Form 4: PepsiCo Executive Steven C. Williams Reports Changes in Beneficial Ownership

Steven C. Williams, CEO of PepsiCo Foods North America (PFNA), reports acquisition and disposal of PepsiCo common stock, including performance-based restricted stock units (PSUs) and shares acquired through the PepsiCo Savings Plan.

Summary

• On March 1, 2024, Steven C. Williams, CEO of PepsiCo Foods North America, reported changes in his beneficial ownership of PepsiCo stock.
• He acquired 18,082 performance-based restricted stock units (PSUs) that will vest on March 1, 2027, contingent on performance targets and committee approval; the actual number of shares received could range from 0% to 200% of the PSUs granted.
• Williams also acquired 15,086 shares of PepsiCo common stock upon the vesting of PSUs granted in March 2021, due to exceeding pre-established performance targets.
• 12,049 shares were disposed of to satisfy tax withholding obligations upon the vesting of PSUs at a price of $164.125 per share.
• As of March 1, 2024, Williams directly owns 111,738 shares and indirectly owns 400.8424 shares through his 401(k) PepsiCo Savings Plan.
• Since the last report, he acquired an additional 11.3172 shares under the PepsiCo Savings Plan.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The acquisition of shares due to exceeding performance targets is a positive signal, while the granting of PSUs indicates continued confidence. The disposal of shares for tax obligations is a neutral event.

Positives

• Acquisition of 15,086 shares due to exceeding performance targets suggests strong performance by Williams and/or PFNA.
• Grant of 18,082 PSUs indicates continued confidence in Williams' leadership and future performance.

Negatives

• Disposal of 12,049 shares to cover tax obligations, although a normal part of PSU vesting, reduces Williams' direct holdings.

Risks

• The actual number of shares received from the PSUs is contingent on achieving pre-established performance targets, introducing uncertainty.

Future Outlook

The future number of shares received from the PSUs granted on March 1, 2024, depends on the achievement of pre-established performance targets over a three-year period ending March 1, 2027.

Industry Context

Form 4 filings are a routine part of executive compensation and provide transparency into the alignment of management's interests with those of shareholders. The acquisition of shares upon vesting of PSUs is a common occurrence in publicly traded companies.

Comparison to Industry Standards

• Executive compensation packages often include a mix of salary, bonus, stock options, and restricted stock units.
• The use of performance-based restricted stock units (PSUs) is a common practice to incentivize executives to achieve specific performance goals.
• Companies like Coca-Cola (KO) and Nestle (NSRGY) also utilize similar compensation structures for their executives.
• The vesting schedules and performance metrics associated with PSUs vary across companies and are tailored to their specific business objectives.

Stakeholder Impact

• The transactions signal to shareholders that management's interests are aligned with theirs, as Williams' compensation is tied to the company's performance.
• Employees may view the exceeding of performance targets positively, as it could lead to increased bonuses or other benefits.

Key Dates