UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. )
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2020 PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
Wednesday, April 22, 2020 | | | 8:30 a.m. local time | | | World of Coca-Cola | | | Atlanta, Georgia |
2018 Proxy StatementNotice of Annual Meeting of Shareowners
Wednesday, April 25, 20188:30 a.m., local timeWorld of Coca-ColaAtlanta, Georgia
AT A GLANCE REFRESHING CONSUMERS PRODUCTS SOLD IN 200+ COUNTRIES BEVERAGE BRANDS DAILY SERVINGS NYSE: KO OUR BUSINESS $35.4B NET OPERATING REVENUES (2017, AS REPORTED) $8.3B RETURNED TO SHAREOWNERS* IN DIVIDENDS AND NET SHARE REPURCHASES IN 2017 $195.4B MARKET CAPITALIZATION (AS OF 12/31/2017) 56 YEARS OF CONSECUTIVE ANNUAL DIVIDEND INCREASES (AS OF FEBRUARY 2018) THE POWER OF OUR PEOPLE 700K+ SYSTEM ASSOCIATES WORLDWIDE WE'RE EMPOWERING. WE'RE DIVERSE. 5MM WOMEN TO BE EMPOWERED BY 2020 100% RATING ON THE HUMAN RIGHTS CAMPAIGN'S CORPORATE EQUALITY INDEX (12 YEARS IN A ROW) LISTED AS ONE OF THE TOP 50 COMPANIES FOR DIVERSITY BY BLACK ENTERPRISE MAGAZINE CONSUMER-CENTRIC PORTFOLIO ~4 ,1 0 0 PRODUCTS WORLDWIDE SPARKLING SOFT DRINKS JUICE, DAIRY & PLANT WATER, ENHANCED WATER & SPORTS DRINKS READY-TO-DRINK TEA & COFFEE Our portfolio includes these billion-dollar brands OUR SYSTEM ~250BOTTLING PARTNERS ~900PLANTS RETAIL CUSTOMER OUTLETS 27MM INVESTED $110B+ TOGETHER WITH GLOBAL BOTTLING PARTNERS SINCE 2010 The fairlife® brand is owned by fairlife, LLC, our joint venture with Select Milk Producers, Inc., and fairlife's products are distributed by our Company and certain of our bottling partners. * Non-GAAP. See Annex C for reconciliation to GAAP. FOR MORE INFORMATION VISIT: WWW.COCA-COLACOMPANY.COM
| SHAREOWNER PROPOSAL | 93 |
LETTER TO SHAREOWNERSFROM OUR BOARD OF DIRECTORS
“As we go about our duties as Directors of this Company,we remain fully accountable to you, the shareowners.”
Dear Fellow Shareowner:
We first want to thank you for your investment in The Coca-Cola Company and also for the confidence you put in this Board to oversee your interests in this business.
Last year in this letter, we talked about key developments around the critical refocusing of the Company’s core business model. Our Board remains highly engaged in this important work to reorganize our business and we, along with management, are optimistic about the future.
Our Board will continue to take seriously our role in the oversight of the long-term business strategy, which is the best path to enable our goal of long-term value creation for you, the shareowners.
2017 was a pivotal year for the Company, and significant milestones were achieved. The Company, along with its bottling partners, completed the bottler refranchising process in the U.S. and China. This was an important accomplishment, and the Coca-Cola system is now better
positioned than ever to create growth. The Board also stewarded a successful leadership succession plan with the transition to our new CEO, James Quincey, who is executing his vision as we continue to evolve to a total beverage company.
We are pleased to report that the Compensation Committee of the Board has overseen a comprehensive review of our compensation strategy and programs. We fully appreciate that the Company’s incentive and reward programs are integral to achieving our success. As we’ve refocused our business model, we have evolved our compensation strategy to better align our compensation programs with our growth strategy. We encourage you to review details of the design, which is discussed in the Message from the Compensation Committee beginning on page 46.
We also know that refreshing the Board is a priority for our shareowners. It has been a priority for this Board as well. We seek to ensure that the Board is comprised of high-integrity, highly capable Directors who are equipped to oversee the success of the business and effectively represent the interests of shareowners. We believe this is a well-functioning Board, and it will continue to evolve, as it has done over the last several years.
This year, we have nominated for election at the upcoming meeting two new Director candidates: Caroline Tsay and Christopher Davis. Caroline is CEO of Compute Software, Inc. and Christopher is Chairman of Davis Selected Advisers–NY, Inc. The nominations of Caroline and Christopher are in accordance with our ongoing and long-term succession planning for the Board.
We encourage you to review the qualifications, skills and experience of all of the Director nominees beginning on page 18.
Finally, please know that as we go about our duties as Directors of this Company, we remain fully accountable to you, the shareowners. Ultimately, we believe that accountability to shareowners is integral to our success.
In that spirit, for many years we have conducted a robust engagement program throughout the year, listening to shareowners and considering these viewpoints as we make decisions in the boardroom.
As always, thank you for the confidence that you have placed in us.
March 8, 2018
ANNEX D— Cautionary Note Regarding Forward-Looking Statements | |||||||||||||
Caroline J. Tsay and Christopher C. Davis (not pictured) have each been nominated for election as a Director at the 2018 Annual Meeting.
Q&A WITH OUR PRESIDENT ANDCHIEF EXECUTIVE OFFICER
“We offer beverages for life’severyday moments. Togetherwith our bottling partners, we’refocusing on people’s evolving tastesand preferences by giving themmore of the drinks they want.”
James Quincey
President and Chief Executive OfficerThe Coca-Cola Company
How would you rate The Coca-Cola Company’s performance in 2017?
I was pleased with our accomplishments and results in 2017. We made significant changes and continued to transform to a total beverage company. We continued to gain global value share, and we achieved or exceeded the guidance we gave at the beginning of the year. We saw solid growth in developed markets, particularly in Europe and North America. Our China business built momentum in 2017, even as we restructured our bottling system there. Other emerging markets were more challenging, especially in the first half of the year, but we saw improvement in key markets like India, Argentina and Brazil as we moved into the second half. We also expanded our consumer-centric product portfolio, as we brought to market more than 500 new products. We entered the fast-growing U.S. ready-to-drink coffee category and had a successful global roll-out of CokeZeroSugar in 20 markets. We also continued strategic actions to re-energize our system for future growth. Over the last few years, we have been returning ownership of our Company-owned bottling operations to independent companies around the world. In 2017, we achieved major milestones, as we completed these efforts in the U.S. and China. I am proud that we accomplished this growth while driving significant change at the Company. We implemented a new operating model designed to enable an accountable, performance-driven growth culture that we believe will result in greater returns for our shareowners. This included making significant changes to our leadership team, corporate structure, incentive metrics and compensation philosophy. We also implemented new digital platforms to support our leaner operating environment and improve the employee experience. Ultimately, all of these strategic and tactical changes mean something very important. We assertively shifted our culture – the way we operate, the way we look at growth opportunities and the way we engage with our bottling system. I am excited
Beverages for Life reflects how we’re continuing to grow as a total beverage company. We offer beverages for life’s everyday moments. Together with our bottling partners, we’re focusing on people’s evolving tastes and preferences by giving them more of the drinks they want. That’s how we will become a larger part of the eight beverages a day people drink. It takes the right leadership and culture to make this kind of change work, and we have the right team in place to be successful.
As the new CEO, what is the type of culture you are trying to create at The Coca-Cola Company?
A culture where smart, curious people have the trust and tools they need to take informed risks and grow our business more quickly. It’s as simple as that. That means being more nimble, learning from mistakes and adapting as we go.
There are four behaviors we’re embedding across the Company to help adopt this growth mindset: (1) being curious about our consumers, customers and the outside world; (2) being inclusive – bringing in diverse ideas from inside and outside the Company; (3) ensuring our associates feel empowered and are proactive in putting good ideas into action; and (4) working faster, being more experimental and less afraid to fail through iterative versions 1.0, 2.0 and 3.0. We set the tone at the executive leadership team level and expect everyone at every level to contribute. For example, we must be willing to take a “progress over perfection” mindset as we pilot new things, be willing to learn from our mistakes and pivot as necessary. As leaders, it’s up to us to model this behavior with our teams every day.
We’re also committed to a workplace where all employees are respected and feel supported, which will help all of us be successful. Treating people with respect continues to be at the core of our values and standards. We do not tolerate workplace discrimination or harassment at our Company.
I know that keeping the Board refreshed is a priority for our shareowners. I was elected to the Board nearly a year ago and have already seen the Board demonstrate a commitment to cultivating a highly capable and diverse group of Directors. Our Board has evolved very positively over the last few years on key shareowner issues, and I am confident that under Muhtar’s and Sam’s leadership, our Directors will continue to be well-equipped to represent the interests of our shareowners.
This is a very important topic to me personally. I believe our social license to operate is a privilege, not a right. Today’s consumers care about social and environmental impacts, and many are willing to spend more on products and services from companies that are committed to making a positive impact. These same consumers expect us to be responsible corporate citizens that positively impact their local communities.
Yes, we must grow. But we must grow with conscience.
Everywhere we operate, we do so at the pleasure of the communities we serve. We will always strive to create a positive impact and provide meaningful solutions. We understand that our social license to operate must be earned day in and day out. Sustainability is essential for our planet, our communities, our business and, ultimately, our shareowners.
Investor interest in sustainability continues to increase. A new generation of investors is putting money to work with purpose and in ways that make a difference. As we talk to our investors, many say they want to see clear links between sustainability and our overall business strategy. We have a good story to tell and have made the business case for sustainability.
You’ve seen this with our water replenishment initiative, and you’re starting to see it with our new global packaging vision, World Without Waste, where our goal is to help collect and recycle a bottle or can for every one we sell by 2030.
Finally, what is your favorite Company beverage?
One reason I love the idea of Beverages for Life is that I am, personally, a great example as a consumer. I drink juice in the morning – Simply if I’m in the U.S., innocent if I’m back in the UK, or DelValle if I’m visiting Mexico. I drink smartwaterthroughout the day, and I have been drinking CokeZeroSugar daily for a long time.
ANNUAL MEETING OF SHAREOWNERS
When: Wednesday, April 25, 2018, 8:30 a.m., local time
Where: World of Coca-Cola, 121 Baker Street NW, Atlanta, Georgia 30313
We are pleased to invite you to join our Board of Directors and senior leadership at The Coca-Cola Company’s 2018 Annual Meeting of Shareowners.
Items of Business:
Links to websites included in this Proxy Statement are provided solely for convenience purposes. Content on the websites, including content on our Company website, is not, and shall not be deemed to be, part of this Proxy Statement or incorporated herein or into any of our other filings with the Securities and Exchange Commission (the “SEC”).
2 The Coca-Cola Company
1 | Notice of 2020 Annual Meeting of Shareowners |
WHEN Wednesday, April 22, 2020 8:30 a.m. local time | |
WHERE World of Coca-Cola 121 Baker Street NW Atlanta, Georgia 30313 | |
RECORD DATE Holders of record of our Common Stock as of February 24, 2020 are entitled to notice of, and to vote | |
AUDIOCAST OF THE MEETING Access links to vote, listen to a live audiocast of the meeting, submit questions and learn more about our Company atwww.coca-colacompany.com/annual-meeting-of-shareowners. | |
ATTENDING THE MEETING If you plan to attend the Seepage 100for details. | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2020 ANNUAL MEETING OF SHAREOWNERS TO BE HELD ON APRIL 22, 2020. | |
The Notice of |
Items of Business | Our Board’s Recommendation | |||
COMPANY PROPOSALS | ||||
1 | Elect as Directors the 12 Director nominees named in the attached Proxy Statement to serve until the 2021 Annual Meeting of Shareowners. | FOReach Director Nominee | 11 | |
2 | Conduct an advisory vote to approve executive compensation. | FOR | 45 | |
3 | Ratify the appointment of Ernst & Young LLP as Independent Auditors of the Company to serve for the 2020 fiscal year. | FOR | 90 | |
SHAREOWNER PROPOSAL | ||||
4 | Vote on a shareowner proposal on sugar and public health, if properly presented at the meeting. | AGAINST | 93 |
Advance Voting Methods Please vote using one of the following advance voting methods. Make sure to have your proxy card or voting instruction form in hand and follow the instructions. | |||
SHAREOWNERS OF RECORD (your shares are registered on the books of the Company via Computershare) | |||
Internet www.investorvote.com/coca-cola | Telephone Call 1-800-652-VOTE or the telephone number on your proxy card | Mail Sign, date and return your proxy card | |
BENEFICIAL OWNERS (your shares are held through your bank or brokerage account) | |||
Internet www.proxyvote.com | Telephone Call 1-800-454-8683 or the telephone number on your voting instruction form | Mail Sign, date and return your voting instruction form | |
Not all beneficial owners may vote at the web address and phone number provided above. If your control number is not recognized, please refer to your voting instruction form for specific voting instructions. |
IT IS VERY IMPORTANT THAT YOU VOTEto play a part in the future of the Company. Please carefully review the proxy materials for the 2020 Annual Meeting of Shareowners and follow the instructions above to cast your vote on all of the voting matters. We are making this Proxy Statement and the form of proxy first available on or about March 5, 2020. | March 5, 2020 By Order of the Board of Directors Jennifer D. Manning Associate General Counsel and Corporate Secretary |
2020 Proxy Statement 3
Record Date:Table of Contents
2 | Letter from our Chairman and Chief Executive Officer |
TheOn behalf of the Board of Directors set February 26, 2018 asand the record date for the meeting. This means that our shareowners as of the close of business on that date are entitled to receive this notice of the meeting and vote at the meeting and any adjournments or postponements of the meeting. On the record date, there were 4,264,499,492 shares of common stockleadership of The Coca-Cola Company, (the “Company”) issuedI want to thank you for your investment. It is my privilege to serve as Chairman and outstandingChief Executive Officer, and entitledI appreciate the responsibility and trust involved in helping shape this great business for continued success in the future.
In the 134 years since Coca-Cola was invented, the brand has grown and the Company has evolved enormously. Today, we offer more than 500 brands and more than 4,700 products, including reduced-sugar drinks and smaller packages. The speed of change we see today is, arguably, faster than ever. We’ve been on a continuous journey to voteevolve as a total beverage company – and I’d emphasize the word journey, because it is something that never ends.
While our portfolio has grown and diversified, especially in recent years, Trademark Coca-Cola remains at our core. This brand is one part of the consistency that has made us a great Company for so long.
REFRESH THE WORLD, MAKE A DIFFERENCE
The core purpose of The Coca-Cola Company is important to reiterate – we exist to refresh the world and make a difference. By operating this way, we’ve been successful as a system for more than a century and, along the way, we’ve continually created value for a broad and diverse group of stakeholders. This forms the foundation that allows us to generate strong returns for you, our shareowners.
We’ve spent a considerable amount of time lately reflecting on the purpose of our Company, especially in light of the rapid changes in the world around us. What we’ve learned is that the Company’s purpose remains unique. It’s why we exist, and it’s needed now, more than ever.
Our purpose is supported by a vision to craft brands that people love – brands that refresh them in body and spirit. We do this in ways that create a more sustainable business and a better shared future that makes a difference in people’s lives, communities and our planet.
We’re playing our part in seeking solutions to some of the world’s key challenges, including water and packaging waste. And we invest in people’s lives, from our employees to all those who touch our business system.
