No succession plan, poor outlook irks Pepsi investors

PepsiCo’s Indra Nooyi is laying in plans to cut costs for the long underperforming company — and avoiding the obvious. (Bloomberg news)

The 800-pound PepsiCo succession gorilla is still in the room.

While many on Wall Street were hoping CEO Indra Nooyi yesterday would promote execs or otherwise make clearer a succession plan, the 56-year-old executive did neither.

“Some people would like to have seen [a] management succession [plan],” said one PepsiCo analyst. “Some of what I’m hearing is they did not go far enough.”

After more than five years atop the beverage and snack food giant, Nooyi has produced underwhelming results. PepsiCo shares are flat over the last five years while shares of rival Coke have surged 42 percent over that same span.

Plus, Nooyi has overseen an operation that has ceded huge chunks of market share to its soft drink rival.

With that as background, many thought PepsiCo, as part of its strategic review released yesterday, would promote some high-ranking company brass.

The board of the Purchase, NY, company was said to favor John Compton, head of Americas foods, and Zein Abdalla, the boss of PepsiCo’s Europe operation.

In fact, sources very close to the company were all but certain in January the moves were going to be announced yesterday.

They were not.

In addition, Nooyi has been speaking to several outside executives to join PepsiCo’s senior ranks.

Some on Wall Street greeted the non-succession news and Nooyi’s decision to lay off 8,700 workers around the world — as well as the company’s forecast of lower profits in 2012 — with less than enthusiasm.

Investors bid down the stock by 3.7 percent, to $64.27 and Moody’s Investors Service cut the outlook on the company to “negative” from “stable.”

The PepsiCo board is still working on a succession plan, a source close to the situation said, noting, “The board considers succession a work in progress.”

James Schiro, PepsiCo’s presiding director, yesterday said, “The board of directors has been engaged throughout the [strategic] review process. We are fully aligned with and supportive of management with respect to both the strategic direction of the company and also the initiatives being announced today.”

No current top PepsiCo executives have experience running a public company.

Nooyi announced yesterday that the business was firing 8,700 workers, or 3 percent of its workforce, in part so it can pump up its marketing muscle to stop losing market share to Atlanta-based Coca-Cola.

The Post first reported that PepsiCo was planning major layoffs as part of the strategic review.

“She’s finally admitted that North American beverages are not going to be fixed in a year,” said the source, who advises the company, which also makes Frito-Lay snacks, Gatorade and Quaker Oats brands.

Nooyi told media that despite the layoffs the company this year planned to add about 15,000 net jobs.

A PepsiCo spokesman declined comment.