PepsiCo Confidential

Talent Sustainability and Manager Quality in PepsiCo

October 1st 2010

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PepsiCo Worldwide

• World second largest food and beverage producer • Main business directions: soft drinks, juices, snacks, cereals • The most popular brands: Pepsi-Cola, Diet Pepsi, Mountain Dew, Gatorade, Lay’s, Tropicana, Doritos, Lipton Ice Tea*, Quaker, Cheetos, 7Up, Ruffles, Aquafina**, Mirinda, Tostitos, Sierra Mist, Walkers, Fritos• Company works in 200 countries• Employees 285 000 associates• Turnover around $60 billion

* Unilever brand**Aqua Minerale in Russia

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Brands-millionaires

Pepsi-cola

Mountain Dew

Lay’s Potato Chips

Gatorade (Thirst Quencher, G2, Propel)

Diet Pepsi

Tropicana Beverages

7UP (outside U.S.)

Doritos Tortilla Chips

Lipton Teas (PepsiCo/Unilever Partnership)

Quaker Foods and Snacks

Cheetos Cheese Flavored Snacks

Walkers Potato Crisps

Mirinda

Ruffles Potato Chips

Aquafina Bottled Water

Tostitos Tortilla Chips

Sierra Mist

Fritos Corn Chips

Pepsi Max

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PepsiCo in Russia and the CIS

• # 1 among juice & snacks manufacturers in the CIS, # 2 among soft drinks manufacturers• PepsiCo production facilities: 9 plants in Russia + 2 in Ukraine, incl. Lebedyansky (№ 1 on Russian juice market) and «Sandora» (№ 1 on Ukrainian juice market)

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Global and Local Brands portfolio

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We are focused on three key areas: our products, the environment and people.

Products: We are committed to building a fully balanced portfolio, making our treats more healthy and providing our customers with a full rangeof nutritious products, through the acquisition of brands like Tropicana,Gatorade, Quaker Oats, the reformulation of existing products and the introduction of new products and through joint venture alliances

Environment: We are committed to respecting and preserving the natural environment and its relationship with our business. We’re focusing ourenvironmental sustainability efforts on water, energy and packaging – the areas in which we can make the biggest impact

People: We must inspire, challenge and cherish our employees by attracting, developing, rewarding and retaining the best people. We fully supportdiversity and inclusion and are equally committed to a diverse range of suppliers, in particular women and minority-owned suppliers

Performance with Purpose

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PepsiCo Talent sustainability strategy

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Manager Quality is the single most important element of a compelling EVP offer

4,58

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3,29 3,23

3,62 3,543,41

3,17 3,16

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East; Manager Quality; 5,02

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Compensation & Benefits Work Environment Work-Life BalanceOrganizational Environment

3.82 AverageCategory Importance

3.40 AverageCategory Importance

3.06 AverageCategory Importance

3.03 AverageCategory Importance

Compensation, as a category, is most highly valued Manager quality is the single most

highly valued attribute; employeesare least willing to trade it off 3.33

Average Importancefor all Attributes

ImportanceRating(Mean)

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Manager Quality Touchpoints

Your contribution to our employees and candidates

experiencing PepsiCo as an employer of choice

How you create an inspiring and

effective onboarding

experience from day 1 through to

the first 12 months

How you enable

employees to get the best out of their individual

performance

The difference you make to motivating employees through R&R

How you engage with our current and future

employees through effective communication

How you can ensure an optimal development at every stage of an employees’ career development journey

How we measure how

you’re doing in delivering our

promise to employees

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Driving Manager Quality – explaining managers their role via set of seminars incl. First Time Manager

Understand the huge impact you have on

employee engagement every day in every

interaction

Role model those behaviours that are

consistent with Manager Quality

Use the resources available on

PepsiCo University and the Manager

Quality microsite

Embrace the MQPI process and share your development plans

with your teams

Utilise our new Recruiting and

On-boarding systems to secure the best talent & set them up to succeed

Communicate the importance of Manager Quality to your teams and link it to business

success

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Driving Manager Quality – support via Manager Quality Microsite

“One stop shop” of all Manager Quality tips, tools and processes for each of the Manager Quality touch points

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Driving Manager Quality – via selected focused initiatives

2009-10 Focus

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Key features: external selection

Attraction Selection

RE-launch Global careers website

Correctly briefed recruitment agencies/

search firms & recruitment

advertising reflective of Employer Brand

Robust job analysis and clear job description

Robust selection methodology and tools

/upskilled line managers

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A Multi-Faceted Approach to On-boarding in PepsiCo Europe

