Kraft Foods (KFT.N) boss Irene Rosenfeld is the most powerful woman in U.S. business, Fortune magazine said on Thursday, bumping PepsiCo Inc (PEP.N) chief Indra Nooyi into second spot after five years on top.

The 14th annual ranking was determined by the size and importance of the woman's business in the global economy, the health and direction of the business, the arc of the woman's career and her social and cultural relevance.

Rosenfeld made a big show of power this year with her decision to split Kraft into two companies, a reversal of her previous strategy of expanding through acquisitions, Fortune magazine said of the Kraft chief executive, who led a hostile $18 billion takeover of Britain's Cadbury last year.

On Nooyi's watch, PepsiCo has forged further into nutrition-focused products, Fortune said. But Nooyi has been criticized for taking her eye off the core North American soda business, which has lost share to Coke.

Nooyi was the only woman in the top 10 most powerful to be among the top 10 highest paid, coming in at No. 9 after earning $14 million last year. The highest paid woman was Oracle (ORCL.O) President Safra Catz with $42 million.

Just a week after being appointed chief executive of Hewlett-Packard Co (HPQ.N), Meg Whitman -- who was chief executive of eBay Inc (EBAY.O) until 2008 and last year ran a failed bid to become governor of California -- returned to the ranking of the top 50 most powerful business women at No. 9.

While her ascent to the role is a sure sign of her power, it remains to be seen if she can fix the computer maker and bring order to its dysfunctional board, Fortune said.

Whitman filled a top 10 vacancy left by the firing over the phone last month of Yahoo Inc (YHOO.O) Chief Executive Carol Bartz, who has now dropped off the Fortune list.

PUSH FOR WOMEN IN BOARDROOMS

Media mogul Oprah Winfrey fell 10 spots to No. 16 with Fortune saying her influence had waned after hosting the final season of The Oprah Winfrey Show in May. Johnson & Johnson (JNJ.N) Vice Chairman, Executive Committee, Sherilyn McCoy, filled that top 10 opening, coming in at the 10th spot.

Otherwise the top of the list was largely unchanged from 2010.

Archer Daniels Midland (ADM.N) Chief Executive Patricia Woertz came in at No. 3, followed by DuPont (DD.N) Chief Executive Ellen Kullman, Wellpoint (WLP.N) Chief Executive Angela Braly and Avon Products (AVP.N) Chief Executive Andrea Jung.

Rounding out the top 10 was IBM (IBM.N) Senior Vice President Ginni Rometty at No. 7, followed by Xerox (XRX.N) Chief Executive Ursula Burns.

While women represent about half of the United States' white-collar workers, they are a rarity in the upper echelons of business, with female chief executives running just 3 percent of companies in the Standard & Poor's 500 index .SPX. [ID:nN1E7860DC] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a graphic on the growth in women as S&P 500 CEOs:

r.reuters.com/caj63s

For a graphic on women who now head S&P 500 companies:

r.reuters.com/zyh63s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

More companies have been focusing recently on increasing their female board representation as more and more research has shown that companies with women directors or even just more diverse boards tend to do better than those with executive teams made up entirely of men. [ID:nL6E7J325O]

Some countries such as Norway and Spain have introduced quotas requiring a minimum level of female board representation.

A former British trade minister wants FTSE 100 companies to have 25 percent women on boards by 2015 and EU internal market commissioner Michel Barnier has put gender diversity for bank boards on his radar in the wake of the financial crisis.[ID:nL6E7IK1K6]

The full Fortune list of the most powerful women in U.S. business can be seen at: cnnmon.ie/oSllDy and the list of the highest paid can be seen at: cnnmon.ie/pO26Ho

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