Executive Compensation Change Overview Guide For Executives in Bands 1-5Confidential

October 2016

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What’s InsideIntroduction 2

Leadership Groups 3

Executive Summary 5

What’s Changing 6

Moving From Bands to Leadership Groups 9

About the Role Evaluation Process 10

Career Progression Through Leadership Groups 11

What’s Next 12

Legal Notices 12

IntroductionAs PepsiCo continues to transform its operating model, our executives

must be prepared for increasingly complex and diverse leadership roles and

be capable of driving growth, innovation and productivity in a constantly

changing world.

Developing leaders who can operate successfully in our globally connected

and integrated organization is essential for our sustained growth. Our

new Leadership Excellence Framework is designed to enable associates

to develop the leadership competencies and behaviors that will drive our

long-term success.

The changes to our Executive Compensation Program, which are summarized

here, are designed to support leadership development and ensure alignment

with the new ways of working.

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! The information contained in this brochure summarizes changes to the Executive

Compensation Program that will take effect for executives hired or promoted on or

after January 1, 2017, unless otherwise communicated in an offer of employment

or promotion with an effective date in 2016.

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Leadership Groups At the center of the new Executive Compensation Program is a move away from our current

broad band structure to “Leadership Groups.” The new Leadership Groups are designed to:

• Incent and motivate the development of skills and behaviors necessary to lead

and succeed in the new operating model. These include building breadth and depth,

and collaborating across boundaries to drive growth, innovation and productivity.

• Better align executive compensation with the external market and the scope and

accountability of each executive role. Today, within Bands 2 through 4, all roles are

compensated in the same way, even though some roles are larger and more complex.

The new Leadership Groups recognize these role differences and enable us to differentiate

compensation accordingly.

As you learn about the changes, we want to emphasize one thing that remains constant: our

commitment to providing a world-class Executive Compensation Program. Our philosophy

continues to focus on driving company and individual results through market-leading,

performance-based compensation that allows us to attract, retain and motivate dedicated

leaders like you around the globe.

Is PepsiCo making these changes to reduce costs?

No, these changes are not about reducing the Company’s costs. In fact, there will be no

immediate cost savings for PepsiCo, because the target compensation for executives in

Bands 1 through 5 as of December 31, 2016 won’t change. However, savings will be

realized over time as new executives join the organization and existing executives are

promoted into new roles.

! If you are in Bands 1 through 5 as of December 31, 2016, your current target compensation

will not change.

Our Executive Compensation Philosophy

Our Board-approved compensation philosophy is to maintain a strong competitive position

by targeting total compensation at the 75th percentile. This means that PepsiCo’s target

compensation is higher than target compensation at three out of four peer companies. This

provides significant differentiation for PepsiCo, because many of our peer companies target

compensation at the median.

For equivalent executive roles and responsibilities, our philosophy results in market-leading

compensation when we deliver market-leading results. We review the program annually to

ensure we remain competitive and aligned with prevailing market practices.

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PepsiCo’s desired target pay position is above the target pay position of most of our peer companies.

PepsiCo’s Desired Target Pay Position

TARGET PAY POSITION OF MOST

PEER COMPANIES

MEDIAN

PEPSICO’S DESIRED TARGET

PAY POSITION

0 100

PepsiCo’s Desired Target Pay Position

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Executive Summary Here is a summary of what is changing and what is not changing effective January 1, 2017.

What’s Changing What’s Not Changing

• Executive Bands 1 through 5 will be replaced by eight Leadership Groups (LG1 through LG8)

• Annual Bonus and LTI Award targets for executives hired or promoted into certain Leadership Groups on or after January 1, 2017

• PepsiCo’s 75th percentile pay for performance compensation philosophy

• Components of executive compensation

• Process for determining salary increases, bonus payouts and LTI Awards

• Benefits, perquisites and allowances, as applicable

• Executive titles

What’s Changing Bands 1 through 5 will be replaced by eight Leadership Groups:

• Band 1 will become Leadership Group 1, or LG1. This is simply a change in name only.

Band 1 target compensation aligns with market practice and PepsiCo’s 75th percentile

pay philosophy. Therefore, all components of the Band 1 compensation program will be

maintained in their current state.

