Nooyi, whose 5-year tenure has been marred by the global financial crisis, recession and unprecedented commodity inflation, also took responsibility for a series of management missteps - from under-investing in some brands to over-promising Wall Street.
Anytime you make a mistake ... it's the CEO's responsibility, Nooyi told reporters after a much-anticipated meeting with investors on Thursday. The buck stops with me.
Nooyi has come under pressure from Wall Street for a stagnant stock price and a lagging North American beverage business. She has been criticized for taking her eye off the core business of sodas to expand into healthier products, such as hummus and drinkable oatmeal.
Analysts agreed that the steps were needed to boost drink sales, including Pepsi-Cola, Sierra Mist soda and Tropicana juice, and stem the decline in U.S. market share against archrival Coca-Cola Co
Resetting the earnings base in 2012 is the right thing to do for the long-term health of the business, said Consumer Edge Research analyst Bill Pecoriello. Now the key will be the effectiveness of the execution and stepped-up spending.
PepsiCo shares, which gained nearly 4 percent in the weeks leading up to Thursday's meeting, closed down 3.7 percent at $64.27 on the New York Stock Exchange, as investors adjusted to a new, lower earnings base and the fact that the promised improvement will not be immediate.
The company has great brands and wonderful overseas presence, but investors want points on the board sooner rather than later, said Edward Jones analyst Jack Russo.
Still, not everyone on Wall Street was convinced the plan was sufficient.
We do not believe that the key elements of today's announcement will fully satisfy investors' expectations, said Wells Fargo analyst Bonnie Herzog. Moreover, commentary from the meeting confirms our long-standing view that PepsiCo's turnaround is a multi-year initiative.
The company also reported higher-than-expected fourth-quarter profit.
PepsiCo, based in Purchase, New York, expects to cut 8,700 jobs, or 3 percent of its global workforce, across 30 countries as part of a plan to save an extra $1.5 billion over the next three years.
It also plans to increase advertising and marketing by $500 million to $600 million this year, centered on 12 brands, including Pepsi, Mountain Dew, Gatorade, Tropicana, Quaker and Doritos. It will spend an additional $100 million this year to improve delivery and display racks.
As a result, earnings in 2012 will decline 5 percent from 2011, the company said. It forecast an additional 3 percentage point hit from foreign exchange rates.
That suggests reported 2012 earnings of $4.05 per share, according to Barclays Capital analyst Michael Branca, below Wall Street estimates of $4.55 per share.
We expect the stock to establish a new floor today at the low to mid $60s, Branca said in a research note. Higher-quality EPS along with the right strategic decisions, we think, will garner a higher multiple for PepsiCo.
James Tierney, chief investment officer at W.P. Stewart said it will take three to four quarters before it becomes clear whether the plan is working.
The positive is they are doing something. More ad spending is a positive and costs cuts are encouraging, he said.
The cost cuts, which will also include consolidating manufacturing and warehouse facilities, should result in savings of $1.5 billion by the end of 2014, in addition to $1.5 billion in already planned savings over that period.
PepsiCo also announced a 4 percent increase in its annual dividend and an increase in its share buybacks, forecasting at least $3 billion in repurchases.
PepsiCo plans to increase its ad budget as a percentage of sales, a measurement that has historically lagged Coke's. It plans to reduce its capital expenditures as a percent of sales and said it will shrink the number and size of tuck-in acquisitions it makes.
The company also said the chief of its Global Beverage Group, Massimo d'Amore, would retire. The company recently named former Frito-Lay chief Albert Carey to run the business.
The company will also streamline its portfolio, either turning around or divesting underperforming businesses.
PepsiCo reported a fourth-quarter profit of $1.42 billion, or 89 cents per share, up from $1.37 billion, or 85 cents per share, a year earlier.
Excluding items, PepsiCo earned $1.15 per share, topping analysts' average estimate of $1.13 per share, according to Thomson Reuters I/B/E/S. Revenue rose 11 percent to $20.2 billion.
Looking forward, the company expects a 7 percent increase in the cost of commodities this year, adding that it does not expect to be able to offset the full magnitude of that rise with price increases.
For 2013, PepsiCo expects earnings to increase at a high single-digit rate.
(Reporting by Martinne Geller in New York; editing by Dave Zimmerman, Maureen Bavdek and Andre Grenon)