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PepsiCo Names Johnson To Board

By square1
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PepsiCo Names Johnson To Board

PepsiCo elected Bill Johnson, a longtime food company executive and advisor to Trian Fund Management, to its board following the threat of a proxy fight by Trian’s Nelson Peltz.

Johnson, formerly chairman and chief executive officer of H.J. Heinz, was recommended by Trian and will be an independent director, PepsiCo said in a statement. Separately, Trian named Johnson as a member of a three-man advisory partnership to assist in its investments.

PepsiCo CEO Indra Nooyi has fended off Peltz’s efforts to separate the company’s snack and beverage businesses since July 2013, saying that keeping the units together is more valuable to shareholders. Trian is the 11th-largest investor in Purchase, New York-based PepsiCo, with about 1.2 per cent of the shares. Today’s move signals that the two sides have settled their differences.

“Bill will bring deep expertise and insight to the PepsiCo Board,” Nooyi said. “We have had constructive discussions with Trian for nearly two years. They have provided valuable input to many aspects of our business."

Shares of Pepsi, the world’s second-largest beverage-maker and the biggest snackmaker, declined 1.1 per cent to $96.26 in late trading in New York. The shares rose 14 per cent last year.

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‘Action’ Pledge

Peltz said six months ago that he might embark on a proxy contest for control of the board.

‘‘There will be action,’’ the billionaire said on 16 July at the CNBC Institutional Investor Delivering Alpha Conference in New York, without specifying what form it would take. In response to a question, he said that a proxy fight was one possibility.

In March, Peltz blasted PepsiCo’s board for its ‘‘dismissive tone’’ after directors rejected Trian’s proposal to break up the company. Trian also demanded that the company consolidate four headquarter facilities into two and disclose returns from bottler acquisitions.

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Nooyi and director Ian M. Cook had told Trian that its proposal was ‘‘financial engineering’’ that would erode shareholder value.

Trian’s other advisors on its new advisory partnership include Dennis Kass, former CEO of Jennison Associates, and Dennis Reilley, former CEO of Praxair Inc.

Johnson will join PepsiCo’s board on 23 March.

Bloomberg News, edited by ESM

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