Important Notice Regarding the Availability of

Proxy Materials for the Annual Meeting of Shareholders

To Be Held on May 1, 2013

The Notice of Annual Meeting, Proxy Statement and the Annual Report for

the fiscal year ended December 29, 2012 are available at www.pepsico.com/proxy13.

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

PROXY STATEMENT SUMMARY (CONTINUED)

INFORMATION ABOUT OUR ANNUAL MEETING

GENERAL INFORMATION ABOUT THE PROXY MATERIALS

If you received printed versions of these materials by mail, these materials also include the proxy card or vote instruction form for the Annual Meeting.

Copies of the proxy materials are available for viewing at www.pepsico.com/proxy13.

You may have received proxy materials by email. Even if you received a printed copy of our proxy materials, you may choose to receive future proxy materials by email. If you do so, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it or for so long as the email address provided by you is valid.

VOTING PROCEDURES AND ANNUAL MEETING ATTENDANCE

As the beneficial owner of shares held in street name, you have the right to direct your bank or broker how to vote your shares, and it is required to vote your shares in accordance with your instructions. If you do not give instructions to your bank or brokerage firm, it will nevertheless be entitled to vote your shares with respect to “routine” items, but it will not be permitted to vote your shares with respect to “non-routine” items. In the case of a non-routine item, your shares will be considered “broker non-votes” on that proposal.

VOTING PROCEDURES AND ANNUAL MEETING ATTENDANCE (CONTINUED)

Proposal No. 1 (election of directors) and Proposal No. 3 (advisory approval of our executive compensation) are matters the Company believes will be considered “non-routine.”

We have also implemented a Director Resignation Policy under our Corporate Governance Guidelines. Under this policy, if a director nominee in an uncontested election receives a greater number of votes “against” his or her election than votes “for” his or her election, the director nominee is required to offer his or her irrevocable resignation to the Board of Directors following certification of the shareholder vote. The Nominating and Corporate Governance Committee will consider the resignation offer and make a recommendation to the Board of Directors. Within 90 days following certification of the

VOTING PROCEDURES AND ANNUAL MEETING ATTENDANCE (CONTINUED)

shareholder vote, the independent members of the Board will make a final determination as to whether to accept the director’s resignation, and will promptly publicly disclose the determination. A director who tenders his or her resignation under this provision shall not be present during the deliberations or voting by the Committee or the Board regarding whether to accept the resignation offer.

Note on Abstentions and Broker Non-Votes.    Abstentions and broker non-votes are not treated as cast either for or against a matter, and therefore will not affect the outcome of the vote.

Note on “Broker Non-Votes.”    Under New York Stock Exchange rules, a broker may cast a vote on behalf of a beneficial owner on routine matters, such as Proposal No. 2, when the broker does not receive specific voting instructions from that beneficial owner. On non-routine Proposals No. 1 and 3, a broker may not cast a vote absent specific voting instructions from the beneficial owners. If you are a beneficial owner holding shares through a broker, bank or other holder of record and you do not vote on certain matters, your broker may cast a vote on your behalf for Proposal No. 2 but not Proposals No. 1 or 3.

In addition to the solicitation of proxies by mail and electronically, PepsiCo intends to ask brokers and bank nominees to solicit proxies from their principals and will pay the brokers and bank nominees their expenses for the solicitation. Our directors, officers and employees also may solicit proxies by mail, telephone, electronic or facsimile transmission or in person. They will not receive any additional compensation for these activities.

VOTING PROCEDURES AND ANNUAL MEETING ATTENDANCE (CONTINUED)

If you are a beneficial owner of shares held in street name and received your proxy materials by mail, your admission ticket will be your Notice or vote instruction form you received from your bank, brokerage firm or other nominee. If you received your proxy materials by email, you will be given an opportunity to print an admission ticket through the email you received.

Shareholders who do not obtain on admission ticket in advance may obtain one upon

verification of their ownership, as of the record date, at the registration desk on the day of the Annual Meeting. If you are a beneficial owner of shares, you must show proof of ownership, such as a bank or brokerage account statement. Registration will begin at 8:30 a.m. Eastern Daylight Time.

ELECTION OF DIRECTORS (PROXY ITEM NO. 1)

Directors’ Skills and Qualifications

Our Board of Directors recommends that shareholders vote “FOR” the election of the following directors.

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

		IAN M. COOK Director Since: 2008 Age: 60   Independent

IAN M. COOK, 60, was elected to our Board of Directors in 2008. He became Chief Executive Officer and was elected to the Board of Directors of Colgate-Palmolive Company in 2007 and became Chairman of its Board in January 2009. He was named President of Colgate-Palmolive Company, a position he still holds, in 2005. Mr. Cook joined Colgate in the United Kingdom in 1976 and progressed through a series of senior management roles around the world. In 2002, he became Executive Vice President, North America and Europe. In 2004, he became Chief Operating Officer, with responsibility for operations in North America, Europe, Central Europe, Asia and Africa and in 2005 became responsible for all Colgate operations worldwide.

Skills and Qualifications

The selection of Ian M. Cook as a director was grounded in Mr. Cook’s strengths in business operations gained from his many years working in global leadership roles, including Chief Executive Officer, and a director at Colgate-Palmolive, a publicly-traded, multi-national consumer products company. In addition, his extensive experience with talent development and succession planning is of great value to PepsiCo and the Board.

