Financial Performance of a Company

Requirement

Imagine that we have been consulted by the Board of Directors of xx company to consider the CEO's compensation. It is too high, too low, or about what it should be?
To answer the question, you will gather data, array it, analyse it, and consider it along with what you learn about the company and other companies you investigate. You should also consider the material you are reading in the courses, and apply that learning to your problem.
Likely sources you should consult: IBIS, Lexis-Nexis(Hoover Report), The Bureau of Labor Statistics, O*Net, Company web-pages, Yahoo Finance.
As you gather information about your company and its chief competitors, remember to cite the information sources.
You are to present your decision and agrument in a report.

Solution

Name of Company and CEO

Pepsi is considered as an American Carbonated soft drink producer who was established in 1893. The CEO of the Pepsi is Indra Krishnamurthy Nooyi. She became the CEO of PepsiCo in 2006 (Moss Kanter, 2012).

CEO Background Information

Indra Nooyi is considered as an Indian-born American business executive. She is recently serving as the Chief Executive Officer and Chairperson of PepsiCo, one of the largest food and beverage organization in the world. Nooyi is known as one of the top female executives in the United States and is continuously ranked among the top 100 powerful women of the world. She was born on 28 October 1955, in Madras. She was graduated in 1974. She participated most in social and other curricular activities. She was a brilliant student and got a seat in Indian institute of management. She completed MBA in 1976 from IIM. The first job of Indra Nooyi was with Total, and after that, she joined lots of organizations such as Johnson & Johnson, Boston Consulting Group, Motorola, and Asia Brown Boveri (Colvin, 2012). This will make her more experienced in developing various strategies. In 2006, Indra Nooyi became the chief executive officer of the PepsiCo and currently working with it. She gains a lot of popularity in her life. She was listed in Forbes and also received Padma Bhushan Award by the President of India in 2007.

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Competitors Background Information

 

  • Muhtar Kent (Coca-Cola): Muhtar Kent is known as the Turkish American business executive. He is the chief executive officer and chairman of the Coca-Cola Company. He was born in 1952 in New York City. He was completed his high school from Tarsus American College and MBA from Class Business School, London. He was found a job in the Coca-Cola through a newspaper ad in 1978, and today he is the CEO of the Coca-Cola. He became chairman of Coca-Cola in 2008 and became chairman of the board in 2009. In 2014, he was awarded the honorary degree by the Georgia Institute of Technology.

  • Donnie Smith (Tyson Foods): Donnie Smith is considered as a famous American businessman from Tennessee. He was done his graduate from the University of Tennessee. He was done Bachelor of Science in Animal Science. He is also a member of Alpha Gamma Rho. He became the member of Tyson foods in 1980 and had served as CEO since 2009. He is known for his passion toward the hallmark of the tenure, which began in 2009. He focused more to learn the every angle of Tyson Foods business. In 1980, he was working in poultry operations of the organization. After seven years he was transferred to the position of commodity buyer. This will provide a huge knowledge about the working of the organization.

  • Paul Bulcke (Nestle): Paul Bulcke is considered as a famous Belgian businessman. He graduated as a commercial engineer from the Katholieke Universiteit Leuven. In addition, he also attended the program for Executive development at the growing and popular school International Institute for Management Development in Lausanne. In 1979, when he was still 25, become the member of the Nestle group and worked in different countries such as Ecuador, Spain, Portugal, Germany, and Belgium. Before starting his job as the CEO of the company he was the Head of America. In 2007, he became the CEO of the Nestle and started his new life as CEO in 2008.

CEO Compensation

The compensation package of Indra Nooyi is $22,189,307. It is a combination of Total Cash Compensation and Total Equity. She is earning $ 15,567,308 as her total cash compensation and $6,251,479 as her total equity. Payscale of the organization depends on the skills of employees. But basically, it pays 3, 95,829 per year package to its customer executives, 19,71,567 per year package to its Territory Development Managers and 5k to 27k to its interns and lower staff.

Ratios and Comparisons for All companies

As per the matrix analysis, it can be said that there is a huge difference in performance of all companies. Pepsi is performing very best. Yes, the difference between among companies is favorable because it was only due to the efficiency of the management and their strategies (Purcell, 2014). If I am a CEO of the organization, I am asking about the net assets and earning capacity of the organization. This can provide me efficient direction about the profitability of the organization.

Qualitative Information and Forecasts 

 

  1. Food & Beverages Industry: The food industry is known as a complex global collective of different businesses that supply the most of the food items used by the overall world population. The food industry mainly contains agriculture, manufacturing, marketing, food processing, etc. (Karnani, 2013). On the other hand, beverage industry refers to the industry that produces drinks. Production of beverages depends on the beverage being made. Beverage can efficiently bottle or canned, cold-fill, and hot-fill.

  2. PepsiCo: PepsiCo is considered as a famous American Multinational food and beverage organization whose headquarter is situated in Purchase, New York. The interests of the PepsiCo has in the production, distribution, and marketing of beverages, grain-based snack foods, and other product. It was established in 1965 with the merger of Cola and Frito-Lay organization.

Competitors Information

 

  • Coca-Cola: It is considered as a popular American multinational beverage organization, and retailer, marketer or manufacturer of nonalcoholic beverages (Pendergrast, 2013). The organization becomes famous due to its well-known product Coca-Cola which is developed in 1886. Coca-Cola headquarters in Atlanta, Georgia.

  • Nestle: Nestle is known as a famous Swiss transnational drink and food company. Nestle headquarter situated in Vevey, Vaud, Switzerland. It is considered as the largest food organization in the world if evaluated by revenues. It deals with a various range of products such as Coffee and tea, food, Maggi, snacks, etc.

  • Tyson Foods: It is a famous American multinational organization which is based in Springdale, Arkansas. It operates in the food industry. The main feature of this organization is that it is the world's biggest marketer and processor of beef, chicken, and pork.

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Conclusion

After studying all this, we can conclude that all the organizations have positioned itself in the market significantly. Compensation structure of CEO of all the organizations is different. It is mainly based on earning structure and market position of the organization. Compensation structure of the employees is too low. It is because they bear the high pressure and responsibilities of the organization. So, their salary should be high. If an adequate amount of efforts will pay to them, they motivated highly and considered themselves as the part of the organization. It should be more than $30,000,000. With this, it can earn high success in the market. 

References

  • Moss Kanter, R., Khurana, R., Lal, R., & Baldwin, E. T. (2012). PepsiCo, Performance with Purpose, Achieving the Right Global Balance. Harvard Business School Organizational Behavior Unit Case, (412-079).

  • Pendergrast, M. (2013). For God, country, and Coca-Cola: The definitive history of the great American soft drink and the company that makes it. Basic Books.

  • Karnani, A. G. (2013). Corporate Social Responsibility Does Not Avert the Tragedy of the Commons--Case Study: Coca-Cola India. Ross School of Business Paper, (1210).

  • Colvin, G. (2012). Indra Nooyi’s Pepsi challenge. Fortune Magazine.

  • Purcell, S. D. (2014). Does CEO Pay Structure Matter? Research and Empirical Analysis on the Relationship CEO Compensation Structure Has on the Financial Performance of the Firm.

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