OUR PROGRESS IN 2019
When I reflect on the work of the Company leaders who came before us, I’m struck by how forward-thinking they were. Their long-term vision for the business was vital. We, too, are shaping The Coca-Cola Company not just for the quarters ahead but for years and decades down the road.
At the same time, we’re working to make progress every day. As I think back on 2019, it was a meaningful year in the evolution of our Company.
4 The Coca-Cola Company
LETTER FROM OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER2
People love Trademark Coca-Cola, and we’re doing more with the trademark than ever before. Coca-Cola Zero Sugar continued to grow in the double digits globally. Coca-Cola Orange Vanilla was our first new Trademark Coca-Cola flavor in 12 years. We expanded Coca-Cola with Coffee across more than 35 additional markets. We also introduced Coca-Cola Energy in more than 45 markets. Our approach with Coca-Cola Energy – to be fast, nimble and ready to make changes – stands out as an example of what we want to see from people across our Company. Not everything will work, but our growth mindset means we are agile and empowered. We’re taking action and trying new things.
In 2019, we also completed our acquisition of Costa Limited. We focused on working with the Costa team to develop a plan for disciplined growth. We introduced ready-to-drink Costa, and we expanded our footprint of Costa Express smart cafés. We also grew our on-premise offerings, all while working to ensure Costa’s retail outlets are in the best locations.
In addition, we acquired full ownership of C.H.I. Limited, an innovative, fast-growing leader in juices, value-added dairy and iced tea in West Africa. And, at the meeting.
Important Meeting Information:
beginning of 2020, we acquired the remaining stake in fairlife, LLC.
If you planCREATING SHARED VALUE
The idea of creating shared value is a powerful part of our culture. Our world is ever more interconnected and transparent. People expect us to attend the 2018 Annual Meeting in person, you must register in advance. See question 23 on page 94 for information about the location, format and how to register to attend the meeting.serve as leaders.
We will provide free admission to World of Coca-Cola to Annual Meeting attendees and other shareowners on April 25, 2018 (after the conclusion of the Annual Meeting). See question 28 on page 95 for how to gain admission.
Audiocast of the 2018 Annual Meeting:
If you are unable to attend the meeting in person, you can listen to a live audiocast of the meeting by visiting the 2018 Annual Meeting page of the Company’s website, atwww.coca-colacompany.com/investors/annual-meeting-of-shareowners. On the website, you can also vote through the Internet, access the proxy materials, submit questions in advance and learn more about our Company.
March 8, 2018
By Order of the Board of Directors
Jennifer D. Manning
Associate General Counsel and Secretary
Voting Information
It is very important that you vote in order to play a part in the future of the Company. Please carefully review the proxy materials for the 2018 Annual Meeting of Shareowners and follow the instructions below to cast your vote on all of the voting matters.
How to Vote: Please vote usingToday, this includes addressing one of the following advance voting methods.Make suregreat challenges of our era – the proliferation of packaging waste. Our World Without Waste strategy, which we introduced in 2018, is becoming fully embedded in how we do business. Our goal is to have your proxy cardcollect the equivalent of 100% of the bottles and cans we sell by 2030. We want to stop waste from entering the environment, and we also want to turn old bottles into new bottles or voting instruction form in handother useful items.
This is an important part of how we plan to reduce our carbon footprint. When plastic bottles are recycled and follow the instructions.
Not all beneficial owners may vote at the web address and phone number provided above. If your control number is not recognized, please referreused to your voting instruction form for specific voting instructions.
All shareowners of record may vote in person at the meeting. Beneficial owners may vote in person at the meeting ifmake new bottles, they have a legal proxy,lower carbon footprint than many other types of packaging. This addresses two significant goals – eliminating packaging waste and reducing carbon. These are core business priorities that are deeply ingrained in everything we do.
Our work in this space is one of many examples of how we’re working with a diverse group of stakeholders. This is one of my major roles as described in the response to question 10 on page 91.
This summary highlights information contained in the Proxy Statement. This summary does not contain allChairman and Chief Executive Officer of the information thatCompany, in partnership with my fellow Directors and leaders from across the Company. I thank them and appreciate their support.
Finally, let me close by thanking you should consider,again for your investment in and support of The Coca-Cola Company. I am glad you should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2017 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
Shareowners are being asked to vote on the following matters at the 2018 Annual Meeting of Shareowners:journey with us.
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● | In the United States, teamed with partners and major competitors to launch the “Every Bottle Back” program, which includes a new $100 million industry fund that will be used to improve sorting, processing and collection in areas with the biggest infrastructure gaps to help increase the amount of recycled plastic available to be remade into beverage bottles. |
2020 Proxy Statement 5
Maria Elena Lagomasino | Dear fellow shareowners: On behalf of our entire Board of Directors, I am pleased to present our annual Proxy Statement and report to you, our shareowners, on a variety of important issues. 2019 was a notable year for our Board, as we successfully completed a leadership succession plan. In April, James Quincey began serving as Chairman of the Board, in addition to serving as CEO, and I became your Lead Independent Director. I am pleased and honored to serve in this position. I, along with the entire Board, remain actively engaged with James in a partnership to ensure the Company is strategically positioned to successfully grow the business. One of my priorities as Lead Independent Director is to ensure the Board is comprised of Directors who are equipped to oversee the success of the business. I thank Sam Nunn, who was our Lead Independent Director before retiring from the Board last year. Sam established a foundation of robust Board refreshment processes, and today I believe we are a diverse, well-functioning Board comprised of capable Directors with the right mix of skills and experiences. Board refreshment is an ongoing process, and I will ensure that we continue to field the best Board possible. I am also prioritizing a focus on the Board’s processes and structures to ensure they remain effectively designed to help us meet our objectives. As we go about this work, it is informed by what we hear through engagement with shareowners. In late 2019, we instituted important changes to our Board committee structure, repositioning two of our key committees. The newly positioned Talent and Compensation Committee will assist the Board in its oversight of the Company’s policies and strategies relating to talent, leadership and culture, including diversity and inclusion. In addition, the Committee will continue to evaluate and approve compensation plans, policies and programs of the Company. The Public Policy and Sustainability Committee will now be primarily focused on oversight of the Company’s core sustainability and public policy work. The Committee will focus on public issues that may affect the Company’s business, its shareowners, the broader stakeholder community or the general public. |
6 The Coca-Cola Company
LETTER FROM OUR LEAD INDEPENDENT DIRECTOR ON BEHALF OF THE BOARD OF DIRECTORS3
As Lead Independent Director, I look forward to being the key point of contact at the Board level for our shareowners. We value the input shareowners provide throughout the year by the various means outlined in this Proxy Statement, and I commit to continuing those practices. |
These changes in committee scope reflect the strategic significance that talent, culture and sustainability have to our long-term success and further reflect the growing focus on environmental, social and governance issues by our investors and the broader stakeholder community.
As Lead Independent Director, I look forward to being the key point of contact at the Board level for our shareowners. We value the input shareowners provide throughout the year by the various means outlined in this Proxy Statement, and I commit to continuing those practices.
As always, we value your investment in this Company, and we appreciate the trust you place in us to oversee your interests in our business.
Sincerely,
Maria Elena Lagomasino
Lead Independent Director
We are committed to good corporate governance, which promotes the long-term interests of shareowners, strengthens Board and management accountability, and helps build public trust in the Company. The Governance section beginning onpage 1411describes our governance framework, which includes the following highlights:
BOARD PRACTICES
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10 of | |||
Demonstrated commitment to Board refreshment | |||
Robust Director nominee selection process | |||
Regular Board, committee and Director evaluations | |||
Annual election of Directors with majority voting standard | |||
| Lead Independent Director, elected by the independent Directors
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● | Independent Audit, Compensation and
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● | Regular executive sessions of non-employee Directors
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● | Strategy and risk oversight by full Board and committees |
SHAREOWNER MATTERS
Longstanding, active shareowner engagement | |
● | Annual “say on pay” advisory vote |
● | Majority voting with resignation policy for Directors in uncontested elections |
● | Proxy access right |
● | Shareowner right to call special meetings |
OTHER BEST PRACTICES
● | Longstanding commitment |
● | Board oversight of human capital management and culture, including diversity and inclusion |
● | Transparent public policy engagement |
● | Stock ownership guidelines for executives |
● | Anti-hedging, anti-short sale and anti-pledging policies |
2020 Proxy Statement 7
High integrity An appreciation of multiple cultures A commitment to sustainabilityThe Coca-Cola Company (the “Company”) is the world’s largest nonalcoholic beverage company. We own and social issues Innovative thinking A proven record of success Knowledge of corporate governance requirements and practices Our Director nominees exhibit an effective mix of skills, experience, diversity and fresh perspective 31% 0-2 years 19% 3-5 years 25% 6-10 years 25% Average Tenure 9.9 years Average Age 64.6 years Gender Diversity 31% women High Level of Financial Experience Diversity Innovation/Technology Experience Relevant Senior Leadership/Chief Executive Officer Experience Extensive Knowledge of the Company's Business and/or Industry Governmental or Geopolitical Expertise Broad International Exposure/Emerging Market Experience Marketing Experience Risk Oversight/Management Expertise
Name | Age | Director Since | Primary Occupation | Committee Memberships1 | Other Boards2 | ||||||
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Herbert A. Allen | 78 | 1982 | President, Chief Executive Officer and Director, |
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Ronald W. Allen* | 76 | 1991 | Former Chairman of the Board, President and |
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Marc Bolland* | 58 | 2015 | Head of European Portfolio Operations, |
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Ana Botín* | 57 | 2013 | Executive Chair, Banco Santander, S.A. |
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Richard M. Daley* | 75 | 2011 | Executive Chairman, Tur Partners LLC; Of Counsel, |
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Christopher C. Davis* | 52 | Nominee | Chairman, Davis Selected Advisers–NY, Inc. |
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Barry Diller* | 76 | 2002 | Chairman of the Board and Senior Executive, IAC/InterActiveCorp and Expedia, Inc. |
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Helene D. Gayle* | 62 | 2013 | Chief Executive Officer, The Chicago Community Trust |
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Alexis M. Herman* | 70 | 2007 | Chair and Chief Executive Officer, New Ventures LLC |
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Muhtar Kent | 65 | 2008 | Chairman of the Board, The Coca-Cola Company |
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Robert A. Kotick* | 55 | 2012 | Chief Executive Officer and Director, Activision Blizzard, Inc. |
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Maria Elena Lagomasino* | 68 | 2008 | Chief Executive Officer and Managing Partner, |
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Sam Nunn* | 79 | 1997 | Co-Chairman, Nuclear Threat Initiative |
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James Quincey | 53 | 2017 | President and Chief Executive Officer, The Coca-Cola Company |
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Caroline J. Tsay* | 36 | Nominee | Chief Executive Officer, Compute Software, Inc. | 4 |
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David B. Weinberg* | 66 | 2015 | Chairman and Chief Executive Officer, Judd Enterprises, Inc. |
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In 2017, we began transforming the culture of the organization to be more nimble and entrepreneurial. We made significant progress on our five strategic initiatives: accelerating growth of a leading consumer-centric brand portfolio; driving revenue growth; strengthening our system’s value creation advantage; digitizing the enterprise; and unlocking the power of our people.
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| Juice, dairy and plant-based beverages | Tea and coffee |
* | Schweppes is owned by the Company in certain countries other than the United States. |
The Coca-Cola System We are a global business that operates on a local scale, in every community where we do business. We are able to create global reach with local focus because of the strength of the Coca-Cola system, which comprises our Our Global Reach ●Our network of independent bottling partners, distributors, wholesalers and retailers, as well as Company-owned or -controlled bottling and distribution operations — isthe world’s largest nonalcoholic beverage distribution system. ●Consumers enjoy finished beverage products bearing trademarks owned by or licensed to usat a | LEARN MORE ABOUT OUR COMPANY You can learn more about the Company by visiting our website,www.coca-colacompany.com. We also encourage you to read our latest Annual Report on Form 10-K for the year ended December 31, 2019, available atwww.coca-colacompany.com/annual-meeting-of-shareowners. |
Our Platform for Sustained Performance
We have established a platform for sustained performance centered around disciplined portfolio growth; an aligned and engaged bottling system; and winning with our stakeholders – all supported by revenue growth management and brand-building initiatives. Underpinning our platform for sustained performance are three enablers: digitizing our enterprise; fostering a growth culture; and growing sustainably.
Strategic Priorities | Enablers | ||||
Disciplined Portfolio | Our strategy for disciplined portfolio growth centers around continuous innovation, leveraging the Coca-Cola system to lift, shift and scale leading brands around the world, and utilizing mergers and acquisitions as an enabler to further our growth strategy. | Digitizingthe | The digital evolution is changing consumers’ behaviors, influencing the way consumers think, interact and ultimately how they shop. We believe this evolution impacts every aspect of the Coca-Cola system, and creates an opportunity to partner in | ||
Alignedand Engaged | Over the past several years, we have undergone a tremendous transformation in refranchising the majority of our Company-owned bottling operations. Through the refranchising process, we have strengthened the system with great partners who are committed to excellence in the markets that they serve. These partners are strategically aligned to execute and support the vision and are creating sustainable long-term value for the system. | Fosteringa Growth
| We believe that sustainable and profitable growth is the product of a strong culture, with a focus on
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Winningwithour
| We believe that our success is dependent upon empowering our employees, satisfying consumers with a wide variety of | Growing Sustainably | We are focused on giving people the drinks they want while trying to improve the world we all share, turning our passion for consumers into brands people love and creating shared opportunity through growth. We act in ways that we believe will create a more sustainable and better shared future for all of our stakeholders. We attempt to make a positive difference in peoples’ lives, communities and our planet by doing business the right way. |
Operating Results8 The Coca-Cola Company
ABOUT THE COCA-COLA COMPANY4
2019 Performance Highlights
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Note: Organic revenues is a non-GAAP financial measure that excludes or has otherwise been adjusted for the impact of acquisitions, divestitures and structural items,changes, as applicable, as well asand the impact of changes in foreign currency exchange rates. Comparable currency neutral operating income from continuing operations before income taxes (structurally adjusted) is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability and the impact of changes in foreign currency exchange rates,rates. Comparable EPS is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability. Free cash flow is a non-GAAP financial measure that represents net cash provided by operating activities less purchases of property, plant and the impact of structural changes.equipment. SeeAnnex Cfor a reconciliation of non-GAAP financial measures to our results as reported under accounting principles generally accepted in the U.S.United States (“GAAP”).
ReturnRefreshing the World and Making a Difference with Our Employees
We believe people are our most important asset. Our people and culture agendas are critical business priorities, and we strive to Shareownersbe a global employer of choice that attracts high-performing talent with the passion, skills and mindsets to drive us on our journey to refresh the world and make a difference. We are committed to building an inclusive culture that inspires and supports the growth of our employees, serves our communities and shapes a more sustainable business.
