8-KShareholder MattersCorporate ChangesOther Events+1

PEPSICO INC 8-K Report, Bylaw Amendment (May 9, 2011)

Filed May 9, 2011For Securities:PEP

Summary

PepsiCo, Inc. (PEP) filed an 8-K on May 9, 2011, detailing significant corporate governance changes and shareholder voting outcomes from its Annual Meeting held on May 4, 2011. The most impactful for investors is the amendment to its Restated Articles of Incorporation to adopt a majority vote standard for uncontested director elections, effective upon filing. This change means directors must now receive more 'for' votes than 'against' votes to be elected, enhancing accountability to shareholders. Furthermore, the company announced a 7% increase in its annual dividend, raising it from $1.92 to $2.06 per share, with the next quarterly dividend of $0.515 payable on June 30, 2011. The annual meeting also saw shareholders ratify KPMG as the independent auditor and approve the company's executive compensation plan through an advisory vote. However, shareholder proposals for the right to call special meetings and a political contributions report were voted down.

Key Highlights

  • 1PepsiCo adopted a majority vote standard for uncontested director elections, effective May 9, 2011, requiring directors to receive more 'for' votes than 'against' votes.
  • 2The annual dividend per share was increased by 7%, from $1.92 to $2.06, demonstrating a commitment to returning capital to shareholders.
  • 3Shareholders overwhelmingly ratified KPMG as PepsiCo's independent registered public accounting firm.
  • 4An advisory vote on executive compensation was approved by shareholders.
  • 5The board decided to hold an annual advisory vote on executive compensation, aligning with the majority shareholder preference expressed at the meeting.
  • 6Shareholder proposals seeking the right to call special meetings and a political contributions report were defeated.
  • 7All 12 incumbent directors were re-elected with substantial support, demonstrating continued confidence from shareholders.

Frequently Asked Questions

The amendment requires each director to be elected by a majority of the votes cast 'for' the director over votes cast 'against' the director in uncontested elections. This gives shareholders more direct power to hold directors accountable, as a simple plurality is no longer sufficient for election if there are opposing votes.

The increased annual dividend rate is $2.06 per share. The quarterly dividend of $0.515 per share is payable on June 30, 2011, to shareholders of record on June 3, 2011.

Shareholders voted in favor of holding an advisory vote on executive compensation annually (700,381,746 votes for 1 year). Consequently, PepsiCo's Board of Directors has decided to hold these advisory votes on executive compensation every year.

No, both shareholder proposals, one requesting the right to call special shareholder meetings and another requesting a political contributions report, were defeated. The proposal for the right to call special meetings received 486,988,403 'for' votes, while the proposal for a political contributions report received only 103,809,689 'for' votes.