PepsiCo Said in Talks to Recruit Ex-Wal-Mart Executive Cornell
PepsiCo Inc. (PEP), set to announce a turnaround plan next week, is trying to recruit former Wal-Mart Stores Inc. executive Brian Cornell for a key job with the soda and snacks company, according to two people familiar with the discussions.
The position would report directly to Chief Executive Officer Indra Nooyi and would be equivalent in status to a division CEO, the people said.
The hiring might not happen, said the people, who asked not to be identified because the discussions are private. Other companies also are trying to recruit Cornell, one person said.
Peter Land, a PepsiCo spokesman, declined to comment yesterday. Cornell didn’t return a voicemail left at his home.
Cornell, 52, announced last month he would resign as chief executive officer of Wal-Mart’s (WMT) Sam’s Club membership warehouse unit. Cornell, who previously spent about 13 years at PepsiCo, told Wal-Mart he planned to move to the U.S. Northeast for family reasons. PepsiCo is based in Purchase, New York.
His experience at Wal-Mart, the world’s largest retailer and PepsiCo’s (PEP) biggest customer, could help PepsiCo maximize the power of its vast snacks and drinks portfolio with retailers. The company’s flagship soft drinks, including Pepsi-Cola and Diet Pepsi, have lost share to Coca-Cola Co. (KO), whose stock also outperformed PepsiCo (PEP) last year.
Sam’s Club was Wal-Mart’s slowest-growing unit when Cornell took over in 2009. He has been credited with turning the chain around. Sam’s Club’s same-store sales gained 5.7 percent in the quarter ended October, compared with a 1.3 percent increase for Wal-Mart locations.
Cornell previously was CEO of hobby retailer Michaels Stores Inc. from 2007 to 2009 and had an executive position at grocery retailer Safeway Inc. (SWY) At PepsiCo, from 1991 until 2004, he held positions at Tropicana and in the foodservice division before becoming a senior sales vice president for Pepsi-Cola North America.
PepsiCo, the world’s largest snack-food maker and second largest soft drink maker, is trying to dig itself out of an earnings slump.
Nooyi may boost the advertising and marketing budget for PepsiCo’s namesake cola and other drinks by as much as $600 million, or 50 percent, to $1.7 billion when it announces the results of a yearlong business review Feb. 9, according to analysts surveyed by Bloomberg.
Nooyi is seeking to take back market share from Coca-Cola and regain the confidence of investors who have questioned whether she has focused too much on healthier products. Some investors and analysts have also recommended splitting the company. PepsiCo’s shares have risen about 2 percent during her five-year tenure while Coke has gained more than 50 percent.
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