OUR HUMAN CAPITAL PILLARS
Culture and Engagement We are taking deliberate action to foster a growth culture that is grounded in our Company purpose: to refresh the world and make a difference. We strive to act with a growth mindset, take an expansive approach to what’s possible and believe in continuous learning to improve our business and ourselves. We focus on four key growth behaviors – being curious, empowered, inclusive and agile – and value how we work as much as what we achieve. We believe culture enables our Company strategy and shapes employee experiences. | ||
Leadership, Talent and Development | ||
Diversity and Inclusion | ||
Human Rights | ||
Business Integrity |
2019 NOTABLEACCOLADES | |||
●Ranked 15thon FORTUNE’s annual ranking of theWorld’s Most Admired Companies, marking the 12thconsecutive year in the top 20 ●Earned a 100% score on theHuman Rights Campaign’s Corporate Equality Index, marking the 14thconsecutive year ●Ranked intop ten largest U.S. companies in terms of gender equalityby Equileap ●Included in theBloomberg Gender-Equality Index ●Recognized by Disability Equality Index as one of theBest Places to Work for Disability Inclusion ●Received theHispanic Association on Corporate Responsibility Award for Corporate Inclusionfor two five-star ratings in employment and governance ●Winner offour Human Capital Management Excellence Awardsby Brandon Hall Group | |||
Return to Shareowners TOTAL SHAREOWNER RETURN1 103% Our Sustainable Business Priorities
Sugar Reduction | World Without Waste | Climate | Shared Future | Water Stewardship | ||||
We’re growing our business while reducing added sugar and providing consumers with more choices. | We believe a World Without Waste is possible. | We look for ways to reduce our carbon footprint across the Coca-Cola value chain. | We aim to improve people’s lives and create a better shared future for our communities and planet. | We strive to replenish water back to nature and communities, improve efficiency and treat wastewater to high standards. |
2020 Proxy Statement 9
5 | Voting Roadmap |
ITEM | ELECTION OF DIRECTORS The Board of Directors and the Committee on Directors and Corporate Governance believe that the 12 Director nominees possess the necessary qualifications and experiences to provide quality advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of shareowners. |
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Seepage 11for further information |
ITEM | ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION The Company seeks a non-binding advisory vote to approve the compensation of its Named Executive Officers as described in the Compensation Discussion and Analysis beginning onpage 46and the Compensation Tables beginning onpage 69. |
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Seepage 45for further information |
ITEM | RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS The Board of Directors and the Audit Committee believe that retention of Ernst & Young LLP to serve as the Independent Auditors for the fiscal year ending December 31, 2020 is in the best interest of the Company and its shareowners. As a matter of good corporate governance, shareowners are being asked to ratify the Audit Committee’s selection of the Independent Auditors. |
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Seepage 90for further information |
ITEM | SHAREOWNER PROPOSAL Vote on a shareowner proposal on sugar and public health, if properly presented at the 2020 Annual Meeting of Shareowners. |
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Seepage 93for further information |
10 yr 2008-2017 48% 5 yr 2013-2017 20% 3 yr 2015-2017 14% 1 yr 2017 Comparison of Five-Year Cumulative Total Shareowner Return3 In $ 50 100 150 200 250 $148 $208 $168 12/2012 12/2013 12/2014 12/2015 12/2016 12/2017 The Coca-Cola Company (KO) Comparator Group S&P 500 Index in Net Share Repurchases in Dividends 2017 $6.3B $8.3 billion RETURNED TO SHAREOWNERS $2.0B2
Cumulative stock price appreciation plus dividends, with dividends reinvested quarterly.
Net share repurchases is a non-GAAP financial measure that reflects the net amountTable of purchases of stock for treasury after considering proceeds from the issuances of stock, the net change in stock issuance receivables (related to employee stock options exercised but not settled prior to the end of the year) and the net change in treasury stock payables (for treasury shares repurchased but not settled prior to the end of the year). See Annex C for a reconciliation of non-GAAP financial measures to our results as reported under GAAP.Contents
Source: FactSet Research Systems Inc. This chart shows how a $100 investment in the Company’s Common Stock on December 31, 2012, would have grown to $148 on December 31, 2017, with dividends reinvested quarterly. The chart also compares the total shareowner return on the Company’s Common Stock to the same investment in the S&P 500 Index and the Company’s 2017 compensation comparator group (see page 61) over the same period, with dividends reinvested quarterly. Includes the Company’s 2017 compensation comparator group for the five-year period whether or not a company was included in the group for the entire period. For foreign companies included in the comparator group, market value has been converted to U.S. dollars and excludes the impact of currency. Market returns are weighted by relative market capitalization and are adjusted for spin-offs and special dividends.
6 | Governance |
ITEM 1 | ELECTION OF DIRECTORS |
Shareowners are being asked to elect 12 Director nominees for a one-year term. | VOTING RECOMMENDATION: FORthe election of each Director nominee. The Board of Directors and the Committee on Directors and Corporate Governance believe the 12 Director nominees possess the necessary qualifications and experiences to provide quality advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of shareowners. |
KEY LINKAGES BETWEEN PAY AND PERFORMANCE
In the context of our compensation programs, we assess Company performance in two primary ways:
the Company’s operating performance, including results against long-term growth targets; and
return to shareowners over time, both on an absolute basis and relative to other companies.
In addition to Company performance, we evaluate individual performance when making compensation decisions.
Our compensation plans are designed to link pay and performance. As reflected above, 2017 was a pivotal year for the Company as we executed our leadership succession plan and transitioned to a new Chief Executive Officer, made progress on transforming the culture of our organization and announced changes to our talent and compensation philosophy. As we continued to evolve into a total beverage company, the Company achieved or exceeded its full-year guidance and accomplished major milestones in strengthening the system and returning to a capital-light organization, including a fully refranchised bottling system in the U.S.
When evaluating pay reported in the 2017 Summary Compensation Table against Company performance, it is important to consider the timing of compensation decisions and which performance period informs each of the annual and long-term incentive awards. For instance:
annual incentive awards reported for 2017 were decided in February 2018 and reflect Company and individual performance in 2017 (see page 56); and
long-term incentive awards reported for 2017 were granted in February 2017 and reflect Company and individual performance in 2016 (see page 57).
The following highlights linkages between pay and Company performance over the last four years:
Annual Incentives Driven by Company Performance in a Single Year Performance Share Units Reflect Company Performance Over a Three-Year Period Performance Share Unit (PSU) Payouts Linked to Key Metrics over Three-Year Performance Period Last Four PSU Performance Periods* Certified: 2 Below Threshold 2 Above Target * 2012-2014, 2013-2015, 2014-2016 and 2015-2017. See page 58 for metrics, targets and status of outstanding annual PSU programs. Annual Incentive Payouts* Linked to Key Metrics for Performance Year** 2014 2015 2016 2017 80% 111% 84% 66% * Does not include individual performance amounts (see page 56). ** See page 56 for 2017 metrics, targets and results. Metrics, targets and results for the 2016, 2015 and 2014 annual incentives can be found in the 2017, 2016 and 2015 proxy statements, respectively, previously filed with the Securities and Exchange Commission.
COMPENSATION PROGRAM ENHANCEMENTS FOR 2018
We continue to make important enhancements to our compensation programs to continue to strengthen the link between compensation and the Company’s growth and talent strategies as well as the long-term interests of our shareowners. Over the last year, the Company focused on designing refreshed compensation programs for 2018 and thereafter. We:
Revised the annual incentive plan so that a percentage of all participants’ awards will be based on total Company results.
Refined performance metrics for the annual incentive plan to better align with our growth strategy, focusing on net operating revenue and operating income and no longer including unit case volume.
Retained the relative total shareowner return modifier to performance-based equity compensation awards for executives to further tie awards to long-term shareowner value.
Refined performance metrics for performance-based equity compensation, focusing on net operating revenue, earnings per share and free cash flow.
Reduced the maximum payout for the executive annual incentive plan from 250% to 200% for 2018 and thereafter.
Introduced scorecards for our most senior leaders that identify the categories on which they will be assessed.
Added minimum threshold amounts to performance metrics that must be achieved in order for an executive to receive a payout from the annual incentive plan.
Set forth below is the 2017 compensation for each Named Executive Officer as determined under Securities and Exchange Commission (“SEC”) rules. See the 2017 Summary Compensation Table and the accompanying notes to the table beginning on page 65 for more information.
In order to show the effect that the year-over-year change in pension value had on total compensation, as determined under applicable SEC rules, we have included an additional column to show total compensation minus the change in pension value. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column required under SEC rules and are not a substitute for total compensation.
Name and Principal Position | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- qualified Deferred Compensation Earnings1 ($) | All Other Compensation ($) | Total ($) | Total Without Change in Pension Value2 ($) |
Muhtar Kent3 Chairman of the Board and Former Chief Executive Officer | $ 1,200,000 | $ 6,813,726 | $ 1,920,772 | $ 1,800,000 | $ 2,368,071 | $ 689,870 | $ 14,792,439 | $ 12,424,368 |
James Quincey4 President and Chief Executive Officer | 1,177,167 | 4,769,612 | 1,344,540 | 2,368,493 | 392,126 | 530,292 | 10,582,230 | 10,190,104 |
Kathy N. Waller5 Executive Vice President, | 818,287 | 2,205,955 | 621,851 | 956,250 | 1,760,981 | 81,162 | 6,444,486 | 4,683,505 |
Marcos de Quinto6 Former Executive Vice President and Chief Marketing Officer | 784,088 | 2,416,038 | 681,074 | 573,566 | 504,246 | 1,629,411 | 6,588,423 | 6,084,177 |
J. Alexander M. Douglas, Jr.7 Executive Vice President and President, Coca-Cola North America | 723,445 | 1,873,768 | 528,214 | 723,445 | 845,431 | 79,997 | 4,774,300 | 3,928,869 |
Irial Finan8 Executive Vice President and President, Bottling Investments Group | 914,769 | 2,697,124 | 760,303 | 1,097,723 | 463,763 | 84,819 | 6,018,501 | 5,554,738 |
Brian J. Smith President, Europe, Middle East and Africa Group | 650,000 | 1,873,768 | 528,214 | 731,250 | 445,128 | 153,550 | 4,381,910 | 3,936,782 |
1 Pension values may fluctuate significantly from year to year depending on a number of factors, including age, years of service, average annual earnings and the assumptions used to determine the present value, such as the discount rate. For 2017, the discount rate assumption used to determine the actuarial present value of accumulated pension benefits, as required by SEC rules, was lower than in 2016. For Mr. Kent, this lower discount rate assumption was a significant reason for the increase in pension value. 2 Total Without Change in Pension Value represents total compensation, as determined under applicable SEC rules, minus the change in pension value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column (but including the nonqualified deferred compensation earnings reported in that column, if any). 3 In addition to serving as Chairman of the Board, Mr. Kent served as Chief Executive Officer through April 30, 2017. 4 Mr. Quincey served as President and Chief Operating Officer through April 30, 2017. Mr. Quincey succeeded Mr. Kent as Chief Executive Officer effective May 1, 2017. 5 In addition to serving as Executive Vice President and Chief Financial Officer, Ms. Waller assumed the role of President, Enabling Services effective May 1, 2017. 6 Mr. de Quinto will be retiring from the Company on August 31, 2018. Mr. de Quinto served as Executive Vice President and Chief Marketing Officer through April 30, 2017, when he transitioned to Senior Creative Advisor. 7 Mr. Douglas retired from the Company on March 1, 2018. 8 Mr. Finan will be retiring from the Company on March 31, 2018. |
Please see Questions and Answers in Annex A beginning on page 89 for important information about the proxy materials, voting, the 2018 Annual Meeting, Company documents, communications and the deadlines to submit shareowner proposals and Director nominees for the 2019 Annual Meeting of Shareowners. Additional questions may be directed to Shareowner Services at (404) 676-2777 or shareownerservices@coca-cola.com.
You can learn more about the Company by visiting our website, www.coca-colacompany.com. Please also visit our 2018 Annual Meeting website, www.coca-colacompany.com/investors/annual-meeting-of-shareowners, to easily access the Company’s interactive proxy materials, vote through the Internet, submit questions in advance of the 2018 Annual Meeting of Shareowners, register to attend the 2018 Annual Meeting, access the live audiocast of the meeting and learn more about free admission to World of Coca-Cola on April 25, 2018.
ONE COCA-COLA PLAZAATLANTA, GEORGIA 30313
MARCH 8, 2018
The Board of Directors (the “Board”) of The Coca-Cola Company (the “Company”)currently has 13 members. Ronald W. Allen is furnishing you this Proxy Statement to solicit proxies on its behalf to be voted atnot standing for reelection and will retire from the 2018Board immediately following the 2020 Annual Meeting of Shareowners of The Coca-Cola Company. The meeting will be held(the “2020 Annual Meeting”), at World of Coca-Cola, 121 Baker Street NW, Atlanta, Georgia 30313 on April 25, 2018, at 8:30 a.m., local time. The proxies also may be voted at any adjournments or postponements ofwhich time the meeting.
The mailing address of our principal executive office is The Coca-Cola Company, P.O. Box 1734, Atlanta, Georgia 30301. We are first furnishing the proxy materials to shareowners on March 8, 2018.
All properly executed written proxies and all properly completed proxies submitted by telephone or Internet that are delivered pursuant to this solicitation will be voted at the meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting.
Only owners of record of shares of common stock of the Company (“Common Stock”) as of the close of business on February 26, 2018, the record date, are entitled to notice of, and to vote at, the meeting or at any adjournments or postponements of the meeting. Each owner of record on the record date is entitled to one vote for each share of Common Stock held by such shareowner. On February 26, 2018, there were 4,264,499,492 shares of Common Stock issued and outstanding.
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“I continue to be pleased with whatthis Board is accomplishing inworking with management towardthe common goal of long-term valuecreation for our shareowners.”
In our ongoing role overseeing the Company’s long-term business strategy, our Board continued giving overall guidance for the Company’s business transformation to a total beverage company.
For our Board, the most important part of the business transformation is ensuring an orderly and seamless management succession. In December 2016, we announced our intention to have James Quincey succeed Muhtar Kent as CEO. This change took place on May 1, 2017. The Board’s confidence in James as the Company’s long-term leader has been continually reinforced, as has our confidence in the very capable management team James has put in place.
We continue to believe that in order to do our jobs effectively as Directors, we must understand what our shareowners think. Through our year-round shareowner engagement program, we spend a great deal of time discussing the feedback received from shareowners about an array of issues. Over the years our Board has maintained a commitment to good governance practices, and we have made significant progress against key benchmarks that our investors have indicated are important to them. Some of these include the annual “say on pay” advisory vote; a robust director evaluation process; a proxy access right; a shareowner right to call special meetings and a long-standing commitment and focus on sustainability tied to our business strategy.
Perhaps one of the most important governance exercises we undertake is ensuring that this Board is comprised of high-integrity, highly capable Directors, equipped to oversee the business and represent the interests of shareowners. We are proud of our Board. We are a well-functioning group of Directors who possess the right mix of perspectives, skills and experiences to work closely with management to help this business succeed. We are pleased to nominate two outstanding new Director candidates for election at the upcoming April meeting: Caroline Tsay and Christopher Davis.
As we think about Board composition, the factors and variables we consider are many. We have had a particular focus on gender diversity. Women make up 31% of our Board nominees, and two women are chairs of two important committees. Muhtar, the restsize of the Board and I are committedwill be reduced to continuing to increase these numbers.
Finally, we assure you, our shareowners, that we will continue to seek feedback and make every effort to effectively represent your interests. Our goal is to give shareowners a better line12 members. Upon the recommendation of sight into the boardroom and input into the decisions we make.
Thank you for your support and for your interest and investment in this Company.
Sam Nunn
What am I voting on?
Shareowners are being asked to elect 16 Director nominees for a one-year term.
