PepsiCo Settles with Trian Fund; Appoints New Director

PepsiCo settled its disagreement with Trian Fund Management by appointing William R. Johnson to its board of directors effective March 23, 2015.

Mr. Johnson was a retired chairman, president and CEO of H.J. Heinz Company, and an advisory partner of Trian Fund. He will be included in PepsiCo’s slate of nominees for election to the board of the company during the 2015 annual meeting of shareholders.

Early last year, Trian Fund entered into discussion with PepsiCo, Inc. (NYSE:PEP) regarding his recommendation to spinoff the snack and beverage business of the company.  At the time, accused Peltz of financial engineering and rejected his proposal.

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Trian Fund’s comment

Commenting on the appointment, Trian Fund CEO and founding partner Nelson Peltz said his firm is confident that “Bill will be a strong and complementary addition” to the board of directors of PepsiCo.

According to Peltz, Trian Fund has “always believed that PepsiCo is a world-class company with a portfolio of iconic brands and enormous potential.”  He added that his firm supports CEO Indra Nooyi’s commitment to operational excellence, which resulted in the improved performance of the company.

PepsiCo is one of the largest stockholdings of Trian Fund. The hedge fund owns more than 17.8 million shares worth around $1.68 billion based on its 13F filing last December.

PepsiCo says Trian Fund provided “invaluable input”

According to Nooyi, PepsiCo engaged in constructive discussions with Trian Fund for almost two years. She added that the hedge fund provided invaluable input to many aspects of the company’s business.

Trian Fund recommended Johnson to serve as independent director to the board of PepsiCo. The management believes that Johnson will contribute his deep expertise and insight to the company as the board continues to innovate and drive profitable long-term growth.

“We respect Bill’s strong track record of shareholder value creation at Heinz. Bill’s extensive consumer packaged goods experience will be an important addition to our boatrd,” said Nooyi.


On the other hand, PepsiCo’s presiding director, Ian Cook said, “We’re pleased to welcome Bill. PepsiCo’s board follows corporate governance best practices and, in accordance with recommendations of the National Association of Corporate Directors, will continue to engage actively with management on PepsiCo’s strategy and the creation of long-term shareholder value.”