A Multi-Faceted Approach to On-boarding in PepsiCo Europe

ON-BOARDINGPLAN

Guiding new starters on what they need to

know and when

ON-BOARDINGPROGRAMME

A face-to-face meetingIntroducing key businessmessages and processes

DRIVING ACCOUNTABILITY

Measuring the effectiveness of the on-boarding process

ON-BOARDING COACH

Trained on-boarding coaches for new starters

LINE MANAGER OWNERSHIP

Manages and takes full responsibility for the process from day 1

Our New On-Boarding Approach

WELCOME PACKUSB tool

History of our BrandsOn-boarding Coach

On-boarding PlanOur Products

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MQPI overview

This process provides employees with the opportunity to rate their manager on his/her people management behaviors.

The following 12 behaviors are used to assess manager quality:

Opportunity to provide open ended comments to your manager.

1. Keeps people focused on the right priorities2. Sets challenging but attainable performance goals3. Constructively addresses performance issues4. Balances a concern for results with a concern for the needs of individuals in his/her group5. Effectively manages and works with people who are different from him/herself6. Provides timely and direct feedback to others regarding performance or workplace issues7. Engages in candid discussions with others regarding their career opportunities8. Provides others with challenging assignments and training experiences to promote their

development9. Recognizes and celebrates the significant achievement of others10. Effectively uses different rewards and incentives to drive performance11. Gives others full credit for their ideas and contributions12. Treats others’ concerns and issues fairly and with sensitivity and confidentiality

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D&I Annual Operating Plan

Recruitment:

Establish/implement 50/50 gender candidate slates to ensure diversity of choice Establish Regional Monitoring mechanism of hires/Promos to instill female

Representation Mindset

Culture/Environment:

Establish D&I Council scope/deliverables/roles Build D&I Awareness to the Senior Leaders

Talent Development

Execute Internal and external Focus Group to understand Mfg/Sales poor female representation

Execute Plan for Finance Female bench building and Senior Leadership female developmental experiences

Female representation target for 2010: 30%

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Driving Talent Sustainability agenda via Annual People objective (50% of Overall Performance Rating)

Creating an Inclusive and

Engaging Environment

For all employees, these objectives reflect a commitment to creating and reinforcing a culture where employees feel valued, included, and respected for their skills and contributions and for the unique differences they bring to the workplace. These objectives should also reflect collaborating and working constructively with others to achieve organizational goals.

For people managers and leaders, these objectives should also relate to creating an environment where employees can achieve their career and personal goals and where work is effectively structured and managed.

Talent Development

For all employees, these objectives reflect a commitment to building talent and sharing knowledge within PepsiCo, including among peers and colleagues. For individual contributors in particular, this could include formal or informal mentoring of other employees, partnering with others to help them develop specific skill sets, or developing systems or programs that build the capability of others.

For people managers and leaders, these objectives also emphasize ensuring that we build broad capability and bench strength for the sustainability of the organization by making people decisions that are consistent and reliable, seeking to balance both individual and organizational needs, and ensuring high-quality developmental feedback is provided for all.

Manager Quality

For all people managers, these objectives reflect an emphasis on providing your direct reports with clear direction, performance feedback, coaching, and developmental opportunities; motivating and rewarding contributions and achievements; and treating others respectfully, fairly, and with sensitivity.

Employee Learning and Development

For all employees, these objectives should focus on improving your personal and professional effectiveness and skills. For people managers and leaders, these also should emphasize building/reinforcing a learning and development culture by providing employees with access to learning activities and opportunities, supporting people through their career transitions, and helping people make the right decisions in support of their career goals and aspirations.

Electronic system already has People Objective categories included for employees

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2010 People agenda EER

Key 2010 Regional initiatives Key questions to help define individual contribution

KPI’s

Manager Quality

MQPI Analyze Manager Quality Performance index 2009 and come up with concrete action steps to improve results in 2010 (All B1+)

How will you personally engage and secure the development of your Manager Quality?

How will you ensure robust MQPI development plans for your teams?

(all B1+ to include MQPI objective in their PDRs)

MQPI score improved by X%

Concrete item in MQPI improved by X%

On BoardingNew concept will be introduced in EER in 2010.

All hiring managers will have their role enhanced in on boarding their new subordinates.

Ensure that every new comer has structured on boarding plan

Meet on the first day and ensure objectives are discussed within first month

Measured by On boarding surveys and input used during PDR evaluation (people rating)