It is not surprising that PepsiCo announced these three things on the same day:

  • It’s axing 8,700 jobs.
  • It’s increasing its marketing budget by $600 million.
  • And Massimo d’Amore, the former CEO of its Global Beverages Group, is retiring.

D’Amore, 56, until September 2011 was in charge of the flagship Pepsi soda brand as its sales collapsed. Most humiliatingly, Pepsi sank from the No. 2 brand in the U.S. to No. 3 — behind Diet Coke. The collapse came after d’Amore changed the brand’s look and advertising in an attempt to make it more trendy.

It is, however, surprising that PepsiCo is rewarding d’Amore for this colossal failure with $2 million-plus in “transition payments,” according to this SEC filing. His retirement agreement states:

“… you will receive from the Company twenty-six (26) bi-weekly payments equal to $79,400 each, less applicable withholdings and according to normal payroll procedures.”

That’s a gross of about $2 million. PepsiCo previously disclosed that d’Amore had accumulated $3.4 million in retirement benefits and stock, according to its most recent proxy form. The retirement agreement states that $33,100 of each transition payment is included as pension compensation.