Paul Walsh to step down as Diageo chief Over the next year the 57-year-old will focus on handing over to Mr Menezes, who became COO last year after eight years as head of Diageo's North America division. Mr Walsh was appointed chief executive at the end of 2000 and has been responsible for focusing the company on its core premium drinks brands, such as Smirnoff vodka, Johnnie Walker whisky, and Guinness. Franz Humer, chairman of Diageo said: "Paul is an outstanding chief executive. The transition process which has been put in place enables Paul to contribute his knowledge and experience during Ivan's first year as chief executive. Diageo was formed in 1997 from the merger of Guinness and Grand Metropolitan. Mr Walsh became chief operating officer for Diageo from January to August 2000, before succeeding John McGrath as chief executive later that year. As part of his refocusing of the group on premium drinks, he sold off the groups food interests, including Pillsbury and a holding on Burger King. Investec said in a note: "We see this as a well-flagged transition, with Menezes appointed as COO a year ago ... a full in-tray for Menezes. We expect organic growth to be top of the agenda for now. Beyond that, the challenge for us is that of unlocking value strategically, using the still-unleveraged balance sheet. Exiting brewing and increasing focus on spirits continues to look compelling to us. Dirk Van Vlaanderen, an analyst at Jefferies, said Mr Menezes was a "known quantity and has done a good job managing Diageo's largest and most profitable business segment." Investec said £100 invested in Diageo at the time Mr Walsh was appointed in 2000 has grown to £538, relative to only £148 for the FTSE 100. Mr Walsh had not yet decided what his next move would be, a Diageo spokeswoman told Reuters. Diageo shares, which have nearly tripled during Mr Walsh's reign, were trading slightly higher on Tuesday morning. The shares have risen 28pc over the past year.