		DINA DUBLON Director Since: 2005 Age: 59   Independent

DINA DUBLON, 59, was elected to our Board of Directors in 2005. Ms. Dublon retired from JPMorgan Chase & Co. in 2004, where she had served as Executive Vice President and Chief Financial Officer since 1998. She is a director of Microsoft Corp. and Accenture plc. She is also a director of the Global Fund for Women and on the board of overseers of the International Rescue Committee and a trustee of Carnegie Mellon University. She was on the faculty of Harvard Business School during the 2011 to 2012 academic year.

Skills and Qualifications

Dina Dublon’s qualifications include her deep expertise in financial, strategic and banking activities that were gained while serving as a senior executive at JPMorgan Chase & Co., a leading global financial services company, and as a faculty member at Harvard Business School; her corporate governance experience obtained as a member of the board of directors at several other public companies; and her unique perspectives on emerging markets gained while working with global not-for-profit organizations focusing on women’s issues and initiatives. These experiences provide valuable insight to PepsiCo’s Board of Directors.

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

		VICTOR J. DZAU, MD Director Since: 2005 Age: 67   Independent

VICTOR J. DZAU, MD, 67, was elected to our Board of Directors in 2005. Dr. Dzau has been Chancellor for Health Affairs at Duke University and President and Chief Executive Officer of the Duke University Health System since 2004. Prior to that he served as Hersey Professor of Medicine at Harvard Medical School and Chairman of the Department of Medicine at Brigham and Women’s Hospital in Boston, Massachusetts from 1996 to 2004. He is a member of the Institute of Medicine of the National Academy of Sciences and the European Academy of Sciences and Arts. He was previously Chairman of the National Institutes of Health (NIH) Cardiovascular Disease Advisory Committee and he served on the Advisory Committee to the Director of NIH. Dr. Dzau has been named 2004 Distinguished Scientist of the American Heart Association and was the recipient of the 2004 Max Delbruck Medal, Berlin, Germany, and the 2005 Ellis Island Medal of Honor. Dr. Dzau is also a director of Alnylam Pharmaceuticals, Inc. and Medtronic, Inc. and served as a director of Genzyme Corporation from 2000 until 2011.

Skills and Qualifications

As a medical doctor and physician/scientist, Victor J. Dzau offers PepsiCo significant expertise in the areas of health, wellness and nutrition, an important part of PepsiCo’s growth strategy. His expertise and oversight are especially valuable to PepsiCo’s research and development teams as well as its Global Nutrition Group and related initiatives. In addition, his experience as a director of several public companies provides him with enhanced perspectives on governance and other issues applicable to public companies, and his membership with international health organizations provides him with critical insights on emerging markets.

		RAY L. HUNT Director Since: 1996 Age: 69   Independent

RAY L. HUNT, 69, was elected to our Board of Directors in 1996. Mr. Hunt is Chairman of the Board, President and Chief Executive Officer of Hunt Consolidated, Inc., a holding company for oil production and exploration and real estate investment management businesses. He began his association with Hunt Oil Company in 1958 and has held his current position since 1976. He is also a director of numerous corporate organizations, including Bessemer Securities Corporation, Bessemer Securities LLC and King Ranch Inc., and a trustee of numerous charitable organizations, including The Cooper Institute and Southern Methodist University. Mr. Hunt formerly served as Chair of the Federal Reserve Bank of Dallas and as a member of the President’s Intelligence Advisory Board in Washington, D.C.

Skills and Qualifications

Ray L. Hunt brings to PepsiCo a keen understanding and knowledge regarding strategy and leadership of a global organization operating in a key industry from his long-time position as Chairman and Chief Executive Officer of Hunt Oil Company and his current role with Hunt Consolidated, Inc. Mr. Hunt’s extensive experience in government and finance is also of great value to the Board. In addition, his activities in a large number of privately-held and not-for-profit organizations across a range of industries contribute to Mr. Hunt’s operational business expertise, significant experience in governance matters and strong management skills.

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

		ALBERTO IBARGÜEN Director Since: 2005 Age: 69   Independent

ALBERTO IBARGÜEN, 69, was elected to our Board of Directors in 2005. Mr. Ibargüen has been President and Chief Executive Officer of the John S. and James L. Knight Foundation, a private, independent foundation that promotes quality journalism, media innovation and the arts, since 2005. Mr. Ibargüen previously served as Chairman of Miami Herald Publishing Co., a Knight Ridder subsidiary, and as publisher of The Miami Herald and El Nuevo Herald. He is a member of the boards of AMR Corporation, American Airlines, Inc., AOL, Inc. and the Council on Foreign Relations.

Skills and Qualifications

PepsiCo and its Board of Directors benefit from the business experiences that Alberto Ibargüen acquired over 25 years of managing major metropolitan newspapers, including the country’s largest Spanish-language daily. Mr. Ibargüen brings to the Board market, community and new media insights that have been developed over time and through his role as Chief Executive Officer of one of the country’s largest private foundations, as well as extensive experience with crisis management and regulatory matters. His skill set also includes legal and financial experience that has been enhanced through his publishing, business and public company board roles.

		INDRA K. NOOYI Director Since: 2001 Age: 57

INDRA K. NOOYI, 57, has been PepsiCo’s Chief Executive Officer (“CEO”) since 2006 and assumed the role of Chairman of our Board of Directors in 2007. She was elected to our Board and became President and Chief Financial Officer in 2001, after serving as Senior Vice President and Chief Financial Officer since 2000. Ms. Nooyi also served as PepsiCo’s Senior Vice President, Corporate Strategy and Development from 1996 until 2000, and as PepsiCo’s Senior Vice President, Strategic Planning from 1994 until 1996. Prior to joining PepsiCo, Ms. Nooyi spent four years as Senior Vice President of Strategy, Planning and Strategic Marketing for Asea Brown Boveri, Inc. She was also Vice President and Director of Corporate Strategy and Planning at Motorola, Inc.