Voting recommendation:
FOR the election of each Director nominee. The Board and the Committee on Directors and Corporate Governance, believe the 16Board has nominated each of the remaining 12 Directors for election at the 2020 Annual Meeting. All nominees are independent under the New York Stock Exchange (“NYSE”) corporate governance rules, except Herbert A. Allen and James Quincey (see Director Independence and Related Person Transactions beginning onpage 39).
Each of the Director nominees possesswere elected by the necessary qualificationsshareowners at the 2019 Annual Meeting of Shareowners. If elected, each nominee will hold office until the 2021 Annual Meeting of Shareowners and experiencesuntil his or her successor is elected and qualified. We have no reason to provide quality advice and counselbelieve that any of the nominees will be unable or unwilling to the Company’s management and effectively oversee the business and the long-term interests of shareowners.
Board Composition and Refreshment
Ensuringserve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, is composed of Directors who bring diverse viewpoints and perspectives, exhibit a variety of skills, professional experience and backgrounds, and effectively represent the long-term interests of shareowners, is a top priority ofor the Board andmay reduce the Committee on Directors and Corporate Governance. number of Directors.
Board Membership Criteria
The Board and the Committee on Directors and Corporate Governance believe that new perspectives and ideas are critical to a forward-looking and strategic Board as is the ability to benefit from the valuable experience and familiarity that longer-serving Directors bring.
When recommending to the Board the slate of Director nominees for election at the Annual Meeting of Shareowners, the Committee on Directors and Corporate Governance strives to maintain an appropriate balance of tenure, turnover, diversity and skills on the Board. The Committee focuses on this through an ongoing, year-round process, which includes the annual Board evaluation process described below.
The Board and the Committee on Directors and Corporate Governance believe there are general qualifications that all Directors must exhibit and other key qualifications and experienceexperiences that should be represented on the Board as a whole but not necessarily by each individual Director.
Qualifications Required of All DirectorsQUALIFICATIONS REQUIRED OF ALL DIRECTORS
The Board and the Committee on Directors and Corporate Governance require that each Director be a recognized person of high integrity with a proven record of success in his or her field and have the abilitybe able to devote the time and effort necessary to fulfill his or her responsibilities to the Company. Each Director must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, an appreciation of multiple cultures and a commitment to sustainability and to dealing responsibly with social issues. In addition, the Board conducts interviews of potential Director candidates are interviewed to assess intangible qualities, including the individual’s ability to ask difficult questions and, simultaneously, to work collegially.
CONSIDERATION OF DIVERSITY | |
The Board does not have a specific diversity policy but fully appreciates the value of Board diversity. Diversity is important because having a variety of points of view improves the quality of dialogue, contributes to a more effective decision-making process and enhances overall culture in the boardroom. In evaluating candidates for Board membership, the Board and the Committee on Directors and Corporate Governance consider many factors based on the specific needs of the business and what is in the best interests of the Company’s shareowners. This includes diversity of professional experience, race, ethnicity, gender, age and cultural background. In addition, the Board and the Committee on Directors and Corporate Governance focus on how the experiences and skill sets of each Director nominee complement those of fellow Director nominees to create a balanced Board with diverse viewpoints and deep expertise. |
The Board does not have a specific diversity policy, but considers diversity2020 Proxy Statement 11
6 GOVERNANCEItem 1 Election of points of view contribute to a more effective decision-making process. When recommending Director nominees for election by shareowners, the Board and the Committee on Directors and Corporate Governance focus on how the experience and skill set of each Director nominee complements those of fellow Director nominees to create a balanced Board with diverse viewpoints and deep expertise.
Key Qualifications and Experience to be Represented on the BoardKEY QUALIFICATIONS AND EXPERIENCES TO BE REPRESENTED ON THE BOARD
The Board has identified key qualifications and experienceexperiences that are important to be represented on the Board as a whole, in light of the Company’s business strategy and expected future business needs. The table below summarizes how these key qualifications and experienceexperiences are linked to our Company’s business.
Board EvaluationDirector Nomination Process
The Board recognizes that a robust and constructive evaluation process is an essential component of good corporate governance and Board effectiveness. Through this process, Directors provide feedback and assess Board, committee and Director performance, including areas where the Board believes it is functioning effectively and areas where the Board believes it can improve.
Evaluation Components – Board, Committees, Directors
Under the leadership of the Lead Independent Director, the Committee on Directors and Corporate Governance oversees the Board’s annual evaluation process focused on three components: (1) the Board, (2) Board committees and (3) individual Directors. In addition, the Committee on Directors and Corporate Governance regularly discusses Board composition and effectiveness during its committee meetings.
The Committee on Directors and Corporate Governance periodically reviews the format of the evaluation process, including whether to utilize a third-party facilitator, to ensure that actionable feedback is solicited on the operation and effectiveness of the Board, Board committees and Director performance. In 2017, the evaluation process included the steps described below:
Questionnaire Directors provide feedback regarding: •Board composition and structure •Meetings and materials •Board interaction with management •Effectiveness of the Board Committee Chairs Meet Committee chairs meet to provide feedback and input prior to the annual Board closed selfevaluation sessions. One-on-One Discussions with Lead Independent Director The Lead Independent Director conducts separate one-on-one sessions with each Director to review the results of the questionnaire, as well as to discuss any additional feedback or perspectives. Committee/Board Closed Sessions Each committee and the full Board conduct separate closed selfassessment sessions. The results of the questionnaire, the Lead Independent Director sessions, the committee self-assessments and other feedback are discussed by the Board. Feedback Incorporated Based on evaluation results, changes in practices or procedures are considered and implemented, as appropriate.
Our multi-step evaluation process generates robust comments and discussion at all levels of the Board, including with respect to Board composition and processes. These evaluation results have led to changes designed to increase Board effectiveness and efficiency. For example, over the last few years, enhancements have been made regarding meeting materials, the structure of the Board, committee and executive session discussions, the Board evaluation process and providing Directors with more opportunities for continuing education and to have hands-on experiences with our business, senior leaders and emerging talent around the world.
Director Nominee Selection Process
The Committee on Directors and Corporate Governance is responsible for recommending to the Board a slate of nominees for election at each Annual Meeting of Shareowners. Nominees may be suggested by Directors, members of management, shareowners or, in some cases, by a third-party firm.
The Committee on Directors and Corporate Governance considers a wide range of factors when assessing potential Director nominees. This assessment includes a review of the potential nominee’s judgment, experience,experiences, independence, understanding of the Company’s business or other related industries and such other factors as the Committee concludes are pertinent in light of the current needs of the Board. A potential nominee’s qualifications are considered to determine whether they meet the qualifications required of all Directors and the key qualifications and experience
12 The Coca-Cola Company
Item 1 Election of Directors GOVERNANCE 6
experiences to be represented on the Board, as described above. Further, the Committee on Directors and Corporate Governance assesses how each potential nominee would impact the skills and experienceexperiences represented on the Board as a whole in the context of the Board’s overall composition and the Company’s current and future needs.
Shareowner-RecommendedBOARD COMPOSITION AND REFRESHMENT
When recommending to the Board the slate of Director Candidatesnominees for election at the Annual Meeting of Shareowners, the Committee on Directors and Corporate Governance strives to maintain an appropriate balance of tenure, turnover, diversity and skills on the Board.
The Board believes that refreshment, including periodic committee rotation, is important to help ensure that Board composition is aligned with the needs of the Company and the Board as our business evolves over time, and that fresh viewpoints and perspectives are regularly considered. The Board also believes that over time Directors develop an understanding of the Company and an ability to work effectively as a group. Because this provides significant value, a degree of continuity year-over-year is beneficial to shareowners and generally should be expected.
Directors are elected each year, at the Annual Meeting of Shareowners, to hold office until the next Annual Meeting of Shareowners and until their successors are elected and qualified. Because term limits could cause the loss of experience or expertise important to the optimal operation of the Board, there are no absolute limits on the length of time that a Director may serve, but the Committee on Directors and Corporate Governance and the Board consider the tenure of Directors as one of several factors in nomination decisions. In addition, the Committee on Directors and Corporate Governance evaluates the qualifications and performance of each incumbent Director before recommending the nomination of that Director for an additional term. Furthermore, pursuant to our Corporate Governance Guidelines, Directors whose job responsibilities change or who reach the age of 74 are asked to submit a letter of resignation to the Board. These letters are considered by the Board and, if applicable, annually thereafter. In 2019, the Committee on Directors and Corporate Governance reviewed the Director nominees who were 74 years of age or older and determined to recommend them for reelection based on their skills, qualifications and experiences.
SHAREOWNER-RECOMMENDED DIRECTOR CANDIDATES
Shareowners who would like the Committee on Directors and Corporate Governance to consider their recommendations for nominees for the position of Director should submit their recommendations in writing by mail to the Committee on Directors and Corporate Governance in care of the Office of the Secretary, The Coca-Cola Company, P.O. Box 1734, Atlanta, Georgia 30301 or by e-mail toasktheboard@coca-cola.com. Recommendations by shareowners that are made in accordance with these procedures will receive the same consideration by the Committee on Directors and Corporate Governance as other suggested nominees.
Shareowner-Nominated Director CandidatesSHAREOWNER-NOMINATED DIRECTOR CANDIDATES
In 2015, our Board adoptedWe have a “Proxy Access for Director Nominations” bylaw after engaging with a number of our shareowners to understand their views on the desirability of proxy access and the appropriate proxy access structure for the Company.bylaw. The proxy access bylaw permits a shareowner, or a group of up to 20 shareowners, owning 3% or more of the Company’s outstanding Common Stock continuously for at least three years to nominate and include in the Company’s proxy materials Director nominees constituting up to two individuals or 20% of the Board (whichever is greater), provided that the shareowner(s) and the nominee(s) satisfy the requirements specified in Article I, Section 12 of our By-Laws. See question 33 onpage 97103for more information.
Annual Elections of Directors; Majority Voting Standard
Directors are elected each year, at the Annual Meeting of Shareowners, to hold office until the next annual meeting and until their successors are elected and qualified. Because term limits may cause the loss of experience and expertise important to the optimal operation of the Board, there are no limits on the number of terms a Director may serve. However, the Committee on Directors and Corporate Governance evaluates the qualifications and performance of each incumbent Director before recommending the nomination of that Director for an additional term.
In addition, pursuant to our Corporate Governance Guidelines, Directors whose job responsibilities change or who reach the age of 74 are asked to submit a letter of resignation to the Board. These letters are considered by the Board and, if applicable, annually thereafter.MAJORITY VOTING STANDARD
Our By-Laws provide that, in an election of Directors where the number of nominees does not exceed the number of Directors to be elected, each Director must receive the majority of the votes cast with respect to that Director. If a Director does not receive a majority vote, he or she has agreed that he or she would submit a letter of resignation to the Board. The Committee on Directors and Corporate Governance would make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board would act on the resignation taking into account the recommendation of the Committee on Directors and Corporate Governance, which would include consideration of the vote and any relevant input from shareowners. The Board would publicly disclose its decision and its rationale within 100 days of the certification of the election results. The Director who tenders his or her resignation would not participate in the decisions of the Committee on Directors and Corporate Governance or the Board that concern the resignation.
2020 Proxy Statement 13
6 GOVERNANCEItem 1 Election of Directors
Our 2020 Director Nominees
Years of Tenure | Committee Memberships | Other Boards1 | |||||||||
Nominee | Age | A | TC | DCG | F | MD | PPS | E | |||
HERBERT A. ALLEN President, Chief Executive Officer and Director, Allen & Company Incorporated | 80 | 38 | 0 | ||||||||
MARC BOLLANDIndependent Head of European Portfolio Operations, The Blackstone Group Inc. | 60 | 5 | 2 | ||||||||
ANA BOTÍNIndependent Executive Chair, Banco Santander, S.A. | 59 | 7 | 32 | ||||||||
CHRISTOPHER C. DAVISIndependent Chairman, Davis Selected Advisers–NY, Inc. | 54 | 2 | 43 | ||||||||
BARRY DILLERIndependent Chairman of the Board and Senior Executive, IAC/InterActiveCorp and Expedia Group, Inc. | 78 | 18 | 2 | ||||||||
HELENE D. GAYLEIndependent Chief Executive Officer, The Chicago Community Trust | 64 | 7 | 1 | ||||||||
ALEXIS M. HERMANIndependent Chair and Chief Executive Officer, New Ventures LLC | 72 | 13 | 3 | ||||||||
ROBERT A. KOTICKIndependent Chief Executive Officer and Director, Activision Blizzard, Inc. | 57 | 8 | 1 | ||||||||
MARIA ELENA LAGOMASINO Lead Independent Director Chief Executive Officer and Managing Partner, WE Family Offices | 70 | 12 | 1 | ||||||||
JAMES QUINCEY Chairman and Chief Executive Officer, The Coca-Cola Company | 55 | 3 | 1 | ||||||||
CAROLINE J. TSAYIndependent Chief Executive Officer and Director, Compute Software, Inc. | 38 | 2 | 1 | ||||||||
DAVID B. WEINBERGIndependent Chairman and Chief Executive Officer, Judd Enterprises, Inc. | 68 | 5 | 0 |
AAudit Committee TCTalent and Compensation Committee DCGCommittee on Directors and Corporate Governance | FFinance Committee MDManagement Development Committee PPSPublic Policy and Sustainability Committee | EExecutive Committee | Chair Member | Chair (following the 2020 Annual Meeting) | |
Member (following the 2020 Annual Meeting) |
1 | Other public company boards. |
2 | Includes Santander UK Group Holdings plc and Santander UK plc, which are wholly owned subsidiaries of Banco Santander, S.A. |
3 | Includes investment company directorships in Selected Funds, Davis Funds and Clipper Funds Trust, three fund complexes which are advised by Davis Selected Advisers, L.P. and other entities controlled by Davis Selected Advisers, L.P. |
4 | Ronald W. Allen will remain as Audit Committee Chair through the 2020 Annual Meeting. |
14 The Coca-Cola Company
Item 1 Election of Directors GOVERNANCE 6
Snapshot of 2020 Director Nominees
OUR DIRECTOR NOMINEES EXHIBIT AN EFFECTIVE MIX OF SKILLS, EXPERIENCES, DIVERSITY AND FRESH PERSPECTIVES
ALL DIRECTOR NOMINEES EXHIBIT:
●High integrity ●An appreciation of multiple cultures | ●A commitment to sustainability and social issues ●Innovative thinking | ●A proven record of success ●Knowledge of corporate governance requirements and practices |
SKILLS | |||||||
12out of 12 High Level of Financial Experience | 8out of 12 Marketing Experience | 12out of 12 Relevant Senior Leadership/Chief Executive Officer Experience | 7out of 12 Governmental or Geopolitical Expertise | ||||
Risk Oversight/Management Expertise | 6out of 12 | 9out of 12 Broad International Exposure/Emerging Market Experience | 4out of 12 Extensive Knowledge of the Company’s Business and/or Industry |
Our By-Laws provide that the number of Directors shall be determined by the Board, which has set the number at 16. Upon the recommendation of the Committee on Directors and Corporate Governance, the Board has nominated each of Herbert A. Allen, Ronald W. Allen, Marc Bolland, Ana Botín, Richard M. Daley, Christopher C. Davis, Barry Diller, Helene D. Gayle, Alexis M. Herman, Muhtar Kent, Robert A. Kotick, Maria Elena Lagomasino, Sam Nunn, James Quincey, Caroline J. Tsay and David B. Weinberg for election as a Director. All of the nominees are independent under New York Stock Exchange (“NYSE”) corporate governance rules, except Herbert A. Allen, Muhtar Kent and James Quincey. See Director Independence and Related Person Transactions beginning on page 38.
