7 billion. He joined the company in 1995.
Guimaraes joined PepsiCo in 2011 and had been president of
the global nutrition group. His successor in that role will be
named shortly, PepsiCo said.
Abdalla and Guimaraes will report to Nooyi.
PepsiCo shares were unchanged in after-hours trade from
their close on the New York Stock Exchange at $71.58.