Aramark Corp., a leading food service company, said Tuesday it has hired former top PepsiCo Inc. manager Eric Foss to be its new chief executive.
Foss, 53, succeeds Joseph Neubauer, who had been Aramark's CEO since 1983. Neubauer, 70, will remain chairman of the privately held company, which is based in Philadelphia and booked $13 billion in revenue in the fiscal year ended Sept. 30, 2011. The changes are effective immediately.
Speculation about Foss's landing place has swirled since last September, when the high-profile executive announced he would leave PepsiCo in December as part of a broader management shake-up at the snack and beverage giant. Foss said at the time he wanted to pursue CEO opportunities outside the company.
Foss served as a key deputy to PepsiCo chief executive and chairman Indra Nooyi, overseeing the integration of the company's bottling operations after PepsiCo acquired its two largest U.S. bottlers in early 2010. He had been CEO of Pepsi Bottling Group, one of the bottlers, before it was acquired.
Aramark sells food and drinks at public venues such as schools, hospitals and sporting events, including the concession for the athletes' village at this summer's Olympic Games in London. It employs about 250,000 workers in 22 countries, and both PepsiCo and Coca-Cola Co. are major suppliers.
Foss will have an opportunity to purchase an equity stake in Aramark as part of his compensation package. Aramark stopped trading on the New York Stock Exchange in 2007 after being acquired by an investor group led by Neubauer and investment funds including GS Capital Partners, CCMP Capital Advisors, Thomas H. Lee Partners and J.P. Morgan Partners.
In a telephone interview Tuesday, Neubauer said Aramark had been speaking with Foss for roughly six months as part of its CEO search. There is no timetable for Neubauer to step down as chairman, he said. Neubauer has a roughly 10% stake in the company.
Neubauer said Aramark was "very fortunate" to be able to hire Mr. Foss, praising his global business experience.
Foss said he looked at several CEO opportunities, including at publicly traded companies, in recent months. He was eager to head a company with $10 billion or more in annual sales and a global footprint, with a preference for the food and beverage industry, he added in the same telephone interview.
Foss, who worked parts of three decades at PepsiCo, had been viewed by some as a potential CEO successor to Nooyi. But many had expected him to leave the company by early 2012, when his two-year contract was set to expire, after agreeing to oversee the initial bottling integration.
"My work was done," Foss said Tuesday of his decision to leave PepsiCo.
One big task remaining for PepsiCo: selling more beverages again, particularly its flagship cola, which has been fallen farther behind Coke. PepsiCo slashed its earnings estimate earlier this year and said it will ramp up its marketing budget to try and stem market-share losses.
Foss had the second-highest-listed pay package for top executives at PepsiCo in 2011, with total compensation of $15.6 million, including a $6.5 million severance payment.
He said he will go on "a listening tour" in his first 100 days as Aramark's CEO, but that he's not planning any major strategic changes at the company.
"I think the strategy in place is sound one. I think this is much more a stay the course," he added.
Neubauer said there are no plans at this time to take Aramark public again.
Foss and Neubauer said they want to continue expanding the company's overseas business. About 70% of Aramark's sales are currently generated in North America.
Aramark competes against several companies in North America, including Centerplate Inc., Compass Group PLC, Delaware North Companies Inc. and Sodexo Alliance SA. International rivals include Elior SA and International Service System A/S, in addition to Compass and Sodexo.
This story first appeared on WSJ.com
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