Skills and Qualifications

Indra K. Nooyi brings to the Board of Directors strong leadership, extensive strategic planning, business and operating experience and tremendous knowledge of our Company. Her 19 years with PepsiCo have provided her with extensive knowledge of the global food and beverage industry. In addition, Ms. Nooyi brings her broad strategic vision for PepsiCo to the Board of Directors. Ms. Nooyi’s service as the Chairman and CEO of PepsiCo creates a critical link between management and the Board of Directors, enabling the Board to perform its oversight function with the benefits of management’s perspectives on the business.

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

		SHARON PERCY ROCKEFELLER Director Since: 1986 Age: 68   Independent

SHARON PERCY ROCKEFELLER, 68, was elected to our Board of Directors in 1986. She is President and Chief Executive Officer of WETA public radio and television stations in Washington, D.C., a position she has held since 1989, and was a member of the Board of Directors of WETA from 1985 to 1989. She was a member of the Board of Directors of the Corporation for Public Broadcasting until 1992 and is currently a director of the Public Broadcasting Service (PBS) in Washington, D.C. Ms. Rockefeller currently serves as Trustee and President of the International Council of The Museum of Modern Art and as a Trustee on the following not-for-profit boards: National Gallery of Art, Johns Hopkins Medicine, Colonial Williamsburg Foundation and Rockefeller Philanthropy Advisors.

Skills and Qualifications

As a member of our Board of Directors, Sharon Percy Rockefeller brings to PepsiCo her diverse perspective, international and media experience gained through over 23 years as the leader of public radio and television stations, and keen knowledge of government and public policy matters. Ms. Rockefeller’s activities in the United States and internationally with not-for-profit organizations focused on art, medicine and public broadcasting have provided her with invaluable management and leadership experiences.

		JAMES J. SCHIRO Director Since: 2003 Age: 67   Independent

JAMES J. SCHIRO, 67, was elected to our Board of Directors in 2003. Mr. Schiro was Chief Executive Officer of Zurich Financial Services from May 2002 to December 2009, after serving as Chief Operating Officer—Group Finance since March 2002. He joined Price Waterhouse in 1967, where he held various management positions. In 1994 he was elected Chairman and senior partner of Price Waterhouse, and in 1998 became Chief Executive Officer of PricewaterhouseCoopers, after the merger of Price Waterhouse and Coopers & Lybrand. Mr. Schiro is also a director of Koninklijke Philips Electronics N.V., Goldman Sachs Group, Inc. and REVA Medical, Inc. and is a senior advisor at CVC Capital Partners, a private equity and investment advisory firm.

Skills and Qualifications

James J. Schiro’s credentials include his extensive risk management experience gained while he was Chief Executive Officer of Zurich Financial Services, as well as his knowledge of global capital markets. He also brings significant financial expertise and banking acumen gained from his role at PricewaterhouseCoopers, a large, public accounting firm. In addition, Mr. Schiro’s experiences with consumer products, technology and financial services as a director on several public company boards benefit PepsiCo and the Board.

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

		LLOYD G. TROTTER Director Since: 2008 Age: 67   Independent

LLOYD G. TROTTER, 67, was elected to our Board of Directors in 2008. Mr. Trotter is a managing partner at GenNx360 Capital Partners, a private equity firm, a position he has held since February 2008. He served as Vice Chairman, General Electric, a diversified technology and financial services corporation, and as President and Chief Executive Officer of GE Industrial, from 2006 through February 2008. Between 1989 and 2006, he held various positions at GE, including Executive Vice President, Operations, from 2005 to 2006, President and Chief Executive Officer of GE Consumer and Industrial Systems from 1998 to 2005 and President and Chief Executive Officer, Electrical Distribution and Control from 1992 to 1998. Mr. Trotter was a director of Genpact Limited from 2007 to 2008. Mr. Trotter is also a director of Textron, Inc. and Daimler AG.

Skills and Qualifications

Lloyd G. Trotter’s qualifications include his extensive experience in business operations, consumer goods and information technology gained from his many years working in global leadership roles at General Electric. Mr. Trotter also has significant multi-industry and corporate governance experience as a result of serving on the boards of directors at several public companies.

		DANIEL VASELLA, MD Director Since: 2002 Age: 59   Independent

DANIEL VASELLA, MD, 59, was elected to our Board of Directors in 2002. Dr. Vasella served as Chairman of the Board of Novartis AG from 1999 until February 2013. Dr. Vasella served as Chief Executive Officer of Novartis from 1999 to January 2010, after serving as President since 1996. From 1992 to 1996, Dr. Vasella held the positions of Chief Executive Officer, Chief Operating Officer, Senior Vice President and Head of Worldwide Development and Head of Corporate Marketing at Sandoz Pharma Ltd. He also served at Sandoz Pharmaceuticals Corporation from 1988 to 1992. Dr. Vasella is also a director of American Express Company.

Skills and Qualifications

As a member of our Board of Directors, Daniel Vasella offers PepsiCo his experience as the former Chairman and Chief Executive Officer of the global healthcare company, Novartis AG. His expertise in the important areas of health and wellness and nutrition, his extensive experience with regulatory matters, and his global perspective in leading and serving on the boards of directors at international organizations, provides a great benefit to PepsiCo and its Board.