Each of the Director nominees currently serves on the Board and was elected by the shareowners at the 2017 Annual Meeting of Shareowners, except for Ms. Tsay and Mr. Davis, each of whom was nominated by the Board in February 2018 to stand for election at the 2018 Annual Meeting of Shareowners. Ms. Tsay and Mr. Davis were identified as potential Directors by the Committee on Directors and Corporate Governance, who determined that each was qualified under the Committee’s criteria. If elected, each nominee will hold office until the 2019 Annual Meeting of Shareowners and until his or her successor is elected and qualified. We have no reason to believe that any of the nominees will be unable or unwilling to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of Directors.
Included in each Director nominee’s biography belowthat follows is a description of selectthe five key qualifications and experienceexperiences of such nominee based onnominee. Many of our Director nominees have more than five qualifications, and the qualifications describedaggregate number for all Director nominees is reflected above. The Board and the Committee on Directors and Corporate Governance believe that the combination of the various qualifications and experiences of the Director nominees would contribute to an effective and well-functioning Board and that, individually and as a whole, the Director nominees possess the necessary qualifications to provide effective oversight of the business and quality advice and counsel to the Company’s management.
The Board2020 Proxy Statement 15
Table of Directors recommends a vote Contents
FOR6 the election GOVERNANCEItem 1 Election of each of the Director nominees.
Directors
High integrity An appreciation of multiple cultures A commitment to sustainability and social issues Innovative thinking A proven record of success Knowledge of corporate governance requirements and practices Our Director nominees exhibit an effective mix of skills, experience, diversity and fresh perspective 31% 0-2 years 19% 3-5 years 25% 6-10 years 25% Average Tenure 9.9 years Average Age 64.6 years Gender Diversity 31% women High Level of Financial Experience Diversity Innovation/Technology Experience Relevant Senior Leadership/Chief Executive Officer Experience Extensive Knowledge of the Company's Business and/or Industry Governmental or Geopolitical Expertise Broad International Exposure/Emerging Market Experience Marketing Experience Risk Oversight/Management Expertise
Herbert A. Allen Age:80 Director since:1982 Board Committees: ●Finance ●Management Development (Chair) ●Executive PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: None Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●Allen ○Since 1966 President, Chief Executive Officer and ●Convera Corporation, ○2000 to | 2009Director
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KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceExtensive experience in venture capital, underwriting, mergers and acquisitions, private placements and money management services at Allen & Company Incorporated. Supervises Allen & Company Incorporated’s principal financial and accounting officers on all matters related to the firm’s financial position and results of operations and the presentation of its financial statements. | ||
Relevant Senior Leadership/Chief Executive Officer ExperiencePresident and Chief Executive Officer of Allen & Company | ||
Marketing ExperienceSignificant marketing experience through ownership of a controlling interest and management of Columbia Pictures from 1973 to 1982 and through a nine-year public company directorship at Convera Corporation. | ||
Extensive Knowledge of the Company’s Business and/or IndustryDirector of the Company since 1982, and through Allen & Company Incorporated, has served as financial advisor to the Company and its bottling partners on numerous transactions. | ||
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Risk Oversight/Management Expertise Extensive experience managing risk as President and Chief Executive Officer of Allen & Company Incorporated, including overseeing and advising on principal investments, investing in companies with an international and emerging market presence, public and private capital markets transactions and merger and acquisition transactions. |
INDEPENDENT Age:60 Director since:2015 Board Committees: ●Audit PUBLIC BOARD MEMBERSHIPS Current Public Company Boards:International Consolidated Airlines Group, S.A. (since 2016); Exor N.V. (since 2016) Previous Public Company Boards (Past Five Years): Marks & Spencer Group p.l.c. (2010-2016); ManpowerGroup Inc. (2004-2015) | ||||
CAREER HIGHLIGHTS ●The Blackstone Group Inc. | leading investment firms ○
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○Since 2019 Chairman of The Blackstone Group ●Marks & Spencer Group p.l.c. ○May 2010 to April ●WM Morrison Supermarkets PLC, a leading supermarket chain in the UK ○September 2006 to April ●Heineken N.V., one of the world’s largest brewers ○2005 to July 2006 ○2001 to July ○1999 to 2001 Managing Director of subsidiary Heineken Export Group Worldwide ○1995 to 1998 Managing Director of subsidiary Heineken Slovensko ○1987 Started his career at Heineken N.V. in the Netherlands |
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KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceExtensive operational and financial experience as Chief Executive Officer of Marks & Spencer Group p.l.c., Chief Executive Officer of WM Morrison Supermarkets PLC, | ||
Relevant Senior Leadership/Chief Executive Officer Experience
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| Marketing Experience
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Extensive brand marketing and retail expertise as Chief Executive Officer of Marks & Spencer Group p.l.c. and WM Morrison Supermarkets PLC, as well as serving as Chief Operating Officer and head of Global Marketing for Heineken N.V., where he was responsible for brand and marketing strategies. | ||
Broad International Exposure/Emerging Market ExperienceServes as lead non-executive director of the UK Department for International Development, led international expansion of Marks & Spencer Group p.l.c., held several international management positions while at Heineken N.V., and is the founder of the Movement to Work charity, which provided nearly 100,000 underprivileged young people with work experience and jobs. | ||
Risk Oversight/Management ExpertiseExtensive experience overseeing risk as Chief Executive Officer of Marks & Spencer Group p.l.c. and WM Morrison Supermarkets PLC, and as Chief Operating Officer of Heineken N.V. Additional risk management experience as head of The Blackstone Group |
16 The Coca-Cola Company
Item 1 Election of Directors GOVERNANCE 6
Ana Botín | ||||||
INDEPENDENT Age:59 Director since:2013 Board Committees: ●Directors and Corporate Governance ●Finance PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Banco Santander, S.A. (since 1989); Santander UK plc (since 2010) and Santander UK Group Holdings plc (since 2014), both of which are wholly owned subsidiaries of Banco Santander, S.A. Previous Public Company Boards (Past Five Years): None | CAREER HIGHLIGHTS ●Banco Santander, S.A. ○Since September 2014 Executive Chair ○December 2010 to September 2014 Chief Executive Officer of subsidiary Santander UK plc, a ○2002 to 2010 ○1988 Joined Banco Santander, S.A. ●JP Morgan ○1981 to |
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KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceInternationally recognized expert in the investment banking industry with knowledge of global macroeconomic issues. Over | ||
Relevant Senior Leadership/Chief Executive Officer ExperienceExecutive Chair of Banco Santander, S.A. since September 2014 and | ||
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Broad International Exposure/Emerging Market ExperienceExecutive Chair of Banco Santander, S.A., a global financial institution with operations in Europe, North America, Latin America and Asia. Board member of the Institute of International Finance, a global association of the financial industry. Founder and Vice Chair of Fundación Empresa y Crecimiento, which finances small and | ||
| Governmental or Geopolitical ExpertiseExtensive experience with the regulatory framework applicable to banking institutions throughout the globe during her 31-year tenure with Banco Santander, S.A. | |
Risk Oversight/Management ExpertiseExtensive experience from her work with Banco Santander, S.A., Santander UK plc and Banco Español de Crédito, S.A. in the oversight and management of risks associated with retail and commercial banking |
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Christopher C. Davis INDEPENDENT Age:54 Director since:2018 Board Committees: ●Talent and Compensation ●Finance PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Graham Holdings Company (since 2006); Selected Funds (consisting of two portfolios) (since 1998); Davis Funds (consisting of 13 portfolios) (since 1997); Clipper Funds Trust (consisting of one portfolio) (Trustee since 2014) Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●Davis Selected ○Since 1997 Chairman ●Davis Selected Advisers, L.P. ○1995 ○1989 Joined Davis Advisors as |
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a financial analyst | ||
KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceMore than | ||
Relevant Senior Leadership/Chief Executive Officer Experience
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Marketing Experience Under the leadership of Mr. Davis, Davis Advisors is widely recognized as a premier investment manager serving individual investors worldwide, identifying investment opportunities both within and outside the | ||
Broad International Exposure/Emerging Market ExperienceUnder the leadership of Mr. Davis, Davis Advisors seeks investment growth opportunities and diversification potential that international companies in both developed and developing markets provide. | ||
Risk Oversight/Management ExpertiseExtensive experience evaluating strategic investments and transactions and managing risk against the volatility of equity markets during his |
2020 Proxy Statement 17
6 GOVERNANCEItem 1 Election of Directors
Barry Diller INDEPENDENT Age:78 Director since:2002 Committees: ●Directors and Corporate Governance ●Finance (Chair) ●Management Development ●Executive PUBLIC BOARD MEMBERSHIPS Current Public Company Boards:Expedia Group, Inc. (since 2005) and IAC/ InterActiveCorp (since 1995) Previous Public Company Boards (Past Five Years): Graham Holdings Company (2000-2017) | ||||
CAREER HIGHLIGHTS ●IAC/InterActiveCorp, a leading media and Internet company ○Since December ○August 1995 to ●Expedia Group, Inc., an online travel company ○Since August ●TripAdvisor, Inc., an online travel company ○April 2013 ○December 2011 to April 2013 Board member ○December 2011 to December 2012 Chairman and Senior Executive ●Live Nation Entertainment, Inc. ○January 2010 to January 2011 Board member ○January 2010 to October 2010 |
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Non-executive Chairman | ||
KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceExtensive experience in financings, mergers, acquisitions, investments and strategic transactions, including transactions with Silver King Broadcasting, QVC, Inc., Ticketmaster Entertainment, Inc. and Home Shopping Network, Inc. Served on the Finance Committee of Graham Holdings | ||
Relevant Senior Leadership/Chief Executive Officer Experience
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Marketing Experience Serves as Chairman and Senior Executive | ||
Innovation/Technology ExperienceExtensive experience | ||
Broad International Exposure/Emerging Market ExperienceServes at IAC/InterActiveCorp, a leading media and Internet company focused on the areas of search and applications, dating, education and fitness businesses, media and e-commerce, and at online travel companies Expedia Group, Inc. and TripAdvisor Inc. Served as a member of the Council on Foreign Relations. |
Helene D. Gayle INDEPENDENT Age:64 Director since:2013 Committees: ●Talent and Compensation (Chair) ●Public Policy and Sustainability PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Colgate-Palmolive Company (since 2010) Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●The Chicago Community Trust, a community foundation dedicated to improving the Chicago region ○Since October ●McKinsey Social Initiative, an independent nonprofit organization founded by McKinsey & Company ○July 2015 to September ●CARE USA, an international humanitarian and gobal development organization ○2006 to 2015 President and Chief Executive Officer ●Bill & Melinda Gates Foundation ○2001 to 2006 ●U.S. Centers for Disease Control and Prevention (“CDC”) ○1984 to 2001 Started her career in |
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1995 | ||
KEY QUALIFICATIONS AND EXPERIENCES | ||
Relevant Senior Leadership/Chief Executive Officer ExperienceServed as Chief Executive Officer of The Chicago Community Trust, | ||
Innovation/Technology ExperienceSignificant experience using and developing innovative approaches, solutions and technologies in her work with McKinsey Social Initiative, CARE USA, the CDC and the Bill & Melinda Gates Foundation. | ||
Broad International Exposure/Emerging Market ExperienceImplemented the McKinsey Social Initiative’s Generation | ||
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Governmental or Geopolitical ExpertiseExtensive leadership experience in the global public health | ||
Risk Oversight/Management ExpertiseExtensive risk oversight and management experience with the delivery of emergency relief and long-term international development projects and in the global public health field. Director of the Federal Reserve Bank of Chicago, which participates in the formulation of monetary policy, |
18 The Coca-Cola Company
Item 1 Election of Directors GOVERNANCE 6
Alexis M. Herman INDEPENDENT Age:72 Director since:2007 Board Committees: ●Talent and Compensation ●Public Policy and Sustainability (Chair) PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Cummins Inc. (since 2001), Entergy Corporation (since 2003) and MGM Resorts International (since 2002) Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●New Ventures LLC, a risk management consulting firm ○Since 2001 Chair and Chief Executive Officer ●Toyota Motor Corporation ○Since 2002 Chair of the ●The Coca-Cola Company ○2001 to 2006 Chair of the ●U.S. Department of Labor ○1997 to 2001 |
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Labor | ||
KEY QUALIFICATIONS AND EXPERIENCES | ||
| High Level of Financial ExperienceSignificant financial experience as Chief Executive Officer of New Ventures LLC and as Chair of the Working Party for the Role of Women in the Economy for the Organisation for Economic Co-operation and Development (“OECD”), an intergovernmental economic organization. Additional financial experience through former service on the Audit Committee of MGM Resorts International, a | |
Relevant Senior Leadership/Chief Executive Officer ExperienceChief Executive Officer of New Ventures LLC. Former U.S. Secretary of Labor from 1997 to 2001. | ||
Broad International Exposure/Emerging Market ExperienceDirector of Cummins Inc., a global power leader that | ||
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Governmental or Geopolitical Expertise Former U.S. Secretary of | ||
Risk Oversight/Management ExpertiseSignificant expertise in management and oversight of labor and human relations risks, including handling the United Parcel Service workers’ strike in 1997 while U.S. Secretary of Labor. Chair of the Company’s Human Resources Task Force following the November 2000 settlement of an employment lawsuit. Serves as Lead Director and Chair of the Governance and Nominating Committee of Cummins Inc. Served as Chair of the Business Advisory Board at Sodexo, Inc. and member of the Audit Committee of MGM Resorts International. |
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Robert A. Kotick INDEPENDENT Age:57 Director since:2012 Committees: ●Finance ●Management Development PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Activision Blizzard, Inc. (since 1991) Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●Activision Blizzard, Inc., a leading global developer and publisher of interactive entertainment ○Since 2008Chief Executive Officer and Director ○1991 to 2008 Chairman and Chief Executive Officer of Activision, Inc., the predecessor to Activision Blizzard, Inc. ●Call of Duty Endowment ○Co-founder and co-chairman of this nonprofit |
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get veterans back to work | ||
KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceOver | ||
Relevant Senior Leadership/Chief Executive Officer ExperienceServed as Chief Executive Officer of Activision Blizzard, Inc.’s predecessor for over 17 years and has served as Chief Executive Officer of Activision Blizzard, Inc. since 2008. | ||
Marketing ExperienceSignificant marketing experience with Activision Blizzard, Inc. and its predecessor, bringing extensive insight about key demographic groups and utilization of technology and social media in marketing. | ||
Innovation/Technology Experience
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Risk Oversight/Management ExpertiseExtensive experience overseeing risk as Chief Executive Officer of Activision Blizzard, Inc., including developing new intellectual properties and investments in complementary business opportunities. |
2020 Proxy Statement 19
6 GOVERNANCEItem 1 Election of Directors
Maria Elena Lagomasino INDEPENDENT Age:70 Director since:2008 Lead Independent Director since:2019 Committees: ●Talent and Compensation ●Directors and Corporate Governance (Chair) ●Management Development PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: The Walt Disney Company (since 2015) Previous Public Company Boards (Past Five Years): Avon Products, Inc. (2000-2016) | ||||
CAREER HIGHLIGHTS ●WE Family Offices, a global family office serving high net worth families ○Since March ●GenSpring Family Offices, LLC, a wealth management firm and an affiliate of SunTrust Banks, Inc. ○November 2005 ●JPMorgan Private Bank, a division of JPMorgan Chase & Co., a global financial services ○2001 to ○1983 to 2001 Various positions in private banking with The Chase Manhattan Bank, including as Managing Director in charge of its Global Private Banking ●The ○April 2003 to April |
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KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceOver | ||
Relevant Senior Leadership/Chief Executive Officer ExperienceServes as Chief Executive Officer of WE Family Offices and served as Chief Executive Officer of GenSpring Family Offices, LLC and JPMorgan Private Bank. | ||
Broad International Exposure/Emerging Market ExperienceSignificant international experience | ||
| Governmental or Geopolitical ExpertiseExperience with regulatory framework applicable to banking institutions in Latin America during tenure with The Chase Manhattan Bank, and as Chief Executive Officer of JPMorgan Private Bank. Exposure to international geopolitical issues in the Americas Society, Cuba Study Group and the Council on Foreign Relations. | |
