Update 3-24-12:

Meanwhile, CEO Indra Nooyi’s compensation increased about six percent in 2011 over 2010, according to the Wall Street Journal today.

PepsiCo Inc. PEP -0.14% Chairman and Chief Executive Indra Nooyi received 2011 compensation valued at $17.1 million, according to a Securities and Exchange Commission filing released Friday, a 5.8% increase from the prior year driven primarily by an increase in the value of pension benefits.

Nooyi’s 2011 compensation included $1.6 million in base salary, up from $1.3 million, her first increase in base pay since becoming CEO in 2006. Stock and option awards totaled $9.5 million, roughly equal to year-ago levels, while her incentive plan compensation fell to $2.5 million from $3 million last year.

Nooyi’s pension value and non-qualified deferred compensation earnings was about $3 million, up from $2.1 million in 2010.

PepsiCo is undertaking a turnaround this year that will try to boost the company’s performance, especially in its Americas beverage division where sales have been lackluster. PepsiCo is slashing 8,700 jobs and boosting its marketing budget this year by up to $600 million that it will invest mostly behind a dozen global brands.

Update 2-9-12:

PepsiCo Inc. plans to spend up to $600 million more on marketing this year to try improve sales in North America and will lay off about 3% of its global work force to pay for it as part of a much-anticipated strategic overhaul to try to catch up to global rivalCoca-Cola Co.

PepsiCo’s job cuts will affect some 8,700 employees in 30 countries, and are part of a broader productivity program to slice $1.5 billion in annual costs from the global drinks-and-snacks giant by 2014.

Update:  1/13/12

Despite Pepsi’s move to cut costs and resurrect the Pepsi Cola brand, the board says it will stand by it’s CEO, Indra Nooyi.  It sounds as if everyone agrees that Pepsi needs to be more aggressive in advertising its flagship brand, to compete with Coke.  Once again, I don’t see a reason to layoff people to achieve that goal.  Why not enlist those employees in helping transform the company, to once again improve the profitability and market share of the Pepsi brand?


Due to a stagnant stock price over the past three years, Pepsi feels it needs to do something to demonstrate its commitment to earnings growth and to move in a positive direction by laying of 1% of its workforce, or 4,000 people.

Why are layoffs always the first response to distress?  Pepsi has an abundance of products; maybe they have just spread themselves out to thin with their acquisitions and focus on the Frito-Lay snack division.  Plus, this focus on “better-for-you” products at the expense of good ole’ Pepsi advertising and head-to-head competition with Coke will not keep Pepsi in the top of mind with consumers.

Consumers don’t eat soda and snack food because they are good for them–they eat them because they taste good and want a snack (and not always a healthy one!).  In addition, consumers like the head-to-head competition between Coke and Pepsi; it forces them each to bring their best advertising, packaging, and new products to the table for consumers; it brings out the best in both of them.

Because of our research on downsizing, which you can download for free here, and my former work as Account Executive for the Pepsi Cola account, I don’t think downsizing is the answer.  I think that getting back to basics and remembering what makes Pepsi exciting for its consumers is what will bring that stock price back up.  When I would call on Coke, they would never utter the “P” word.  Maybe it was arrogance, or maybe it was a total devotion to dominating the market.  Maybe Pepsi needs to take on that same mind-set.

Just my two cents.


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  • By Dis-heartened Pepsi employee, January 17th, 2012 at 11:05 am

    Layoffs and an end to 401k contributions are a drop in the bucket when compared to the annual compensation packages of Pepsi’s top 50 wage earners. Indra alone pulls in an estimated 16 millon dollars annually. Rather than sending home 4000 hard working people with familes, why don’t Indra insist on cutting her salary? If she took a 50% pay reduction, she would still make an estimated 8 million annually. The top wage earners can take one for the team and still make their millions, rather than sending hard working people like me and my co-workers home. Why do the people that have the least have to sacrifice the most and bear the burden for Indra’s inability to show a sustained growth for one of the largest companies in the world?

  • By Susan Baker, January 20th, 2012 at 9:04 am

    Looking at this from an operational position, it would be wise for PepsiCo to not only “get back to basics” but learn something from other CEO’s that profited from having “focused sales directors” that means control the total market by controlling and grown local markets. Example, PepsiCo delegated a Harvard Grad to increasing sales in Las Vegas. Not knowing the industry she thought her degree would open doors in a good ol boy town. Now every savvy business consultant such as myself knows in war you have to know the terrain. Divide your forces, build alliances in the local market, and become the peoples beverage”

    • By Susan Baker, January 20th, 2012 at 10:06 am

      PepsiCo has legions of grassroot customers. However, maneuvering an army is totally different than building longterm business relationships. Momentum to firm up the bottom line will come through the “one-on-one sales model”. The beverage of choice comes from customers drinking what they love and keeping them happy.

      I am walking to the gate at LAX and saw the pilot drinking a Coke.

  • By totaltrust, January 20th, 2012 at 10:14 am

    Full disclosure: I once participated in a cola test in a mall, about two decades ago. I chose Pepsi even though I was a loyal Coke drinker, and am a loyal Diet Coke drinker to this day.


  • By Anonymous, February 10th, 2012 at 1:03 pm

    My Spouse works for Pepsi. And has told me most reasons for Coke being on top is that they’ll sell their Grand mother to get in the door. AND in most cases give it away to stomp on the competition. Their CEO has no idea of what she is doing. The company has let go so many of the people that made Pepsi the company it is. The new managment has shuffled around and reorged so many times, they don’t have an idea of what’s to be done. Bring back the old horses and stop giving golden parachutes to people who have screwed it up.

