Proxy Blog

Pepsico, Inc. 

April 6, 2020

The annual proxy for this snack and beverage company had the following proposals: 

  1. Proforma votes on directors, the appointment of auditors, and executive compensation 
  2. Shareholder proposal on lowering threshold for special meetings and report regarding sugar and public health 

Magni voted as follows: 

  1. For proforma proposals.
    -Directors – The board has a majority of independent directors and some have CEO/CFO experience with other companies. The compensation of directors is disclosed with a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation. 
    -Auditors – There appear to be no controversies with the financial statements of the company.
    -“Say-on-pay” advisory vote – The disclosure related to the shareholder engagement program included activity level and breadth of topics. The peer group was listed, and the company was benchmarked against the peer group. The criteria for the peer group was adequate, though it could be more precise. 
  2. For and against shareholder proposals
    -For lowering the threshold for special meetings – Per the Magni position paper, Magni routinely votes in favor of these proposals.
    -Against report regarding sugar and public health – The topic of sugar is significant as in the US, and increasingly around the globe, there is a rapid increase in obesity and diabetes. Sugar-based drinks are part of the problem. That said, Magni voted against the proposal for two reasons: (1) the proposal is rambling and appears to try to tarnish the company with a broad range of allegations, often unrelated to the proposal; and (2) the proposal covers the same ground that a group called ATNF produces. ATNF is funded by independent entities, such as the Bill & Melinda Gates Foundation, the Dutch Ministry of Foreign Affairs, and the Robert Wood Johnson Foundation.