• Bands 2, 3 and 4 will be split into two Leadership Groups, each with its own target

compensation. These splits, and the accompanying compensation, reflect the scope and

accountability of each role within PepsiCo and better align the target compensation with

market norms and PepsiCo’s compensation philosophy. The new target compensation

amounts will apply only for new hires and promotions into a new Leadership Group with

effective dates of January 1, 2017 or after.

• Band 5 will be replaced by LG8. Compensation for Band 5 executives is already differentiated

based on scope and accountability since these roles are individually market-priced. All

components of the Band 5 compensation structure will be maintained in their current state.

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Band Leadership Group

B1 LG1

B2LG2

LG3

B3LG4

LG5

B4LG6

LG7

B5 LG8

New PepsiCo Executive Compensation Program

Here is a summary of the new program effective January 1, 2017. Changes are highlighted in blue.

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Current Executive

Salary Band

Leadership Group

Job Title

Salary Range

Target Annual Bonus

Target Premium

Bonus

Target Strategic Growth

Incentive (SGI)

Target Long-Term Incentive (LTI) Award

Country Group A

Country Group B

Country Group C*

B1 LG1 DirectorCountry- Specific

25% 10% — $0-$40,000

B2LG2

Sr. DirectorCountry- Specific

30% 15% — $60,000 $50,000 $40,000

LG3 35% 15% — $75,000 $60,000 $50,000

B3LG4

Vice President

Country- Specific

40% — 20% $150,000 $120,000 $100,000

LG5 45% — 20% $200,000 $160,000 $130,000

B4LG6

Sr. Vice President

Country- Specific

50% — 25% $300,000 $240,000

LG7 55% — 25% $400,000 $320,000

B5 LG8

Sr. Vice President

or President

Country- Specific

60%, 65% — 25%, 30%$500,000, $600,000,

$700,000 or $800,000 based on size and scope of position

* Effective with the March 1, 2017 annual LTI Award, the target LTI Award for LG3 (formerly Band 2) executives in Country Group C will be increased from $48,750 to $50,000.

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Important Information About the New Program

Grandfathering

If you are in Bands 1 through 5 as of December 31, 2016, your current target compensation

will not change. For any promotion to new Leadership Groups, with effective dates on or after

January 1, 2017, the new target compensation amounts shown on page 7 will apply.

Target compensation

New target Annual Bonus and LTI Award amounts will be introduced for LG2, LG4 and LG6

as shown on page 7.

Components of executive compensation

The elements that make up target compensation will continue to include Base Salary, Annual

Bonus, Premium Bonus (Leadership Groups 1-3), Strategic Growth Incentive (Leadership

Groups 4-8) and LTI Award. Also, executive benefits, perquisites and allowances will continue,

as applicable.

Job titles

Titles are not changing and will be mapped into the new program as shown on page 7.

Salary ranges

Salary ranges will continue to be evaluated annually and set by country. Similar to today, an

executive’s position within the salary range will be based on several criteria, including the

role scope, historical performance and time spent in a Leadership Group. Salary ranges will be

mapped into the new program as shown on page 7. By maintaining a combined broad salary

range for LG2-3, LG4-5 and LG6-7, an executive’s pay can continue to grow through performance

and market-based increases even as he or she remains in the same Leadership Group.

!Grandfathered

executives in

LG2, LG4 and

LG6 roles will be

compensated

at the “higher”

Leadership Group

Moving From Bands to Leadership Groups

All roles for executives in Bands 2 through 5 have been evaluated and will be mapped to the

appropriate Leadership Group, based on their current scope and accountability.

Current executives in roles evaluated at the “lower” Leadership Group will be “grandfathered”

and compensated according to the “higher” Leadership Group, as shown below. This ensures

there is no decrease in their current target compensation.

For example, a Band 2 executive as of December 31, 2016 whose role is evaluated as LG2

will receive LG3 target compensation for as long as the executive is in a role evaluated as

LG2 or LG3.

Please note

Because all Band 1 executives will be mapped into Leadership Group 1 and maintain the

same target compensation, additional role evaluations were not necessary.