ITEM 1—ELECTION OF DIRECTORS (CONTINUED)

		ALBERTO WEISSER Director Since: 2011 Age: 57   Independent

ALBERTO WEISSER, 57, was elected to our Board of Directors in 2011. Mr. Weisser is Chairman and Chief Executive Officer of Bunge Limited, a global food, commodity and agribusiness company, a position he has held since 1999. He will retire as Chairman of Bunge in June 2013 and will serve as its Executive Chairman until the end of 2013. Mr. Weisser previously served as Bunge’s Chief Financial Officer from 1993 to 1999. Mr. Weisser is a member of the North American Agribusiness

Advisory Board sponsored by Rabobank Nederland and served as a director of International Paper Company from 2006 until 2012.

Skills and Qualifications

Alberto Weisser is an experienced business leader, having served as Chairman and Chief Executive Officer of Bunge since 1999. Mr. Weisser has a deep understanding of the strategic, financial, risk and compliance issues facing a large, diversified, publicly traded company. Mr. Weisser’s significant global experience, particularly with respect to emerging markets, and his keen understanding of commodities, are of great value to PepsiCo. Mr. Weisser also brings strong financial acumen to our Board resulting from his previous six years of experience serving as Bunge’s Chief Financial Officer.

OWNERSHIP OF PEPSICO COMMON STOCK

OWNERSHIP OF PEPSICO COMMON STOCK (CONTINUED)

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and executive officers to file reports of ownership and changes in ownership of our Common Stock and Convertible Preferred Stock. We received written representations from each such person who did not file an annual statement with the SEC on Form 5 that no Form 5 was due.

To the best of our knowledge, based on a review of those forms and written representations, in 2012 all required forms were filed on time with the SEC. However, one transaction involving under-reporting of 3,853 shares in a Form 3 filed on behalf of Saad Abdul-Latif due to an administrative error was corrected on a Form 3/A.

CORPORATE GOVERNANCE AT PEPSICO

BOARD OF DIRECTORS

Our business and affairs are overseen by our Board of Directors pursuant to the North Carolina Business Corporation Act and our By-Laws. Members of the Board of Directors are kept informed of the Company’s business through discussions with the Chairman and CEO and with key members of management, by reviewing materials provided to them and by participating in Board and Committee meetings. All members of the Board of Directors are elected annually by the shareholders.

Regular attendance at Board meetings and the Annual Meeting is required of each director. Our Board of Directors held seven meetings during 2012. Average director attendance at Board and applicable standing Committee meetings (held during the period that such director served) in 2012 was 95%. No director attended fewer than 75% of the total number of Board and applicable Committee meetings (held during the period that such director served) in 2012. The independent directors met in executive session at six Board meetings in 2012. All current directors (excluding Dr. Buckley, who joined the Board in September 2012) attended the 2012 Annual Meeting of Shareholders.

Strong corporate governance is and has been a long-standing priority at PepsiCo. In 2002, the Board of Directors adopted Corporate Governance Guidelines for the Company, which Guidelines are periodically amended. Our Corporate Governance Guidelines are available at www.pepsico.com under “Company”—“Corporate Governance” and are available in print to any shareholder who requests a copy.

PepsiCo is also proud of its commitment to be a socially, environmentally and ethically responsible company. This commitment is evidenced in part by our robust Global Code of Conduct. Our Code is available on the Company’s website at www.pepsico.com under “Company”—“Global Code of Conduct.” Annually, all of PepsiCo’s directors and executives, including each executive

officer, complete certifications with respect to their compliance with our Global Code of Conduct.

BOARD LEADERSHIP STRUCTURE

PepsiCo’s governing documents allow the roles of Chairman and CEO to be filled by the same or different individuals. This approach allows the Board flexibility to determine whether the two roles should be separate or combined based upon the Company’s needs and the Board’s assessment of the Company’s leadership from time to time. A majority of the votes cast at our 2012 Annual Shareholders’ Meeting voted against a proposal that our Board adopt a policy requiring our Chairman to be an independent director. Although our Board regularly considers and is open to different structures as circumstances may warrant, the Board believes that the current arrangement of having a strong independent Presiding Director combined with the leadership of our Chair and CEO is currently in the best interests of PepsiCo and its shareholders.

Presiding Director

Our Corporate Governance Guidelines provide that if the Chairman of the Board is not an independent director, an independent director shall be designated as the Presiding Director by the independent members of the Board based on the recommendation of the Nominating and Corporate Governance Committee. The position of Presiding Director rotates among the independent directors of the Board for a three-year term, and the Board evaluates the Presiding Director’s performance annually under the guidance of the Nominating and Corporate Governance Committee.

CORPORATE GOVERNANCE AT PEPSICO (CONTINUED)

Presiding Director Duties:

Based on feedback received from our shareholders, our Board recently determined to amend PepsiCo’s Corporate Governance Guidelines to clarify that our Presiding Director has authority to approve information sent to the Board, rather than only provide advice with respect to such information. The amended Corporate Governance Guidelines are available on our website at www.pepsico.com under “Company”—“Corporate Governance.”