Risk Oversight/Management ExpertiseExtensive oversight of risk associated with wealth management and investment strategies |
James Quincey
Director since:2017 Chairman since: 2019 Committees: ●Executive (Chair) PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Pfizer Inc. (since February 2020) Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●The Coca-Cola Company ○Since April 2019 Chairman ○Since May 2017Chief Executive Officer ○August 2015 to ○August 2015 to April |
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○January 2013 to August 2015 ○October 2008 to January 2013 President of the Northwest Europe and Nordics business unit ○December 2005 to October 2008 ○December 2003 to December 2005 ○1996 Joined the Company |
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KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceExtensive financial experience | ||
Relevant Senior Leadership/Chief Executive Officer Experience
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Innovation/Technology Experience
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Broad International Exposure/Emerging Market ExperienceOver 23 years of Coca-Cola system experience, including extensive experience in international markets, such as Latin America and Europe. Responsibility for all the Company’s operating units worldwide as President and Chief Operating Officer and, currently, as Chief Executive Officer. Member of the Board of Directors of the US-China Business Council and the Consumer Goods Forum. | ||
Extensive Knowledge of the Company’s Business and/or IndustrySince joining the Company in 1996, has held a multitude of operational roles within the Coca-Cola system. |
20 The Coca-Cola Company
Item 1 Election of Directors GOVERNANCE 6
Caroline J. Tsay INDEPENDENT Age:38 Director since:2018 Committees: ●Audit ●Public Policy and Sustainability PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: Morningstar, Inc. (since 2017) Previous Public Company Boards (Past Five Years): Rosetta Stone Inc. (2014-2018); Travelzoo Inc. (2015-2017) | ||||
CAREER HIGHLIGHTS ●Compute Software, Inc., an enterprise cloud ○Since January 2017 Chief Executive Officer and ●Hewlett Packard Enterprise Company (“HPE”), an information technology company ○March 2013 to December 2016 ●Yahoo! Inc., ○April 2007 to March 2013 |
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KEY QUALIFICATIONS AND EXPERIENCES | ||
| High Level of Financial Experience
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Relevant Senior Leadership/Chief Executive Officer ExperienceServed as Chief Executive Officer of Compute Software, Inc. and as Vice President and General Manager of Software at | ||
Marketing ExperienceAt Compute Software, Inc., is responsible for developing an enterprise software platform for customers running | ||
Innovation/Technology Experience
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Risk Oversight/Management Expertise Extensive experience overseeing risk associated with the development and growth of enterprise software and consumer |
David B. INDEPENDENT Age:68 Director since:2015 Committees: ●Audit ●Management Development PUBLIC BOARD MEMBERSHIPS Current Public Company Boards: None Previous Public Company Boards (Past Five Years): None | ||||
CAREER HIGHLIGHTS ●Judd Enterprises, Inc., a private, ○Since 1996 Chairman and ●Digital ○Since 1996 President ●Mayer, Brown & Platt, a leading international law firm ○September 1989 to June 1996 |
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KEY QUALIFICATIONS AND EXPERIENCES | ||
High Level of Financial ExperienceIn his position | ||
Relevant Senior Leadership/Chief Executive Officer ExperienceSince 1996, has served as Chairman and Chief Executive Officer of Judd Enterprises, Inc., | ||
Innovation/Technology ExperienceExtensive entrepreneurial experience in Digital Bandwidth LLC, overseeing investments in early stage companies focusing on technologies, including wireless networks, speech recognition, cybersecurity and radio frequency identification tags. | ||
Broad International Exposure/Emerging Market Experience
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Risk Oversight/Management Expertise Extensive risk oversight and management experience overseeing a private investment management office |
2020 Proxy Statement 21
BOARD AND COMMITTEE6 GOVERNANCEBoard and Committee Governance
Board and Committee Governance
Role of the Board
The Board is elected by the shareowners to oversee their interests in the long-term health and overall success of the Company’s business and financial strength. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the shareowners. The Board oversees the proper safeguarding of the assets of the Company, the maintenance of appropriate financial and other internal controls and the Company’s compliance with applicable laws and regulations and proper governance. The Board selects the Chief Executive Officer and oversees the members of senior management, who are charged by the Board with conducting the business of the Company.
KEY RESPONSIBILITIES OF THE BOARD |
✓The Board oversees and monitors strategic planning.
✓Business strategy is a key focus at the Board level and embedded in the work of Board committees.
✓Company management is charged with executing business strategy and provides regular performance updates to the Board. |
OVERSIGHT OF RISK ✓The Board oversees risk management.
✓Board committees, which meet regularly and report back to the full Board, play significant roles in carrying out the risk oversight function.
✓Company management is charged with managing risk, through robust internal processes and effective internal controls. |
SUCCESSION PLANNING ✓The Board oversees succession planning and talent development for senior executive positions.
✓The Management Development Committee, which meets regularly and reports back to the Board, has primary responsibility for developing succession plans for the CEO position.
✓The CEO is charged with preparing, and reviewing with the Management Development Committee, talent development plans for senior executives and their potential successors. |
OVERSIGHT OF STRATEGY
Strategic planning and oversight of the Company’s business strategy and strategic planning is a key responsibility of the Board. The Board believes that overseeing and monitoring strategy is a continuous process and takes a multilayered approach in exercising its duties. The Board dedicates one meeting each year to focus on business strategy, and elements of strategy are addressed in every Board meeting and embedded in the work of Board committees. This ongoing effort enables the Board to focus on Company performance over the short, intermediate and long term, as well as the quality of operations. In addition to financial and operational performance, non-financial measures, including sustainability goals, are discussed regularly by the Board and Board committees.
The Board is committed to oversight of the Company’s business strategy and strategic planning, including work embedded in the Board committees, regular Board meetings and a dedicated meeting each year to focus on strategy. | This ongoing effort enables the Board to focus on Company performance over the short, intermediate and long term, as well as the quality of operations. In addition to financial and operational performance, non-financial measures, including sustainability goals, are discussed regularly by the Board and Board committees. | ||||||||
While the Board and its committees oversee strategic planning, Company management is charged with executing the business strategy. To monitor performance against the Company’s strategic goals, the Board receives regular updates and actively engages in dialogue with our Company’s senior leaders. These boardroom discussions are enhanced with “hands-on” experiences, such as market visits, which provide Directors an opportunity to see strategy execution first hand.
The Board’s oversight and management’s execution of business strategy are viewed with a long-term mindset and a focus on assessing both opportunities for and potential risks to the Company.
22 The Coca-Cola Company
Oversight of RiskBoard and Committee Governance GOVERNANCE 6
OVERSIGHT OF RISK
Inherent in the Board’s responsibilities is an understanding of and oversight ofover the various risks facing the Company. The Board does not view risk in isolation. Risks are considered in virtually every business decision. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk taking is essential for the Company to be competitive on a global basis and to achieve the Company’s long-term strategic objectives. Effective risk oversight is an important priority of the Board. The Board has implemented a risk governance framework designed to:
understand critical risks in the Company’s business and strategy; | |
allocate responsibilities for risk oversight among the full Board and its committees; | |
evaluate the Company’s risk management processes and whether they are functioning adequately; |
facilitate open communication between management and Directors; and | |
foster an appropriate culture of integrity and risk awareness. |
The Company believes that its Board leadership structure supports the risk oversight function of the Board. The Board implements its risk oversight function both as a whole and through delegation to Board committees, which meet regularly and report back to the Board. The Board Committees section beginning on page 30 includes a summary of the risk oversight focus area of the committees.
BOARD OVERSIGHT | ||||||||||
COMMITTEES | ||||||||||
AUDIT | TALENT AND COMPENSATION DIRECTORS AND CORPORATE GOVERNANCE | PUBLIC POLICYAND SUSTAINABILITY FINANCE | MANAGEMENT DEVELOPMENT | |||||||
ROLE OF MANAGEMENT While the Board and its committees oversee risk management, Company management is charged with managing risk. The Company has robust internal processes and an effective internal control environment that facilitate the identification and management of risks and regular communication with the Board. These include an enterprise risk management (“ERM”) program | ||||||||||
2020 Proxy Statement 23
6 GOVERNANCEBoard and Committee Governance
CYBERSECURITY OVERSIGHT | |
The Board recognizes the importance of maintaining the trust and confidence of our customers, consumers and employees. To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes. The Audit Committee receives regular reports from the Chief Information Security Officer and the Chief Information Officer on, among other things, the Company’s cyber risks and threats, the status of projects to strengthen the Company’s information security systems, assessments of the Company’s security program and the emerging threat landscape. The Audit Committee regularly briefs the full Board on these matters. |
To learn more about risks facing the Company, you can review the factors included in Part I, “Item 1A. Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 20172019 (the “Form 10-K”). The risks described in the Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial based on the information known to the Company also may materially adversely affect the Company’s business, financial condition or results of operations in future periods.
Management Development and Succession PlanningMANAGEMENT DEVELOPMENT AND SUCCESSION PLANNING
The Board believes that one of its primary responsibilities is to oversee the development and retention of senior management talent and to ensure that an appropriate succession plan is in place for our Chief Executive Officer and other members of senior management. The Management Development Committee, together with the Chief Executive Officer, regularly reviews senior management talent, including readiness to take on additional leadership roles and developmental opportunities needed to prepare senior leaders for greater responsibilities. In addition, the Management Development Committee regularly discusses recommendations and evaluations from the Chief Executive Officer as to potential successors to fill such senior positions. The Chief Executive Officer also provides a regular review to the Management Development Committee assessing the members of the executive leadership team and his or her potential to succeed him. This review includes a discussion about development plans for senior leaders to help prepare them for future succession and contingency plans in the event the Chief Executive Officer is unable to serve for any reason (including death or disability). While the Management Development Committee has the primary responsibility to develop succession plans for the Chief Executive Officer position, it regularly reports to the Board and decisions are made at the Board level.
The Company’s governance framework provides the Board with the flexibility to select the appropriate Board leadership structure for the Company. In making determinations about the leadership structure, determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s shareowners. The current leadership structure is comprised of a combined Chairman of the Board and Chief Executive Officer, a Lead Independent Director, Board committees led primarily by independent Directors and active engagement by all Directors. The Board believes that this structure provides an effective balance between strong Company leadership and appropriate safeguards and oversight by independent Directors.
CURRENT LEADERSHIP STRUCTURE | ||||||||||
A combined Chairman of the Board and Chief Executive Officer | A Lead Independent Director | Board committees led primarily by independent Directors | ||||||||
ACTIVE ENGAGEMENT BY ALL DIRECTORS | ||||||||||
24 The Coca-Cola Company
Board and Committee Governance GOVERNANCE 6
The Chief Executive Officer maintains strong, hands-on relationships with the leaders of bottlers and remains close to the many facets of the business existing in so many places in the world. Because the Chief Executive Officer is the Board member closest to this vast and complex business, he or she is best able to identify many of the business issues that require Board attention and, as Chairman, can best focus Directors’ attention on the most critical business matters. Further, in the Board’s experience, the combined role of Chairman and Chief Executive Officer allows for timely and unfiltered communication with the Board on these critical business issues. The Board also believes that there are benefits when the same person represents both the Company and the Board throughout the world with bottlers, customers, consumers and other stakeholders.
Having the flexibility to select the appropriate structure based on the specific needs of the business is critical, and it is part of the judgment the Board believes it should exercise. The Board understands that BoardConsistent with the Board’s commitment to good corporate governance practices, at least one executive session of the non-employee Directors each year includes a review of the Board’s leadership structure is an important topic for many shareowners, and consideration of whether the Board takes shareowner feedback into account when making determinations around Board leadership structure.
Leadership Structure – Details and Rationale
Our current Board leadership structure is comprisedposition of a Chairman of the Board who is not independent, ashould be held by the Chief Executive Officer, a Lead Independent Director,Officer.
The Board committees led primarily by independentbelieves that it is important to note that all Directors andplay an active engagement by all Directors. The totality ofrole in overseeing the work ofCompany’s business both at the Board is spread through ourand committee structure, and this structure ensures strong, independent leadership by a majority of Directors.
levels. As part of each regularly scheduled Board meeting, the non-employee Directors meet in executive session without the Chief Executive Officer or Chairman of the Board present. These meetings allow non-employee Directors to discuss issues of importance to the Company, including the business and affairs of the Company as well as matters concerning management, without any member of management present.
DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Chairman of the Board, the Chief Executive Officer and the Lead Independent Director and the Chief Executive Officer are described in the table below and are set forth in the Company’s By-Laws and Corporate Governance Guidelines.
We have historically combined the roles of Chairman of the Board and Chief Executive Officer, and our Board has been satisfied that a combined Chairman and Chief Executive Officer structure has served our shareowners well over time. Under our current governance structure, the Board has the flexibility to ensure the appropriate Board leadership structure based on the specific needs of the business at the time.
In December 2016, the Board decided to split the roles when it appointed James Quincey to succeed Muhtar Kent as Chief Executive Officer. In order to facilitate an orderly succession plan, effective May 1, 2017, Mr. Kent was appointed to continue as Chairman of the Board, with primary responsibility for leading the Board, and Mr. Quincey assumed the role of Chief Executive Officer, with complete accountability for the Company’s strategic direction and operations. Mr. Quincey was also elected as a Director at the 2017 Annual Meeting, and Sam Nunn was reappointed by the Board to serve as the Lead Independent Director.
Consistent with our commitment to good corporate governance practices, at least one executive session of the non-employee Directors each year will include a review of the Board’s leadership structure and consideration of whether the position of Chairman of the Board should be held by the Chief Executive Officer. In February 2018, the Committee on Directors and Corporate Governance evaluated the current Board leadership structure and recommended that the Board continue with the current structure, noting the success of the partnership between Mr. Quincey and Mr. Kent in executing Board-aligned strategies in what continues to be a critical time during the transformation of the Company. The Board will continue to periodically evaluate the Board leadership structure to ensure that the Board’s structure is appropriate in light of the needs of the business.
CHAIRMAN OF THE BOARD | ||||||
✓ | ||||||
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✓ | Presides over meetings of shareowners.
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✓ | Consults and advises the Board and its committees on the business and affairs of the Company.
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✓ | Performs such other duties as may be assigned by the Board. |
CHIEF EXECUTIVE OFFICER | |||
✓ |
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LEAD INDEPENDENT DIRECTOR | ||||||
✓ | ||||||
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✓ | Encourages and facilitates active participation of all Directors.
