PepsiCo raises dividend payout and share repurchase
May 02, 2007
by Eric Schroeder
PLANO, TEXAS — The board of directors of PepsiCo, Inc. approved a plan to increase cash returns to shareholders by raising both the company’s targeted dividend payout rate and its share repurchase authorization amount.
"The plans reflect our continued confidence in the growth of our business and our steadfast commitment to providing strong cash returns to our shareholders," said Indra Nooyi, chairman and chief executive officer.
As part of the move, PepsiCo increased its dividend payout target to 50% of prior year’s earnings, beginning with its May dividend declaration. The company also announced a 25% increase in the annual dividend, raising it to $1.50 per share from $1.20 per share. The dividend is payable on June 29 to shareholders of record as of June 8.
The board of directors also approved a higher level of share repurchases, authorizing the repurchase of up to an additional $8 billion through mid-2010, once the current share repurchase authorization is complete. The current $8.5 billion authorization began in 2006 and has approximately $6 billion remaining.
PepsiCo said it expects share repurchases of $4.3 billion in 2007, up from its previous guidance of $3.3 billion, and annual share repurchases of $4 billion to $5 billion over the next several years.