In May 2010, the Board of Directors appointed James J. Schiro as the Presiding Director of the Board to serve a three-year term. Mr. Schiro continued in the role throughout 2012 and performed the above duties in addition to assisting the Board of Directors in the fulfillment of its responsibilities in general. In February 2013, the independent members of our Board of Directors designated Ian M. Cook to serve as the Presiding Director of the Board for a three-year term beginning in May 2013, upon expiration of Mr. Schiro’s term as Presiding Director.

Chairman of the Board

Each year, our Board of Directors elects one of its own members as Chairman by considering the best interests of PepsiCo and its shareholders. This is a topic of great importance to our Board, as the Board believes the determination of PepsiCo’s leadership structure is one of its primary responsibilities. In making this critical determination, our Board carefully considers various factors, including: the strategic goals of the Company; the unique opportunities and challenges PepsiCo is facing; the various capabilities of our Directors; the dynamics of our Board; best practices in the market; and feedback from our shareholders and other constituents.

As part of its most recent Board leadership assessment, the Board gave thorough consideration to the results of the Independent Chairman proposal voted on at our 2012 Annual Shareholders’ Meeting and to each of the other factors outlined above, among others. The Board determined that the most effective leadership structure for PepsiCo at the present time is to strike the right balance between effective independent oversight of PepsiCo’s business and Board activities with a strong, independent Presiding Director and consistent corporate leadership in the form of our combined Chairman and CEO.

DIRECTOR INDEPENDENCE

The Company’s Corporate Governance Guidelines provide that an independent director is a director who meets the New York Stock Exchange definition of independence, as determined by the Board. This definition is included in the Corporate Governance Guidelines, which are available at www.pepsico.com under “Company”—“Corporate Governance.” In making a determination of whether a director is independent, the Board of Directors considers all relevant facts and circumstances, including but not limited to the director’s commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships.

Consistent with these considerations, the Board of Directors has reviewed certain relationships and transactions between the Company and the members of the Board (and their respective affiliated companies) and has affirmatively determined that the non-management directors standing for election listed below are independent within the meaning of the rules of the New York Stock Exchange. In addition, the Board previously

CORPORATE GOVERNANCE AT PEPSICO (CONTINUED)

determined that Arthur C. Martinez (who retired from the Board of Directors effective as of the 2012 Annual Meeting) was an independent director.

In arriving at the foregoing independence determination, the Board of Directors considered transactions and relationships between each director or any member of his or her immediate family and the Company, its subsidiaries or its affiliates, including transactions between PepsiCo and Bunge Limited, where Mr. Weisser serves as Chairman and Chief Executive Officer. PepsiCo purchased raw materials from subsidiaries of Bunge Limited through arm’s-length, ordinary course commercial transactions during 2012. The aggregate amounts involved in these commercial transactions during 2012 were significantly less than the greater of $1 million or 1% of the consolidated gross revenues of either PepsiCo or Bunge.

COMMUNICATIONS TO THE BOARD OF DIRECTORS

The PepsiCo Corporate Law Department reviews all communications sent to the Board of Directors and regularly provides a summary of communications to the Board that relate to the functions of the Board or a Board Committee or that otherwise require Board attention. Directors may at any time discuss the Board communications received by the Company and request copies or summaries of such communications. In addition, the Corporate Law Department may forward certain communications only to the Presiding Director, the Chair of the relevant Committee or the individual Board member to whom a communication is directed. Concerns relating to PepsiCo’s accounting, internal control over financial reporting or auditing matters will be referred directly to members of the Audit Committee. Those items that are unrelated to a director’s duties and responsibilities as a Board member may not be provided to the Board by the Corporate Law Department, including, without limitation, solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and material that is determined to be illegal or otherwise inappropriate.

Shareholders and other interested parties may send communications directed to the Board of Directors, a Committee of the Board, the Presiding Director, the independent directors as a group or an individual member of the Board by any of the following means:

POLITICAL CONTRIBUTIONS POLICY

In 2005, the Board of Directors adopted a Political Contributions Policy for the Company, which is amended from time to time. The Political Contributions Policy, together with other policies and procedures of the Company, guides PepsiCo’s approach to political contributions. As specified in its Charter, our Nominating and Corporate

Governance Committee oversees this Policy and annually reviews the Company’s key public policy issues, its engagement in the public policy process and its political activities and expenditures. In keeping with our goal of transparency, our Political Contributions Policy and our annual U.S. political contributions are posted at www.pepsico.com under “Company”—“Corporate Governance”—“Statements and Policies.”

CORPORATE GOVERNANCE AT PEPSICO (CONTINUED)

CORPORATE GOVERNANCE AT PEPSICO (CONTINUED)

THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating and Corporate Governance Committee, which was established in 1997 and renamed in 2002, held six meetings in 2012. The responsibilities of the Nominating and Corporate Governance Committee include: (a) identifying, reviewing and recommending to the Board of Directors for election and/or appointment qualified candidates for membership on the Board and the Committees of the Board; (b) developing and recommending to the Board corporate governance principles and other corporate policies and otherwise performs a leadership role in shaping the Company’s corporate governance policies and practices; (c) developing and monitoring Board succession plans; (d) overseeing the development and implementation of succession plans for the Company’s CEO and other executive officers; (e) developing and recommending to the Board criteria and qualifications for selecting director candidates; (f) making recommendations to the Board concerning the composition, size, structure and activities of the Board and its Committees; (g) assessing and reporting to the Board on the performance and effectiveness of the Board and its Committees; and (h) reviewing and reporting to the Board with respect to director compensation and benefits. The Nominating and Corporate Governance Committee Charter is available on the Company’s website at www.pepsico.com under “Company”—“Corporate Governance” and is also available in print to any shareholder who requests a copy. The Nominating and Corporate Governance Committee is comprised entirely of directors who meet the independence requirements of the New York Stock Exchange.