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BandEvaluated Leadership

Group

Compensated Leadership Group for Grandfathered

Executives

B1 LG1 LG1

B2LG2

LG3LG3

B3LG4

LG5LG5

B4LG6

LG7LG7

B5 LG8 LG8

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About the Role Evaluation Process

In introducing the changes to our Executive Compensation Program, we enhanced our role

evaluation process to ensure the full scope, accountability and complexity of roles were

considered. This robust process allowed us to accurately position roles into the new Leadership

Groups. Here are the steps in that process:

Roles evaluated using robust, globally consistent methodology that considers

multiple dimensions of a role, including both QUANTITATIVE and QUALITATIVE factors

Collect Role Documentation

First, in partnership with HR and business leaders, we collected updated documentation for all Band 2 through 5 roles. This included:

• Detailed role descriptions summarizing primary accountabilities, skills and experience required, and organizational influence

• Organizational charts

• Financial measures and other key performance indicators

Review Documentation

The Total Rewards team carefully reviewed the documentation to ensure we had a full understanding of the role. Additional discussions with business leaders and HR Business Partners took place as needed, and the updated documentation was then finalized to enable the evaluation.

Evaluate Role

Consistent with our established processes for reviewing all roles across PepsiCo, we considered both qualitative and quantitative factors for each role. Qualitative factors include items such as accountabilities, influencing skills, market and role complexity, as well as technical and leadership requirements. Quantitative factors reflect the business size and financial impact of the role.

QUANTITATIVE Factors May Include:

QUALITATIVE Factors May Include:

• Revenue

• Volume

• Power of One/No Power of One

• Countries supported

• Functional budgets

• Team size

• Complexity

• Strategic planning

• Technical knowledge

• Level of influence

• Organizational impact

Finalize Evaluation

Roles were compared to similar roles, both within the Sector and globally. The outcomes were validated with internal and external experts, as needed, as well as with senior HR and functional leaders, centrally and across all Sectors to ensure consistency across the organization.

Career Progression Through Leadership Groups

While you remain in the same Leadership Group, you will continue to have the opportunity

to grow your pay through performance or market-driven increases. Here are two examples to

help you understand how moving to a new role on or after January 1, 2017 may—or may not—

affect target compensation. Note that promotions across one or more Leadership Groups are

possible, as shown below (e.g., a current Band 2 executive in an LG2 role could be promoted

to an LG4 or LG5 role).

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Example: Executive in Band 2 (evaluated as LG2 or LG3) as of December 31, 2016 moves to new role on or after January 1, 2017

If Executive… The Target Compensation Will…

Takes an LG2 role Reflect LG3

Takes an LG3 role Reflect LG3

Takes an LG4 role Increase to LG4

Takes an LG5 role Increase to LG5

Example: Executive in Band 1 as of December 31, 2016 moves to new role on or after January 1, 2017

If Executive… The Target Compensation Will…

Takes another LG1 role Reflect LG1

Takes an LG2 role Increase to LG2

Takes an LG3 role Increase to LG3

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• Information Sessions. Attend an information session on the changes. Details on dates,

times and locations are available from your local sector HR.

• Manager Discussions. You and your manager will meet to discuss your role and the

Leadership Group to which it corresponds, based on the evaluation process. Your manager

will be in touch with you to arrange a convenient time.

Legal NoticesExecutive Compensation Programs Are Subject to Change

This communication is intended to provide a brief summary of the PepsiCo Executive

Compensation Program. If there is ever a conflict among this brochure, any statements

made to you, and the plan documents and prospectuses, the plan documents and

prospectuses will always govern. The changes described in this brochure do not apply to

employees in sector-specific compensation programs, including the eCommerce program.

All Restricted Stock Unit, Performance-Based Stock Unit and Stock Option awards are subject

to their terms and conditions as set out in the relevant award agreements. PepsiCo reserves

the right to amend, suspend or terminate these plans or programs at any time. PepsiCo has

the full power and authority to administer and interpret these plans and programs, and

all interpretations, actions and determinations made by PepsiCo under these plans and

programs shall be conclusive and binding for all purposes on all parties. Nothing herein

shall be construed as a guarantee of future benefits, awards or employment, and nothing

in this brochure makes you eligible for any plan or eligible for a specific level or amount of

compensation unless the official plan documents and approval by the Compensation

Committee of the PepsiCo Board of Directors or its delegate provide for such eligibility or

compensation. This brochure does not constitute an offer to sell any securities. Any such

offer is made only by the applicable prospectuses.