  • By totaltrust, February 10th, 2012 at 1:20 pm

    I appreciate all of your comments. I think there needs to be more conversation about what Pepsi needs to do to improve, and not just improve by laying off people. All that does is cut out the creative folks who can help Pepsi gain back the market share and profits they need.

    One analyst suggested splitting up the snack and soda business, somewhat casually, but I agree. If the focus is on healthy snacks, then make the split. Focus on soda in competition with Coke and leave the healthy snacks to someone else. While it is a lofty goal to help us all eat healthy, the reality is that when we want a Dorito, we don’t want a healthy one. We want the tasty one. I’m counting my points on Weight Watchers right now, and know that if I want Doritos, I can have 11 pieces of Nacho cheese Doritos for 4 points. If I really want them, I will eat them and count them! I have worked in the soda business and know that Coke is not going to give up market share without being innovative and finding new ways to grab share away from Pepsi. Why isn’t Pepsi doing the same thing?!

  • By Amy, February 13th, 2012 at 11:13 am

    I think that there is one reason for Indra’s kneejerk reaction that has been overlooked. I worked at Pepsi for 8 years, and back in 2001 there were plans for full scale outsourcing to InfoSys and layoff’s for all IT. Since InfoSys is owned by a relative of Indra, the government started looking into this as a conflict of interest (duh). Also, since it was just after 9/11 with patriotism being high, it wasn’t a popular idea. Given those two factors, Indra changed her timeframe, but not her overall strategy. Slowly, she has almost completely outsourced the IT department and replaced the employee’s with InfoSys workers from India. I trained about 5 of them myself, one was to stay here in Plano, TX and the others would go back to India and work from there. Any chance that Indra gets to get rid of employees she will take it, because it fits into her plan to keep the incestious business relationship under the radar. Her plan has been to get rid of the employees the whole time, but under the guise of cutting costs versus outsourcing. People get more upset when the know the job isn’t going away completely, but it is going to someone else in another country.

    • By Anonymous, February 23rd, 2012 at 9:29 am

      Indra was not the ceo in 2001. Also that was EDS they were looking into at that time. One of many factors that led to the decision to not outsource at that time is out data would be sitting right next to P&G.

      • By Laura Sanders Holcomb, March 21st, 2012 at 3:24 pm

        From her bio:
        “Prior to becoming CEO, Mrs. Nooyi served as President and Chief Financial Officer beginning in 2001, when she was also named to PepsiCo’s Board of Directors. In this position, she was responsible for PepsiCo’s corporate functions, including finance, strategy, business process optimization, corporate platforms and innovation, procurement, investor relations and information technology. Between February 2000 and April 2001, Mrs. Nooyi was Senior Vice President and Chief Financial Officer of PepsiCo. Between 1996 and 1999, Mrs. Nooyi was Senior Vice President of Corporate Strategy and Development.”

        So, she may not have been the CEO at the time but she was certainly in a position to make executive decisions. It sounds to me like she has made several poor choices. Maybe she should take a cue from Alan Mulally, CEO of Ford Motor Co., who took a 30% pay cut in order to help keep Ford from being part of the bailout the other American car manufacturers were involved in. Another move Mulally made was to establish a team of veteran Ford employees to help run the show. People who know the company and have a sense of pride in their product. It’s hard to find that these days. So many people are just chasing the all mighty dollar and are only concerned with “what can you do for me” rather than what can WE do to make this work?

  • By Dis-heartened Frito employee, February 16th, 2012 at 10:56 am

    I’ve worked for Frito Lay for almost 26 years. I’ve never done anything but praise my company and how good they have been to me and my family. I always thought we were better than some of the things I have read over the last couple of days. Sadly, I have to realize that we (Pepsico) are just another huge company with top level management that will do anything to protect themselves. I don’t claim to be a financial wizard and understand how all this high finance works, but I’m not devoid of common sense and compassion either. Apparently some in the company can’t say the same about the latter. As someone said above…why are layoffs the first response. I’ll tell you why. It’s because it’s an easy fix for upper level management to save face and buy themselves a little time. The big shots go home (one of their many, I’m sure) and sleep like a baby telling themselves I can feel good because I did my job. No, what you did is cause good, decent people to lose their jobs, thereby there homes, cars, college funds, savings, etc. for your own benefit.

    I still don’t understand why Frito Lay isn’t separated from the rest in Pepsico. We are the profit makers as a company. I guess I answered my own question…Frito pays the bills for Pepsico. Sad time for this country, my company and me personally.

    • By Anonymous, February 21st, 2012 at 10:11 pm

      Sad day for all frito lay employees.

  • By Anonymous, March 24th, 2012 at 9:27 am

    I understand that when employees were fired, they were given the option to train their InfoSys replacement so as to receive their severance package, or if they refused to train their replacement, they would not get a severance. I think the US government, especially NY State and Westchester County that gave Pepsi tax benefits to keep jobs in Westchester County should be made aware of this nasty company.

  • By MJ Trapen, December 15th, 2012 at 6:10 pm

    I worked for PepsiAmericas 10yrs,without 1write up,or without calling in 1time, I averaged 25hrs overtime a week in my tenure @ a lousey $4.50 an hr overtime, because I truly loved my company,but to my horror after reporting that my manager had deliberately not turned in my application for a salesman job that had been promised to me for 6yrs he falsely acussed me of not going to one of my acc which I had paper work from Pepsi proving that this account was not mine on that date, I was stil fired,& they even tried denying my unemployment benefits,which I contested & according to the La.Dept.of Labor I was fired for no reason of my own,& rewarded my unemployment benefits.
    We were not Union but a few co-workers,& I were in the process of becoming unionized when I was fired.i requested an arbitrary hearing@ Pepsi expense like my employee hand book instructed me to only to be told I only had 5days to do so.

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