Process for Selection and Nomination of Directors; Consideration of Director Diversity

In fulfilling its responsibility to identify and recommend to the Board qualified candidates for membership on the Board, the Nominating and Corporate Governance Committee considers the following attributes of candidates for the Board of Directors: (i) relevant knowledge, diversity of background and experience in areas including business, finance, accounting, technology, marketing, international business and government; (ii) personal qualities of leadership, character, judgment and whether the candidate possesses a reputation in the community at large of integrity, trust, respect, competence and adherence to the highest ethical standards; (iii) roles and

contributions valuable to the business community; and (iv) whether the candidate is free of conflicts and has the time required for preparation, participation and attendance at meetings. In addition, while not a formal policy, PepsiCo’s director nomination processes call for the Nominating and Corporate Governance Committee, during the review and selection process, to seek diversity within the Board of Directors and adhere to the Company’s philosophy of maintaining an environment free from discrimination based upon race, color, religion, national origin, sex, age, disability, sexual orientation, marital status or any unlawful factor. The Nominating and Corporate Governance Committee annually assesses the effectiveness of these factors in the director selection and nomination process.

The Nominating and Corporate Governance Committee will consider recommendations for director nominees made by shareholders and evaluates them using the same criteria as for other candidates. Recommendations received from shareholders are reviewed by the Chairman of the Nominating and Corporate Governance Committee to determine whether the candidate meets the Board’s minimum membership criteria set forth in the Corporate Governance Guidelines, and if so, whether the candidate’s expertise and particular set of skills and background fit the current needs of the Board of Directors.

Any shareholder recommendation must be sent to the Corporate Secretary of PepsiCo at 700 Anderson Hill Road, Purchase, New York 10577 and must include detailed background information regarding the suggested candidate that demonstrates how the individual meets the Board membership criteria.

From time to time, the Nominating and Corporate Governance Committee engages consulting firms to perform searches for director candidates who meet the current needs of the Board. If a consulting firm is retained to assist in the search process for a director, a fee is paid to such firm.

THE AUDIT COMMITTEE

The Audit Committee, which was established in 1967, held eleven meetings in 2012. The Audit Committee’s primary responsibilities are to retain the Company’s independent registered public accountants (taking into account the vote on

CORPORATE GOVERNANCE AT PEPSICO (CONTINUED)

shareholder ratification) and to assist the Board’s oversight of: (a) the quality and integrity of the Company’s financial statements and its related internal controls over financial reporting; (b) the Company’s compliance with legal and regulatory requirements; (c) the independent registered public accountants’ qualifications and independence; and (d) the performance of the Company’s internal audit function and the independent registered public accountants. The report of the Audit Committee is set forth beginning on page 25 of this Proxy Statement. The Audit Committee Charter is available on the Company’s website at www.pepsico.com under “Company”—“Corporate Governance” and is also available in print to any shareholder who requests a copy.

Financial Expertise and Financial Literacy

The Board of Directors has determined that Dina Dublon and Alberto Weisser, members of our Audit Committee, satisfy the criteria adopted by the SEC to serve as “audit committee financial experts.” In addition, the Board of Directors has determined that Shona L. Brown, George W. Buckley, Ian M. Cook, Dina Dublon, Alberto Ibargüen, and Alberto Weisser, constituting all members of our Audit Committee, as well as Victor J. Dzau, who will begin serving on the Audit Committee effective as of May 2013, are independent directors pursuant to the requirements under the Exchange Act and the New York Stock Exchange Listing Standards, and are financially literate within the meaning of the New York Stock Exchange Corporate Governance Listing Standards.

DIRECTORS ON MULTIPLE AUDIT COMMITTEES

None of the Company’s directors serves on the audit committee of more than three public companies.

THE COMPENSATION COMMITTEE

The Compensation Committee, which has been active since 1955, held six meetings during 2012. The Compensation Committee: (a) oversees the policies of the Company relating to compensation of the Company’s executives and makes recommendations to the Board with respect to such policies; (b) produces a report on executive compensation for inclusion in the Company’s Proxy Statement; (c) oversees the design of all employee benefit plans and programs of the Company, its subsidiaries and divisions; (d) meets at least annually with the CEO to discuss the CEO’s self-

assessment in achieving individual and corporate performance goals and objectives; (e) oversees the evaluation of the executive officers and other key executives deemed to be under the Compensation Committee’s purview and evaluates and approves the individual elements of total compensation for such officers; and (f) evaluates its relationship with any compensation consultant for any conflicts of interest. Additional information on the roles and responsibilities of the Compensation Committee is provided in the Compensation Discussion and Analysis beginning on page 27 of this Proxy Statement.

The Compensation Committee is comprised entirely of independent members of the Board of Directors who are also “outside directors” for purposes of Section 162(m) of the Internal Revenue Code and “non-employee directors” for purposes of Section 16 of the Exchange Act. The Compensation Committee Report is set forth on page 57 of this Proxy Statement. The Compensation Committee Charter is available on the Company’s website at www.pepsico.com under “Company”—“Corporate Governance” and is also available in print to any shareholder who requests a copy.

