National Legal and Policy Center (NLPC) urges PepsiCo shareholders to vote FOR Proxy Item No. 4 — the independent board chair proposal — at PepsiCo’s Annual Meeting on May 6, 2026.¹
In support of this shareholder proposal, NLPC has published an exempt solicitation report to fully explain the necessity of this policy:
Download the Full ReportUnder Ramon Laguarta (pictured above), who has held the titles of Chairman and CEO simultaneously since February 2019, PepsiCo’s financial performance has deteriorated significantly — and the Board of Directors, structurally compromised by the combined Chair/CEO arrangement, has failed to demand accountability.
The Financial Record Is Damning
PepsiCo’s full-year 2025 results reveal a company in operational decline. GAAP earnings per share fell 14% year-over-year to $6.00. Full-year operating profit dropped from $12.9 billion to $11.5 billion — a decrease of more than 10%. Organic revenue grew just 1.7%.² Total shareholder return for 2025 was negative 1.9%, and the stock’s three-year annualized total return stands at a mere 1.6%.³
The flagship Pepsi cola brand, meanwhile, fell out of America’s top three sodas for the first time in Beverage Digest‘s tracking history — overtaken first by Dr Pepper in 2023 and then pushed to fourth place by Sprite in 2024, leaving Pepsi with a 7.97% share of the U.S. carbonated soft drink market.⁴ PepsiCo’s dividend payout ratio has reached approximately 95% of net income — a level that raises serious questions about the long-term sustainability of the Company’s capital return program.⁵
A $4 Billion Activist Campaign Was Required to Force Basic Accountability
In September 2025, activist investor Elliott Investment Management disclosed a roughly $4 billion stake in PepsiCo, criticizing the Company’s strategic direction, decelerating growth, and eroding profitability.⁶ The intervention forced management to commit to cutting its U.S. product lineup by nearly 20%, closing manufacturing plants, reducing its workforce, and targeting margin improvement over three years.⁷
PepsiCo’s new CFO acknowledged the severity of the situation, telling analysts the takeaway should be “it’s not business as usual here.”⁸ That a $4 billion activist campaign was necessary to catalyze changes that an engaged, independent board should have demanded years earlier is itself a governance indictment.⁹
The Board Has Not Provided Independent Oversight
The Board is chaired by the very executive whose decisions it is charged with evaluating. Ian Cook served as Presiding Director for thirteen years — through the entire period of the Company’s competitive deterioration — without generating the urgency shareholders deserved.¹⁰ His successor as Presiding Director takes office the same day as the annual meeting, but the structural problem — the combined Chair/CEO — remains entirely unchanged.
Meanwhile, Mr. Laguarta continues to expand his external institutional commitments. He currently serves simultaneously as PepsiCo’s Chairman, PepsiCo’s CEO, a director of Visa Inc., a newly elected director of IBM (effective March 1, 2026), and Co-Chair of the World Economic Forum’s Food Systems Initiative.¹¹ An independent Chair would be structurally empowered to ask whether this portfolio of external commitments is appropriate for the chief executive of a company in active restructuring. No such Chair currently exists at PepsiCo.
Mr. Laguarta received total compensation of $23,903,545 for fiscal year 2025¹² — after receiving $28,814,759 the year before¹³ — while shareholders absorbed negative returns. An independent Chair would be institutionally positioned to evaluate whether management’s pay reflects shareholder outcomes rather than management preferences. Under the current structure, the Chairman evaluates himself.
Please vote FOR Proxy Item No. 4 on May 6. An independent board chair is the structural reform PepsiCo’s shareholders need and deserve.
Download the Full ReportENDNOTES
¹ “Shareholder Proposal — Independent Board Chair (Proxy Item No. 4),” PepsiCo, Inc. 2026 Proxy Statement, p. 88, filed with the U.S. Securities and Exchange Commission March 27, 2026. See https://www.sec.gov/Archives/edgar/data/77476/000130817926000169/pep015012_def14a.htm
² “PepsiCo Reports Fourth Quarter and Full-Year 2025 Results” (Form 8-K Exhibit 99.1), PepsiCo, Inc., February 3, 2026. See https://www.sec.gov/Archives/edgar/data/0000077476/000007747626000009/q420258-kxexhibit991.htm
³ “PEP Stock Price History Charts,” FinanceCharts, accessed March 11, 2026. See https://www.financecharts.com/stocks/PEP/performance/total-return
⁴ Megan Ziegler. “Pepsi knocked out of America’s top selling soft drinks,” Live Now Fox, May 26, 2025. See https://www.livenowfox.com/news/coca-cola-pepsi-best-selling-soda-pop-soft-drink-beverage-digest
⁵ “PepsiCo Stock Price and Chart — NASDAQ:PEP,” TradingView, accessed March 9, 2026. See https://www.tradingview.com/symbols/NASDAQ-PEP/financials-overview/
⁶ Yun Li. “Pepsi shares jump as activist Elliott takes $4 billion stake, sees ‘historic’ value opportunity,” CNBC, September 2, 2025. See https://www.cnbc.com/2025/09/02/pepsi-shares-jump-4percent-after-wsj-reports-elliott-planning-major-activist-campaign.html
⁷ Dee-Ann Durbin & The Associated Press. “Pepsi to cut product offering nearly 20% in deal with $4 billion activist Elliott,” Fortune, December 8, 2025. See https://fortune.com/2025/12/08/pepsi-activist-elliott-4-billion-shareholder-cut-product-mix-20-percent/
⁸ Taylor Herzlich. “Pepsi axing snacks, sodas from its lineup — and slashing prices in cost-cutting marathon,” New York Post, December 9, 2025. See https://nypost.com/2025/12/09/business/pepsi-to-slash-20-of-products-lower-some-prices-and-fire-workers-in-deal-with-activist-investor-elliott/
⁹ Peter Katz. “PepsiCo reports $93.9B revenues for 2025, profit $11.5B,” Westfair Business Journal, February 5, 2026. See https://westfaironline.com/earnings/pepsico-reports-93-9b-revenues-for-2025-profit-11-5b/
¹⁰ Supra, Note 1.
¹¹ “IBM Elects Ramon L. Laguarta to its Board of Directors,” IBM (press release), January 30, 2026. See https://newsroom.ibm.com/2026-01-30-IBM-Elects-Ramon-L-Laguarta-to-its-Board-of-Directors
¹² “2025 Summary Compensation Table,” PepsiCo, Inc. 2026 Proxy Statement, p. 69, filed with the U.S. Securities and Exchange Commission March 27, 2026. See https://www.sec.gov/Archives/edgar/data/77476/000130817926000169/pep015012_def14a.htm
¹³ “2025 Summary Compensation Table,” PepsiCo, Inc. 2025 Proxy Statement, p. 69, filed with the U.S. Securities and Exchange Commission March 28, 2025. See https://www.sec.gov/Archives/edgar/data/0000077476/000130817925000289/pep4354281-def14a.htm
(Post references PX14A6G Notice of exempt solicitation)
