Market Overview

Wintergreen Advisers Plans Vote Vs. Coke Directors


Wintergreen Advisers today issued a report on The Coca-Cola Company's
(NYSE: KO) 2015 Proxy Statement.

David J. Winters, CEO of Wintergreen Advisers, said: "While there has been
progress in some areas at Coca-Cola, the board continues to give Muhtar Kent
and his team excessive rewards, and we question whether many Coca-Cola
directors are able to vigorously act for all shareholders given their
overlapping business interests."

"Meanwhile, Coca-Cola lags behind while other consumer brands like Heinz and
Kraft pursue bold restructurings. Coca-Cola's board and management lack a
sense of urgency to address Coca-Cola's problems and increase shareholder
value. There are three big questions around Coca-Cola," Winters said:

"What is keeping Coca-Cola from carrying out transformative strategies like
those implemented at Heinz and planned for Kraft?"

"Why does this management continue to receive excessive compensation while
missing the performance targets set by the board?"

"When will the board act to correct this situation?"

Liz Cohernour, Chief Operating Officer of Wintergreen, said: "Wintergreen
plans to vote against Coca-Cola's directors because we believe they have not
exhibited the leadership and independence needed to restore shareholder
confidence and return the company to profitable growth. We urge Coca-Cola
shareholders to carefully consider these issues."

The report notes that a year ago Wintergreen brought attention to what it saw
as serious pay and governance problems at The Coca-Cola Company, beginning
with a proposed equity compensation plan it called "Coke's Big Grab" for its
potential for whopping payouts to management. Coca-Cola later said it would
curtail the plan.

This year, the Wintergreen report notes, Coca-Cola's proxy statement contains
better disclosure than a year ago regarding the value of equity incentive
compensation and required performance hurdles for management. Importantly, it
shows Coca-Cola did not issue secret bonus shares – the much-criticized stock
awards granted without criteria. However, the proxy statement shows Coca-Cola
is falling short in other important areas.

Wintergreen believes the Coca-Cola 2015 Proxy Statement:

* Contains a misleading characterization of CEO Muhtar Kent's pay.
Coca-Cola's proxy statement says Muhtar Kent "respectfully declined" his
annual incentive award, suggesting he took a meaningful pay cut. In fact,
the board increased his stock and option awards, making his total pay
about even with 2014.
* Shows missed performance targets that were apparently overlooked when
awarding pay for top managers. Coca-Cola managers failed to meet two out
of three of their annual performance targets, and met only the very bottom
end of the third.
* Lowers performance hurdles for management in 2015 versus 2014. Coca-Cola's
management not only failed to meet its performance targets in 2014, but
the 2015 proxy shows the Coca-Cola board has lowered the 2015 performance
bar for the coming year, making it easier for management to earn their
annual bonuses.
* Understates the dilutive effect of Coca-Cola's equity compensation awards.
Coca-Cola touts a figure of "$4.2 billion in gross share repurchases" on
two different locations in their 2015 proxy statement, when in fact, net
of dilution from equity compensation, buybacks were only $2.6 billion in
2014. Similarly, the company says it repurchased 98 million shares in
2014, but its shares outstanding only declined by 36 million because of
the dilutive effects of equity compensation.
* Raises questions about the directors' ability to be forceful advocates for
all shareholders. Many board members have overlapping business interests,
and several have business ties with investment bank Allen & Co. - whose
CEO is Coca-Cola director Herbert Allen. Wintergreen believes these
business ties can make the board an insular club rather than a vigilant
protector of shareholders' interests.

The Wintergreen report is available at:

Posted-In: News Legal Press Releases


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