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✓ | Serves as a liaison between the independent Directors and the Chairman of the Board on sensitive issues and otherwise when appropriate.
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✓ | Approves Board meeting materials for distribution to and consideration by the Board.
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✓ | Approves Board meeting agendas after conferring with the Chairman of the Board and other members of the Board, as appropriate, and may add agenda items at his or her discretion.
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✓ | Approves Board meeting schedules to assure that there is sufficient time for discussion of all agenda items. | |||||
✓ |
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✓ | Leads the Board’s annual evaluation of the Chairman of the Board and Chief Executive Officer.
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✓ | Monitors and coordinates with management on corporate governance issues and developments.
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✓ | Available to advise the committee chairs in fulfilling their designated roles and responsibilities to the Board.
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✓ | Available for consultation and communication with shareowners where appropriate, upon reasonable request.
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✓ | Performs such other functions as the Board or other Directors may request. |
2020 Proxy Statement 25
6 GOVERNANCEBoard Committeesand Committee Governance
Board and Committee Evaluation Process
The Board hasrecognizes that a robust and constructive evaluation process is an Audit Committee, a Compensation Committee, aessential component of good corporate governance and Board effectiveness. Under the leadership of the Lead Independent Director, the Committee on Directors and Corporate Governance an Executiveoversees the Board’s annual evaluation process. The Committee on Directors and Corporate Governance periodically reviews the format of the evaluation process, including whether to utilize a third-party facilitator, to ensure that actionable feedback is solicited on the operation and effectiveness of the Board, Board committees and Director performance.
1 | EVALUATION COMPONENTS | |||||||||
2 | 2019 MULTI-STEP EVALUATION PROCESS | |||||||||
1 | Questionnaire | Directors provided feedback regarding: | ||||||||
●Board composition and structure ●Meetings and materials ●Future agenda items | ●Board interaction with management ●Effectiveness of the Board ●Director education opportunities | |||||||||
2 | Committee Chairs Met | Committee chairs met to provide feedback and input prior to the annual Board closed self-evaluation session. | ||||||||
3 | One-on-One Discussions with Lead Independent Director | The Lead Independent Director conducted separate, one-on-one sessions with each Director to discuss any additional feedback or perspectives. | ||||||||
4 | Committee/Board Closed Sessions | Each committee and the full Board conducted separate closed self-evaluation sessions. The results of the questionnaire, the Lead Independent Director sessions, the committees’ self-evaluations and other feedback were discussed by the Board. | ||||||||
3 | INCORPORATION OF FEEDBACK Our multi-step evaluation process generates robust comments and discussion at all levels of the Board, including with respect to Board composition and processes. These evaluation results have led to changes designed to increase Board effectiveness and efficiency. For example, over the last few years, enhancements have been made regarding meeting materials, the structure of the Board, responsibilities of committees, committee and executive session discussions, committee reports to the Board, the Board evaluation process, the Director on-boarding process and providing Directors with more opportunities for continuing education and to have hands-on experiences with our business, senior leaders and emerging talent around the world. In addition, as a result of the evaluation process, the Board implemented annual Board innovation awards to help drive a culture of innovation that balances rapid iteration, disciplined execution, entrepreneurial audacity, intelligent risk taking and continuous learning from failure to build the capabilities the Company needs for long-term growth. The Board also created the Millennial Advisory Council as a way for millennials at the Company to share their perspectives with the Board. |
26 The Coca-Cola Company
Board and Committee Governance GOVERNANCE 6
Board Committees
The Board has seven standing committees: the Audit Committee, the Talent and Compensation Committee, the Committee on Directors and Corporate Governance, the Finance Committee, athe Management Development Committee, the Public Policy and a Public IssuesSustainability Committee and Diversity Reviewthe Executive Committee. The Board has adopted a written charter for each of these committees, which isare available on the Company’s websitewww.coca-colacompany.com, by clicking on “Investors”, then “Corporate Governance” and then “Corporate Governance.“Committees.” Information about each committee is provided below. Membership of each committee is as of December 31, 2019.
AUDIT COMMITTEE
Audit Committee | ||||
2019 Members: Ronald W. Allen (Chair)1 Marc Bolland Caroline J. Tsay David B. Weinberg | Meetings Held in | |||
2019: | Independence2 4out of 4 | |||
Primary Responsibilities:
PRIMARY RESPONSIBILITIES
Represents and assists the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s financial statements and the financial reporting process, the systems of internal accounting and financial controls, the internal audit function and the annual independent audit of the Company’s financial statements. |
Oversees the Company’s compliance with legal and regulatory requirements, the Independent Auditors’ qualifications and independence, the performance of the Company’s internal audit function and the Independent Auditors, the Company’s ethical compliance programs, including the Company’s Codes of Business Conduct, and the Company’s quality and food safety programs, workplace and distribution safety programs and information technology security |
Oversees the Company’s |
Risk Oversight Focus Area:
COMPENSATION COMMITTEE
Each member |
Primary Responsibilities:PRIMARY RESPONSIBILITIES
● | Evaluates and approves compensation plans, policies and programs applicable primarily to the Company’s senior executive group, which includes all individuals subject to Section 16 of the 1934 Act. |
Approves all equity awards to employees, including stock options, performance share units, restricted stock and restricted stock units. |
Maintains sole authority to retain, terminate and approve fees and other terms of engagement of its compensation consultant and to obtain advice and assistance from internal or external legal, accounting or other advisors. |
Risk Oversight Focus Area:
Legend:Key Qualifications and Experience (see page 16)
COMMITTEE ON DIRECTORS AND CORPORATE GOVERNANCE
Each member of the Committee |
2020 Proxy Statement 27
6 GOVERNANCEBoard and Committee Governance
Primary Responsibilities:PRIMARY RESPONSIBILITIES
Responsible for considering and making recommendations concerning Director nominees and the function and needs of the Board and its committees.
Regularly reviews the Company’s Corporate Governance Guidelines and provides oversight of the corporate governance affairs of the Board and the Company consistent with the long-term best interests of the Company and its shareowners.
Coordinates the annual Board, committee and Director evaluation process, which is led by the Lead Independent Director.
Understands and considers shareowner viewpoints on corporate governance matters.
Risk Oversight Focus Area:
The Company’s governance practices, Board composition and refreshment and committee leadership.
EXECUTIVE COMMITTEE
● | Considers and makes recommendations concerning Director nominees and the function and needs of the Board and its committees. |
● | Regularly reviews the Company’s Corporate Governance Guidelines and provides oversight of the corporate governance affairs of the Board and the Company consistent with the long-term best interests of the Company and its shareowners. |
● | Coordinates the annual Board, committee and Director evaluation process, which is led by the Lead Independent Director. |
● | Considers shareowner viewpoints on corporate governance matters. |
1 | Messrs. Daley and Nunn served on the Committee until April 24, 2019. |
2 | Each member of the Committee meets the independence requirements of the NYSE and the Company’s Corporate Governance Guidelines. |
Finance Committee | ||||
2019 Members: Barry Diller (Chair) Herbert A. Allen Ana Botín Christopher C. Davis Robert A. Kotick | Meetings Held in 5 Independence 4out of 5 |
PRIMARY RESPONSIBILITIES
● | Helps the Board fulfill its responsibilities relating to oversight of the Company’s financial affairs, including reviewing and recommending to the Board dividend policy, capital expenditures, debt and other financings, major strategic investments and other transactions. |
Oversees the Company’s policies and procedures on risk management, hedging, swaps and other derivative transactions. |
Primary Responsibilities:
Authorized to exercise the power and authority of the Board between meetings, except the powers reserved for the Board or the shareowners under the Delaware General Corporation Law. If matters are delegated to the Executive Committee by the Board, the Committee may act at a meeting or by written consent in lieu of a meeting.
FINANCE COMMITTEE
Primary Responsibilities:
Helps the Board fulfill its responsibilities relating to oversight of the Company’s financial affairs, including reviewing and recommending to the Board dividend policy, capital expenditures, debt and other financings, major strategic investments and other transactions.
Oversees the Company’s policies and procedures on risk management, hedging, swaps and other derivative transactions.
Risk Oversight Focus Area:
The Company’s capital structure, pension plan investments, currency risk and hedging programs, taxes, mergers and acquisitions and capital projects.
Legend:Key Qualifications and Experience (see page 16)
MANAGEMENT DEVELOPMENT COMMITTEE
Herbert A. Allen (Chair) | ||||
Barry Diller | ||||
Robert A. Kotick | ||||
Maria Elena Lagomasino David B. Weinberg |
Primary Responsibilities:
Helps the Board fulfill its responsibilities relating to oversight of talent development for senior positions and succession planning.
Risk Oversight Focus Areas:
Management development and succession planning across senior management positions.
PUBLIC ISSUES AND DIVERSITY REVIEW COMMITTEE
Meetings Held in 5 Independence 4out of 5 |
PRIMARY RESPONSIBILITIES
● | Helps the Board fulfill its responsibilities relating to oversight of talent development for senior positions and succession planning. |
Public Policy and Sustainability Committee | |||||
2019 Members1: | |||||
Alexis M. Herman (Chair) | |||||
Helene D. Gayle Caroline J. Tsay | Meetings Held in 2019: 4 Independence 3out of 3 | ||||
PRIMARY RESPONSIBILITIES
● | Helps the Board fulfill its responsibilities relating to risks that concern certain regulatory, public policy and corporate social responsibility matters, including sustainability, and other public issues of significance, which may affect the Company’s business, its shareowners, the broader stakeholder community or the general public. |
1 |
Primary Responsibilities:28 The Coca-Cola Company
Helps the Table of Contents
Board fulfill its responsibilities relating to diversity, sustainability, corporate social responsibility and public issues of significance, which may affect shareowners, the Company, the business community and the general public.Committee Governance GOVERNANCE 6
Executive Committee | ||||
2019 Members1: James Quincey (Chair) Herbert A. Allen Barry Diller | Meetings Held in 2019: 0 Independence 1out of 3 |
Risk Oversight Focus Areas:PRIMARY RESPONSIBILITIES
● | Authorized to exercise the power and authority of the Board between meetings, except the powers reserved for the Board or the shareowners under the Delaware General Corporation Law. If matters are delegated to the Executive Committee by the Board, the Committee may act at a meeting or by written consent in lieu of a meeting. |
1 | Muhtar Kent served as Chair of the Committee until April 24, 2019. |
Issues that could pose significant reputational risk to the Company.
Regular meetings of the Board are held at such times as the Board may determine. Special meetings of the Board may be called by the Chairman, the Company’s Secretary or by a majority of the Directors by written request to the Secretary. Committee meetings can be called by the committee’s chair or by a majority of committee members.
In 2017,2019, the Board held six meetings, and committees of the Board held a total of 3735 meetings. Overall attendance at such meetings was approximately 99%96%. Each Director attended 75% or more of the aggregate of all meetings of the Board and the committees on which he or she served during 2017.2019.
2020 Proxy Statement 29
6Legend: GOVERNANCEAdditional Governance MattersKey Qualifications and Experience (see page 16)
Back to ContentsAdditional Governance Matters
Our relationship with shareowners is an important part of our Company’s success. The Board believes that shareowners should have lineand management believe they best execute their duties when they proactively listen to, seek to understand and consider the opinions of sight into decisions made in the boardroom. We do this by making a full-time effort of building relationships and trust over time with our shareowners. We have for some time cultivated meaningful and value-added relationshipsengage with our shareowners and the broader corporate governance community through ana year-round engagement program, thatwhich is management-led and overseen by the Board.
Our | |
The Board long ago established dedicated resources to actively engage with shareowners. The Company engages with shareowners on a variety of topics throughout the year to ensure we are addressing questions and concerns, to seek input and to provide perspective on Company policies and practices.
Shareownerpractices, seek shareowner input and incorporate feedback from this engagement is considered by the Board and reflected in enhancements to policies and practices. One recent example is our adoption of a proxy access bylaw, which the Board adopted following several months of thoughtful discussions with shareowners.as appropriate.
Who we engage | Who is involved in engagement | ||||
We engage a wide range of constituents, including: | Our engagement program involves: | ||||
●Institutional shareowners ●Retail shareowners ●Proxy advisory firms | ●ESG rating firms ●Industry thought leaders | ●The Board of Directors ●Senior management ●Employees from many different functions of the Company, including investor relations, legal, executive compensation,public policy, government affairs and sustainability teams |
How we engage | |||||
�� | |||||
We pursue multiple avenues for engagement, including: | TOPICS OF ENGAGEMENT | ||||
●In-person and virtual meetings ●Quarterly investor calls and other investor conferences and presentations ●Company-hosted presentations on ESG issues ●Participation in corporate governance organizations and other associations that provide valuable opportunities to convene together with a variety of investors, peer companies, policy makers and other interested parties in promoting knowledge and positive dialogue around corporate governance policy and practices (including The Council of Institutional Investors; Harvard Corporate Governance Roundtable; the Investor Stewardship Group; Stanford Institutional Investors Forum; the Millstein Center for Global Markets and Corporate Ownership; the National Association of Corporate Directors) ●Publication of a quarterly shareowner newsletter | Our interactions cover a broad range of ESG and business topics, including Board composition and structure; compensation; business strategy; performance and execution; sustainability; diversity; human capital management; and Company culture. |
In addition2019, we engaged with shareowners who collectively hold a majority of shares of our Common Stock. Below is a sample of our engagements with shareowners and the broader corporate governance community.
2019 COMMUNICATION AND ENGAGEMENT HIGHLIGHTS
30 The Coca-Cola Company
Additional Governance Matters GOVERNANCE 6
Human Capital Management
REFRESHING THE WORLD AND MAKING A DIFFERENCE WITH OUR EMPLOYEES
We believe people are our most important asset. Our people and culture agendas are critical business priorities, and we strive to direct engagement, the Company has institutedbe a numberglobal employer of complementary mechanismschoice that allow shareowners to effectively communicate a point of viewattracts high-performing talent with the Board, including:
the annual election of Directorspassion, skills and a majority vote standard (see page 17);
the annual advisory votemindsets to approve executive compensation (see page 45);
our commitment to thoughtfully consider shareowner proposals submitted to the Company (see page 97);
the ability to attend and voice opinions at the Annual Meeting of Shareowners (see page 94);
our dedicated 2018 Annual Meeting pagedrive us on our Company website (see page 95);journey to refresh the world and make a difference. We are committed to building an inclusive culture that inspires and supports the growth of our employees, serves our communities and shapes a more sustainable business.
