PepsiCo Inc. and activist investor Trian Fund Management LP have buried the hatchet—at least for now.
The snack and beverage giant said Friday that William R. Johnson , the retired chairman of H.J. Heinz Co. and an advisory partner of Trian, will join PepsiCo’s board as an independent director.
The addition of Mr. Johnson, recommended by PepsiCo shareholder Trian, makes it unlikely Trian will launch a potentially messy proxy fight for board seats in the coming weeks.
The compromise also means Trian probably will dial down its often noisy public campaign since 2013 to split up PepsiCo, whose billion-dollar brands include Gatorade sports drinks and Lay’s potato chips.
Trian has argued PepsiCo’s beverage-and-snack businesses would perform better separately because the beverage unit is growing more slowly than its snack unit and is less profitable. PepsiCo has been losing market share to rival Coca-Cola Co. , exacerbating an industrywide decline in U.S. soda consumption.
But PepsiCo Chairman and Chief Executive Indra Nooyi has steadfastly opposed a split, arguing the company benefits from its scale. A person close to the company reiterated Friday that a split isn’t being considered.
Ms. Nooyi’s hand was strengthened in October, when PepsiCo raised its 2014 profit outlook for the second time after price increases, cost cuts and emerging markets growth fueled better-than-expected third-quarter results.
Nelson Peltz , Trian’s chief executive, praised PepsiCo as “a world-class’’ company in a news release issued Friday by PepsiCo. “We support [Ms. Nooyi’s] commitment to operational excellence, which has resulted in improved performance at the company,’’ Mr. Peltz added.
In a statement Friday, Ms. Nooyi said Mr. Johnson’s “extensive consumer packaged goods experience will be an important addition’’ to PepsiCo’s board. Trian has “provided valuable input to many aspects’’ of PepsiCo’s business, including the recommendation that Mr. Johnson join its board, Ms. Nooyi added.
While Trian suggested Mr. Johnson as a candidate, the activist typically seeks board members from its own partners and had earlier suggested it could join the board of the beverage unit if Pepsi split up.
It placed Mr. Peltz on the board of Mondelez International Inc. and Trian partner Ed Garden on the board of Bank of New York Mellon Corp. last year. Last week, Trian started a proxy campaign against DuPont Co., seeking to put Mr. Peltz and three others onto the board of the chemicals giant.
As an independent director, Mr. Johnson will be obligated to represent the interests of all shareholders, not just Trian.
Mr. Johnson does serve as an adviser to the activist investor and had grown close to Mr. Peltz after the investor won a board seat at Heinz following a 2006 proxy fight. Trian also turned to a former Heinz executive for the DuPont fight, nominating former finance chief Arthur Winkleblack to that board.
J.P. Morgan analyst John Faucher said breakup chatter is unlikely to go away, but less likely to be aired publicly. “While we still think that a breakup of PepsiCo is highly unlikely, [Mr.] Johnson’s presence on the board will keep it in discussion,’’ Mr. Faucher wrote in a research note.
Friday’s agreement also saves Trian from fighting two proxy fights against major companies at the same time, which would have been an unprecedented challenge for an activist.
PepsiCo said Mr. Johnson will join the company’s board of directors March 23. Mr. Johnson joined Heinz in 1982 and spent 31 years at the company. He became Heinz’s CEO in 1998.
By Mike Esterl and David Benoit. Josh Beckerman contributed to this article.