Just a day after the election of Republican Donald Trump, Pepsico CEO Indra Nooyi took a hard line against some of the comments the next president made about women while on the campaign trail. Nooyi said the disparagement of women is a negative strain in the world that has to be ended.
“Forget about the Pepsi brand. How dare you talk about women that way,” Nooyi said on Thursday morning, referring to comments Trump made on the campaign trail and in an Entertainment Tonight video roughly a decade ago that surfaced in October. “If we don’t nip this in the bud it is going to be a lethal force in society,” Nooyi added, in comments made at the New York Times Dealbook Conference in Manhattan.
When asked about the election result, where Trump beat Democratic nominee Hillary Clinton, Nooyi responded, “is there a box of tissues here?” However, she then pivoted by saying the new administration will need to ensure the safety and inclusion of non-white people, women, and the LGBT community. “The first thing we have to do is assure everyone living in the United States that they are safe. Nothing has changed as a result of this election” she said.
During a half hour conversation, Nooyi candidly answered questions ranging from the election, to statewide propositions that tax sugary drinks, and the hedge fund activists who’ve often targeted her company.
Nooyi said propositions to tax sugary drinks were not about about health policy, but instead were a way to for government’s to generate revenues. In terms of the sugar and salt in Pepsico’s soda and snack products, Nooyi said her company’s products like Lays chips contain mostly natural ingredients and can be enjoyed healthily in moderation. “We never want you to make a choice between health and taste, health and availability, and health and price,” she said.
Aside from the election, Nooyi’s comments were most free-wheeling when she spoke about shareholder activism, a strategy on Wall Street that seeks to impart investor influence in corporate boardrooms. Since the financial crisis, activists have agitated for corporate breakups and mergers, while also ousting underperforming CEOs who fail to deliver rising stock returns to investors. At times, Trian Fund Management, a hedge fund run by billionaire Nelson Peltz, has targeted Pepsico and Nooyi.
In 2012, Trian released a white paper arguing Pepsico should split its beverage business, which includes products ranging from soda to Gatorade and bottled water, from its Frito Lay snacks business. Trian further urged Pepsico to merge a spun off snacks business with another company like Mondelez, or what was previously Kraft Foods. However, Nooyi said activists need to pay more attention to the challenges of operating a business, and not just their more abstract financial analysis.
“Companies don’t run on spreadsheets,” Nooyi said, before giving her impression on how funds analyze peer groups and operating segments and then deliver recommendations through white papers, letters to a corporate board, or in press reports. Recommendations like mergers or split offs can make sense on paper, Nooyi said, but they can be complicated to implement and take years to complete.
Nooyi further said activists should wield their influence with the press responsibly. “I don’t wake up in the morning to destroy shareholder value,” Nooyi said to laughs, before stating, “shaming CEOs doesn’t help.” She further took a hard line against some activists.
“There are asset creators, asset owners, asset managers, and asset manipulators,” Nooyi said. “I think asset creators get the short end of the stick,” she said, noting that it is the asset managers and “manipulators” who get all of the attention. “Things have to change,” Nooyi said.
Pepsico shares were falling 4% in midday trading at $102.87. Year-to-date the company’s shares have risen nearly 3%, excluding dividends.