CalSTRS Backs Peltz For Pepsi Board

Jul 24 2014 | 10:01am ET

After going nowhere for the better part of a year, Trian Partners’ campaign against PepsiCo has won some much-needed new momentum.

The U.S.’s second-largest public pension fund has urged Pepsi to add Trian founder Nelson Peltz to its board. The move by the California State Teachers’ Retirement System comes a week after Peltz announced that, in spite of Pepsi’s resistance to his proposals, “we definitely haven’t disappeared from the scene.”

Trian owns a 0.8% stake in Pepsi and has pushed the company to split its snacks and beverage businesses. Pepsi rejected that proposal earlier this year.

Last week, Peltz promised “there will be action” and said that a proxy contest was a possibility. He added that he has met with about 100 of the company’s largest shareholders.

The alliance between Peltz and CalSTRS is not the first time the two have worked together. The pension is a Trian investor and has repeatedly backed its activist campaigns.

“While we agree that the short-term performance of the company is good, in looking at the three- and five-year performance of the company we notice that it lags behind the peer groups the company has selected,” CalSTRS spokesman Ricardo Duran said.

CalSTRS owns a 0.2% stake in Pepsi.

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