The Compensation Committee has engaged Frederic W. Cook & Co. (“Cook”) as its independent external advisor. The Compensation Committee reviewed its relationship with Cook, considered Cook’s independence and the existence of potential conflicts of interest, and determined that the engagement of Cook did not raise any conflict of interest. In reaching this conclusion, the Compensation Committee considered various factors, including the following six factors set forth in the SEC rules regarding compensation advisor independence: (i) the provision of other services to the Company by Cook; (ii) the amount of fees received from the Company by Cook as a percentage of Cook’s total revenue; (iii) Cook’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of an individual advisor employed by Cook that provides advice to the Compensation Committee with a member of the Compensation Committee; (v) any stock of the Company owned by an individual advisor employed by Cook that provides advice to the Compensation Committee; and (vi) any business or personal relationship of Cook or an individual advisor employed by Cook that provides advice to the Compensation Committee with an executive officer of the Company.

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RELATED PERSON TRANSACTIONS

The Board of Directors has adopted written Related Person Transaction Policies and Procedures that apply to, where determined by the General Counsel:

Review and Approval of Transactions with Related Persons

Transactions with related persons are reviewed in advance by the Audit Committee whenever possible, or as soon as possible thereafter. The Audit Committee will review all relevant facts and circumstances and approve or disapprove of the entry into a transaction. The Audit Committee will take into account, among other factors:

The Audit Committee has considered and adopted standing pre-approvals under the policy for limited transactions with related persons. On an annual basis, the General Counsel will provide the Chair of the Audit Committee with the list of transactions deemed pre-approved under the policy.

Transactions with Related Persons

There are no related person transactions that require reporting under SEC rules.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee is now, or was during 2012, an officer or employee of the Company. No member of the Compensation Committee had any relationship with the Company or any of its subsidiaries during 2012 pursuant to which disclosure would be required under applicable rules of the SEC pertaining to the disclosure of transactions with related persons. None of the executive officers of the Company currently serves or served during 2012 on the board of directors or compensation committee of another company at any time during which an executive officer of such other company served on PepsiCo’s Board of Directors or Compensation Committee.

BOARD OF DIRECTORS’ ROLE IN RISK OVERSIGHT

The Company’s risk management process is intended to ensure that risks are acknowledged and taken knowingly and purposefully. As such, both of the Company’s senior management, including the CEO, and its Board of Directors, are involved in PepsiCo’s integrated risk management framework, which is designed to identify, assess, prioritize, address, manage, monitor and communicate risks across the Company’s operations. The Board of Directors has ultimate responsibility for risk oversight under this framework. Consistent with this approach, one of the Board’s primary responsibilities is overseeing and interacting with senior management with respect to key aspects of the Company’s business, including risk assessment and risk mitigation. In addition, the Board has delegated oversight of certain categories of risk to designated Board committees. The Audit Committee assists the Board in overseeing the Company’s risk management processes as well as the Board’s oversight of financial, employee safety and compliance risks facing the Company. The Compensation Committee assists the Board in overseeing potential risks that may be associated with the Company’s compensation programs, as discussed further below. The Committees report to the Board regularly on matters relating to the specific areas of risk the Committees oversee. In addition, throughout the year, the Board and the relevant Committees receive updates from management with respect to various enterprise risk management issues and dedicate a portion of their

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meetings to reviewing and discussing specific risk topics in greater detail.

The Company’s integrated risk management framework also includes both division level and geographically diverse senior-management level risk committees that are cross-functional and that work together to identify, assess, prioritize and address strategic, financial, operating, business, compliance, safety, reputational and other risks to the Company and its divisions. The Company’s senior management engages with and/or reports to PepsiCo’s Audit Committee and/or Board of Directors on a regular basis to address high priority risks.

At its February 2013 meeting, the Compensation Committee reviewed the results of the 2012 annual compensation risk assessment and concluded that the risks arising from the Company’s overall compensation programs are not reasonably likely to have a material adverse effect on the Company.

SHAREHOLDER ENGAGEMENT

We believe that building positive relationships with our shareholders is critical to PepsiCo’s long-term success. We value the views of our shareholders and other stakeholders, and we solicit input throughout the year on topics such as portfolio strategy, capital allocation, corporate governance, transparent public disclosure, executive compensation, sustainability and corporate social responsibility. Our engagement activities have resulted in our receiving valuable feedback from shareholders and other stakeholders, who have provided important external viewpoints that inform our decisions and our strategy. For example:

AUDIT COMMITTEE REPORT

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AUDIT AND NON-AUDIT FEES

EXECUTIVE COMPENSATION

At our 2012 Annual Meeting, shareholders showed strong support for our executive compensation program, with 93% of the votes cast approving our advisory resolution.

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EXECUTIVE COMPENSATION (CONTINUED)

EXECUTIVE COMPENSATION (CONTINUED)

In 2012, PepsiCo again received strong support for its Executive Compensation Program with 93% of votes cast approving our advisory resolution in May 2012. As in prior years, the Committee considered input from our shareholders and other stakeholders as part of its annual review of PepsiCo’s Executive Compensation Program. Following this review, the Committee implemented refinements to the 2013 LTI Program design to further align executive pay and shareholder value.

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EXECUTIVE COMPENSATION (CONTINUED)

EXECUTIVE COMPENSATION (CONTINUED)

1. Long-Term Incentive Compensation.    To motivate senior executives to deliver sustained long-term performance and to promote an ownership culture, the annual LTI award is weighted more heavily than any other component of total compensation for NEOs.

