Hosted by the Department of Trade, Industry and Competition (DTIC) earlier today, the conference recognises the vital role of Employee Share Ownership Programs (ESOPs) in promoting greater economic inclusion for South Africans.
“It is an incredible motivation for us at PepsiCo SA and for the devoted Board of Trustees to have been recognised in this way. Winning these awards have spurred us on to continue positively impacting the lives of employees and the households they support,” said Melissa-Joy Golden, Chairperson of the Bašumi Trust.
Established in November 2021, the Bašumi Trust is a R1.655 billion Broad-based Black Economic Empowerment (BBBEE) ESOP, and forms part of the Public Interest Commitments made to the South African Government at the time of PepsiCo’s acquisition of Pioneer Foods in 2020.
The Trust was recognised for their Best Governance Policies, as well as the Most Innovative funding Model. The former award recognises the ESOP demonstrating the most effective and transparent governance practices in selection of Trustees, empowering workers, and promoting worker participation at the highest levels of decision making. The latter highlights the ESOP with the approach to funding employee ownership that provides the best financial support to employee-beneficiaries.
“The Trust was designed with the aim of maximising outcomes and enhancing the long-term economic benefit for its recipients,” explains Riaan Heyl, CEO at PepsiCo SA. “It serves as an ideal vehicle to demonstrate our dedication to promoting various socio-economic goals such as job creation, empowerment, fostering talent and developing our associates.”
The Bašumi Trust currently boasts 11,452 beneficiaries and is open to all permanent employees who are not directors (i.e., middle management and below) once they have completed one year of employment.
The original estimate for the annual dividend was about R1200 per Bašumi participant. But thanks to PepsiCo Inc’s positive global earnings results and long-term share price performance, the 2023 inaugural annual dividend payment was R1908.35, while the 2024 annual dividend payment showed additional growth being paid out at an impressive R2468.27, demonstrating the upward trajectory presently being enjoyed by the Trust.
To date the Trust has distributed R50million in dividends and R33million in terms of pro-rata accelerated milestone payments to qualifying beneficiaries.
PepsiCo, Inc Q1 earnings
The awards coincided with the release of PepsiCo Inc’s (NASDAQ:PEP) Q1 financial results.
“During the first quarter, our businesses remained agile and performed well, with a strong
performance from our international business. We delivered a sequential improvement in our
volume trends, and year-over-year growth in our net revenue, operating profit margin and EPS” said Chairman and CEO Ramon Laguarta.
Laguarta continued, “As we look ahead, we will continue to focus our efforts on executing well in the marketplace and delivering great-tasting products that offer convenience and good value to the consumer. We will also continue to elevate and accelerate our productivity initiatives to support continued investments in our brands, capabilities and pep+ initiatives.
As a result, we continue to expect to deliver at least 4 percent organic revenue growth and at least 8 percent core constant currency EPS growth in 2024. In addition, our previously announced 7 percent annualized dividend increase is expected to begin with our June 2024 payment and will represent our 52nd consecutive annual increase”.
Heyl explains: “Whilst the PepsiCo South Africa business continues to operate in a challenging macro-economic environment, the construct of the Bašumi Trust, with shares held in the global PepsiCo Inc. will continue to enable the higher than planned benefits for beneficiaries”.
“As employees continue their employment with PepsiCo South Africa, they not only have a stake in the company’s financial success but also create an investment for their future. It is heartwarming to receive feedback from our employees who have benefitted from the Trust,” concluded Golden. “This feeling of ownership cultivates a stronger dedication to the company’s long-term objectives, leading to improved performance and engagement”.