Target LTI award levels vary by position and are determined based on competitive benchmarking. Target award levels are expressed in dollars (rather than as a percentage of base salary). The actual size of awards granted ranged from 0% to 125% of target in 2012 and were determined for each executive officer based on prior year business performance, individual performance and potential for future contributions to PepsiCo, as determined by the Compensation Committee. The Compensation Committee directly approves individual awards to executive officers.

The annual LTI award is comprised of PEPunits representing 60% of the award value, and a LTC Award representing 40% of the award value. The LTI program is designed to reward business operating performance and market-based performance as measured through absolute share price improvement as well as relative shareholder returns.

Both the PEPunits and the LTC Award are granted under the shareholder-approved 2007 Long-Term Incentive Plan and are intended to qualify as performance-based compensation deductible under Section 162(m) of the Internal Revenue Code. The Compensation Committee has authority to decrease, but not increase, the award payable based on satisfaction of the objective pre-established business performance metrics.

1(a). 2012 PEPunit Awards.    For the 2012 PEPunit award, the number of shares that are earned at the end of the 2012 – 2014 performance period is determined by multiplying the target number of PEPunits awarded by the following adjustments:

The level of performance achieved with respect to the 2012 PEPunit awards will be determined in early 2015, after the end of the applicable three-year performance period. PEPunits do not earn or pay out dividends.

1(b). 2012 LTC Awards.    The LTC Award is denominated and paid in cash, subject to the level of performance achieved with respect to two equally-weighted three-year operating performance metrics. For the 2012 – 2014 performance period, the performance metrics are core constant currency EPS growth and core constant currency International Net Revenue growth as a multiple of core constant currency North America Net Revenue growth (with a minimum floor of 2% North America Net Revenue growth). The potential payout is capped at 150% of the dollar amount awarded on the grant date.

The level of performance achieved with respect to the 2012 LTC Awards will be determined in early 2015, after the end of the applicable three-year performance period.

1(c). Performance Stock Units (PSUs).    Through 2011, NEOs received annual grants of PSU awards that are paid in shares of PepsiCo Common Stock, subject to the attainment of operating performance targets over each award’s performance period. Vesting of PSUs awarded in 2010 and 2011 is subject to the following two equally-weighted financial performance metrics:

2010 PSU Performance and Payout.    In March 2010, the Compensation Committee set two-year (2010 – 2011) average core constant currency EPS growth of between 10% and 12% and two-year (2010 – 2011) average core constant currency International Net Revenue growth as a multiple of

EXECUTIVE COMPENSATION (CONTINUED)

two-year average core constant currency North America Net Revenue growth of 2.0-2.5x (with a minimum floor of 2% North America Net Revenue growth) as the financial performance levels necessary for executive officers to earn the target number of shares under the 2010 PSU award. PepsiCo’s actual two-year average core constant currency EPS growth of 9% was below target, and our actual two-year average core constant currency International Net Revenue growth as a multiple of two-year average core constant currency North America Net Revenue growth of 4.7x exceeded target. As a result, 104.4% of the PSUs awarded to executive officers in 2010, reflecting 2010 and 2011 performance, will vest and be paid out as set forth in the following table:

2011 PSU Performance.    In March 2011, the Compensation Committee set two-year (2011 – 2012) average core constant currency EPS growth of between 7% and 9% and 2.0-2.5x two-year (2011 – 2012) average core constant currency International Net Revenue growth as a multiple of two-year average core constant currency North America Net Revenue growth (with minimum North America Net Revenue growth of 2%) as the financial performance levels necessary for executive officers to earn the target number of shares under the 2011 PSU award. As a result of the planned 2012 decline

in core constant currency EPS noted on page 27, PepsiCo’s actual two-year average core constant currency EPS growth of 0.2% was below the performance target range, and our actual two-year average core constant currency International Net Revenue growth as a multiple of North America core constant currency Net Revenue growth of 4.0x exceeded target. As a result, 37.5% of the 2011 PSUs awarded to executive officers, reflecting 2011 and 2012 performance, will be forfeited due to performance results.

2011 PSUs remain subject to an additional year of service-based vesting, and will be paid out in early 2014. As noted above, PepsiCo has never adjusted performance targets applicable to any incentive award.

2. Annual Incentive Compensation.    We provide annual cash incentive opportunities to our NEOs under the Executive Incentive Compensation Plan (“EICP”). Awards granted under the EICP are designed to drive Company, business unit and individual performance.

Each executive officer’s target annual incentive opportunity (expressed as a percentage of base salary) is based on job responsibility, alignment with internally comparable positions and peer company market data. If financial performance with respect to a specific measure is above or below target, the actual payout will be above or below the target annual incentive opportunity.

When determining the actual annual incentive award payable to each executive officer, the Compensation Committee considers both business and individual performance. Weighting of performance metrics for NEOs other than the Chairman and CEO are illustrated below:

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EXECUTIVE COMPENSATION (CONTINUED)

Individual Performance Metrics:    The Compensation Committee evaluates individual performance based on metrics related to an individual’s contribution to PepsiCo’s strategic business imperatives, such as improving operating efficiencies, driving sustainable innovation, increasing customer satisfaction and management and development of a diverse and talented workforce. The strategic business imperatives are intended to be challenging. They can be both qualitative and quantitative and vary for each executive officer.

Individual Results:    In determining annual incentive awards for 2012, the Compensation Committee considered the following individual accomplishments by NEOs other than the Chairman and CEO, with no specific weighting applied (individual performance of our Chairman and CEO is described on page 28 of this Proxy Statement):

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