OUR HUMAN CAPITAL PILLARS
CULTURE AND ENGAGEMENT | ||
We are taking deliberate action to foster a growth culture that is grounded in our Company purpose: to refresh the world and make a difference. We strive to act with a growth mindset, take an expansive approach to what’s possible and believe in continuous learning to improve our business and ourselves. We focus on four key growth behaviors – being curious, empowered, inclusive and agile – and value how we work as much as what we achieve. We believe culture enables our Company strategy and shapes employee experiences. Our key priorities are to: ●Inform action through culture, engagement and organizational health measurement and insights. ●Embed purpose, culture and our employee value proposition across employee experiences and enterprise initiatives. ●Support new ways of working as a networked organization through workforce and workplace experiments. | ||
LEADERSHIP, TALENT AND DEVELOPMENT | ||
Our talent strategy focuses on building inspirational leadership and capabilities that help our people be successful in the future. We recognize that one size does not fit all and are focused on creating an employee experience that is locally relevant in its approach and also provides the global breadth of learning and growth that we can provide for our people. We are: ●Accelerating a globally networked organization, with a focus on refreshed recruiting and talent practices and democratized learning. ●Building enterprise capability, striving to constantly build new skills for our employees so they can be more successful in the future, while also working to hire people with the skills we need for growth. | ||
DIVERSITY AND INCLUSION | ||
We believe creating a diverse and inclusive workplace is not only the right thing to do – it is a business priority that fosters greater creativity, innovation and connection to the communities we serve. We take a comprehensive view of diversity with an inclusive mindset, including gender, ethnicity, generation, disability/ability, sexual orientation, gender identity, military service, nationality, religion and other factors. The core of our diversity and inclusion strategy is to: ●Create an inclusive environment by engaging diverse talent and influencing recruitment, development, advancement and retention, including an aspiration for the Company to be 50% led by women in leadership. ●Evaluate our progress through the creation and review of systematic diagnostic tools and resources, and articulate our diversity and inclusion progress through proactive communications. We operate three Diversity Councils and eight Business Resource Groups to help shape an inclusive culture, build diverse talent and serve as incubators for fresh ideas. | ||
HUMAN RIGHTS | ||
Respect for human rights is a fundamental value of our Company. We strive to respect and promote human rights in accordance with the United Nations Guiding Principles on Business and Human Rights in our relationships with our employees, suppliers and independent bottlers. Our aim is to help increase the enjoyment of human rights within the communities in which we operate. To learn more about our workplace and human rights, including viewing our Human Rights Policy and other related policies, please visit www.coca-colacompany.com/policies-and-practices. | ||
BUSINESS INTEGRITY | ||
We have adopted a Code of Business Conduct that is applicable to the Company’s employees, including our Named Executive Officers. In addition, we have adopted a Code of Business Conduct for Non-Employee Directors. Our Codes of Business Conduct are grounded in our commitment to do the right thing. They serve as the foundation of our approach to ethics and compliance, and our anti-corruption compliance program is focused on conducting business in a fair, ethical and legal manner. For more information on our Codes of Business Conduct see page 33. |
2020 Proxy Statement 31
the ability to direct communications to individual Directors or the entire Board (see page 96Table of Contents);
6 GOVERNANCEAdditional Governance Matters
THE BOARD’S ROLE IN HUMAN CAPITAL MANAGEMENT | |
The Board is actively engaged in overseeing the Company’s people and culture strategy. In 2019, the Board made important structural changes to the committee formerly known as the Compensation Committee, repositioned as the Talent and Compensation Committee, to expand the responsibilities of the Committee to include oversight of talent, leadership and culture, including diversity and inclusion. The Talent and Compensation Committee intends to meet twice in 2020 to review and report back to the Board on a broad range of human capital management topics, including talent management, leadership development, retention, culture, employee engagement, employee education and training, diversity and inclusion, and equality and fairness. Seepage 46 for more information on the Talent and Compensation Committee. |
SUSTAINABILITY |
In everything we do, we aim to create a more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet. We recognize that the sustainability of our business is directly linked to the sustainability of the communities we call home, and that’s why our approach is guided by our purpose: to refresh the world and make a difference. Working collaboratively with our bottling partners and stakeholders at every stage of our value chain, we look to integrate sustainability into our everyday actions. For example, we share best practices and knowledge across the Coca-Cola system to build business resiliency and better manage water resources. From ingredient sourcing to packaging recovery, we strive to create shared opportunity through growth in every corner of the world, with an ongoing focus on building inclusion and empowering people’s access to equal opportunities. We have a responsibility to use water respectfully and efficiently. For us, that means being water balanced and improving water security where it is needed most. Food and beverage packaging are an important part of our modern lives, yet the world has a packaging waste problem. Our vision is to make packaging part of a circular economy, and our World Without Waste initiative is a clear strategy with commitments to recover a bottle or can for every one we sell by 2030—and then to recycle and reuse. The Public Policy and Sustainability Committee reviews the Company’s sustainability program and goals and the Company’s progress toward achieving those goals. The Board and the Public Policy and Sustainability Committee also receive periodic reports from the Chief Sustainability Officer, and others as required, related to the accomplishment of the Company’s sustainability goals. Seepage 28 for more information about the Public Policy and Sustainability Committee. To learn more about the Company’s sustainability efforts, including our comprehensive sustainability commitments, please view our current Business & Sustainability Report on the Company’s website, by visiting www.coca-colacompany.com/sustainable-business. | OUR SUSTAINABLE BUSINESS PRIORITIES | |||
Sugar Reduction | ||||
We’re growing our business while reducing added sugar and providing consumers with more choices. | ||||
World Without Waste | ||||
We believe a World Without Waste is possible. | ||||
Climate | ||||
We look for ways to reduce our carbon footprint across the Coca-Cola value chain. | ||||
Shared Future | ||||
We aim to improve people’s lives and create a better shared future for our communities and planet. | ||||
Water Stewardship | ||||
We strive to replenish water back to nature and communities, improve efficiency and treat wastewater to high standards. |
32 The Coca-Cola Company
a quarterly newsletter for our shareowners (see wAdditional Governance Mattersww.coca-colacompany.com/shareowner-newsletter-signup GOVERNANCE). 6
We participate in public policy discussions on issues related to our industry and business priorities, our more than 700,000 Coca-Cola system associates, our shareowners and the communities we serve.
In the U.S.,United States, our Company and our affiliated political action committees comply with applicable laws and other requirements regarding contributions to political organizations; candidates for federal, state and local public office; ballot measure campaigns; political action committees; and trade associations. We engage with these organizations and individuals to make our views clear and uphold our commitment to help support the communities in which we operate. We base our U.S. political contributions on many considerations, supporting candidates whose priorities align with those of our Company when it comes to core issues that affect our business.
The Public IssuesPolicy and Diversity ReviewSustainability Committee of our Board of Directors reviews our advocacy efforts, including political contributions. See page 32 for more information about the Public Issues and Diversity Review Committee. Additional information about our public policy engagement efforts, including our political contributions policy and a report of U.S. political contributions from our Company and from associate-funded programs, which include The Coca-Cola Company Nonpartisan Committee for Good Government and various other state political action committees, can be viewed on our Companythe Company’s website atwww.coca-colacompany.com, by clicking on “Investors”“Investors,” then “Corporate Governance” and then “Public Policy Engagement.“Political Engagement Policy.”
We are committed to integrating sustainability into our everyday actions to help create value for shareowners and the communities in which we operate. We recognize that the sustainability of our business is directly linked to the sustainability of the communities we serve. In everything we do, we aim to strengthen the foundations of our business and communities so all can thrive long
into the future. Our approach to sustainability is guided by our vision to create social value and make a positive difference in the world, by building stronger communities and working to protect the environment. Working collaboratively with our bottling partners, we share best practices and knowledge to build business resiliency and better manage water resources. We work with partners at every stage of our value chain, from ingredient sourcing to packaging recovery. We strive to grow with conscience, add value across our system and help bring opportunities to every corner of the world; and we have an ongoing focus on enabling the economic empowerment of women along the way.
The Public Issues and Diversity Review Committee of our Board of Directors reviews the nature and scope of the Company’s sustainability goals and the Company’s progress toward achieving those goals. The Committee also receives, at least annually, presentations by the Chief Sustainability Officer, and others as required, related to the accomplishment of the Company’s sustainability goals. See page 32 for more information about the Public Issues and Diversity Review Committee.
In addition, our pay-for-performance philosophy awards executives in a way that motivates them to operate the Company’s business in a profitable and sustainable manner.
To learn more about the Company’s sustainability efforts, including our comprehensive sustainability commitments, please view our current Sustainability Report on the Company’s website, by visiting www.coca-colacompany.com/sustainability.
Special Meeting of Shareowners
Our By-Laws provide that a special meeting of shareowners may be called by the Chairman of the Board, the Chief Executive Officer, a majority of our Board or the Secretary, if appropriately requested by a person (or group of persons) beneficially owning at least a 25% “net long position” of the Company’s Common Stock. A shareowner’s “net long position” is generally defined as the amount of Common Stock in which the shareowner holds a positive (also known as “long”) economic interest, reduced by the amount of Common Stock in which the shareowner holds a negative (also known as “short”) economic interest.
Anti-Hedging, Anti-Short Sale and Anti-Pledging Policies
The Company’s anti-hedginginsider trading policy prohibits our Directors, the Company’s executive officers and other designatedthose employees, independent contractors and consultants who are from time to time added to the Company’s restricted trading list (collectively, the “Insiders”) from (i) purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of the Company’s Common Stock, includingCompany securities (including prepaid variable forward contracts, equity swaps, collars and exchange funds.funds), that were either granted as part of the individual’s compensation or that the individual holds directly or indirectly, and (ii) engaging in any short sales of Company Common Stock. These prohibitions also extend to any family member of our Insiders who share the same household with them and any other individual or entity whose investment decisions are influenced or controlled by any of our Insiders (collectively, the “Related Insiders”). Our policy also prohibits our Directors the Company’sand executive officers and other designated employeestheir Related Insiders from pledging Company Common Stock as collateral for a loan, holding Company Common Stock on margin or borrowing against Company Common Stock held in a margin account. Employees of the Company who are also prohibitednot Insiders or Related Insiders are permitted, but discouraged, from entering into hedging transactions involving Company securities and pledging or engaging in short sales related to the Company’s Common Stock. All other employees are discouraged from entering into hedging transactions and engaging in short sales related toCompany Common Stock.
The Company’s anti-pledging policy discourages any pledging of the Company’s Common Stock, including holding Common Stock in a margin account. In addition, Directors and the Company’s executive officers are required to obtain pre-approval from the Company’s General Counsel before pledging shares of Common Stock. Such approval will be granted only if the individual can clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities.
TheAs discussed above, the Company has adopted a Code of Business Conduct for Non-Employee Directors. In addition, the Company has adoptedDirectors, as well as a Code of Business Conduct which was relaunched in February 2018, that is applicable to the Company’s employees, including the Named Executive Officers. Our associates, bottling partners, suppliers, customers and consumers can ask questions about our Code and other ethics and compliance issues, or report potential violations, through EthicsLine, a global Internet and telephone information and reporting service. The Codes of Business Conduct and information about EthicsLine are available on the Company’s website atwww.coca-colacompany.com, by clicking on “Investors,” then “Corporate Governance” and then “Code of Business Conduct.” In the event the Company amends or waives any of the provisions of the Code of Business Conduct applicable to our principal executive officer, principal financial officer, principal accounting officer or controller that relates to any element of the definition of “code of ethics” enumerated in Item 406(b) of Regulation S-K under the 1934 Act, the Company intends to disclose these actions on the Company’s website.
2020 Proxy Statement 33
6 GOVERNANCEAdditional Governance Matters
View the Company’s Governance Materials
You can view the Company’s governance materials, including the Certificate of Incorporation, By-Laws, Corporate Governance Guidelines and Board Committee Charterscommittee charters on the Company’s website,www.coca-colacompany.com, by clicking on “Investors”“Investors,” then “Corporate Governance” and then “Corporate Governance.“Documents.” Instructions on how to obtain copies of these materials are included in the response to question 29,, onpage 96102.
The Board has established a process to facilitate communication by shareowners and other interested parties with Directors. Communications can be addressed to Directors in care of the Office of the Secretary, The Coca-Cola Company, P.O. Box 1734, Atlanta, Georgia 30301 or by e-mail toasktheboard@coca-cola.com.
Communications may be distributed to all Directors, or to any individual Director, as appropriate. At the direction of the Board, all mail received may be opened and screened for security purposes. In addition, items that are unrelated to the duties and responsibilities of the Board shallwill not be distributed. Such items include, but are not limited to:
spam;
junk mail and mass mailings;
product complaints or inquiries;
new product suggestions;
resumes and other forms of job inquiries;
surveys; and
business solicitations or advertisements.
●spam ●junk mail and mass mailings ●product complaints or inquiries | ●new product suggestions ●resumes and other forms of job inquiries | ●surveys ●business solicitations or advertisements |
In addition, material that is trivial, obscene, unduly hostile, threatening or illegal or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent, non-employee Director upon request.
To answer the many questions we receive about our Company and our products, we offer detailed information about common areas of interest on the “Contact Us”“FAQs” page of our website,www.coca-colacompany.com/contact-usfaqs.
34 The Coca-Cola Company
Director Compensation GOVERNANCE 6
DIRECTOR COMPENSATIONDirector Compensation
The Committee on Directors and Corporate Governance is responsible for reviewing and making recommendations to the Board regarding all matters pertaining to compensation paid to Directors for Board, Lead Independent Director, committee and committee chair services. Under the Committee on Directors and Corporate Governance’s charter, the Committee is authorized to engage consultants or advisors in connection with its review and analysis of Director compensation, although it did not engage any consultants or advisors in 2017. Directors who also serve as employees of the Company do not receive payment for service as Directors.service.
In making non-employee Director compensation recommendations, the Committee on Directors and Corporate Governance takes various factors into consideration, including, but not limited to, the responsibilities of Directors generally, as well as committee chairs, and the form and amount of compensation paid to Directors by comparable companies. The Board reviews the recommendations of the Committee on Directors and Corporate Governance and determines the form and amount of Director compensation.
Director compensation is provided under The Coca-Cola Company Directors’ Plan effective January 1, 2013 (the “Directors’ Plan”), which is described further below. The Committee on. Directors and Corporate Governance and the Board believe that the Directors’ Plan:
ties the majority of Directors’ compensation to shareowner interests because the value of share units fluctuates up or down depending on the stock price;
focuses on the long term, since the share units are not paid until after the Director leaves the Board; and
is equitable based on the work required of Directors serving an entitywho also serve as employees of the Company’s size and scope.Company do not receive payment for service as Directors.
In 2017, the Committee on Directors and Corporate Governance undertook a review of the compensation paid to our Directors relative to the Company’s comparator group (see page 61) and other publicly available information. Based on this review, the Committee on Directors and Corporate Governance recommended, and the Board agreed, that no changes should be made to Director compensation in 2017. There have been no increases in compensation paid to our Directors since 2013. Under the Directors’ Plan, 2017 annual compensation to non-employee Directors consisted of $50,000 paid in cash in quarterly installments and $200,000 credited in deferred share units. Non-employee Directors have the option of deferring all or a portion of their cash compensation into share units that are paid out in cash after leaving the Board. The number of share units awarded to non-employee Directors is equal to the number of shares of Common Stock that could be purchased on the open market for $200,000 on April 1 (or the immediately preceding business day if
April 1 is not a business day).
In 2019, non-employee Directors also received an annual equity retainer of $200,000, credited in deferred share units. The number of share units awarded is equal to the number of shares of Common Stock that could be purchased on the open market for $200,000 on April 1. Share units do not have voting rights but are credited with hypothetical dividends that are reinvested in additional units to the extent dividends on Common Stock are received by shareowners. Share units are credited with hypothetical dividends that are reinvested in additional units to the extent dividends on Common Stock are received by shareowners. Share units will be paid out in cash on the later of (i) January 15 of the year following the year in which the Director leaves the Board and (ii) six months after the Director leaves the Board. Directors may elect to take their payout in a lump sum or in up to five annual installments.
In addition, each non-employee Director who served as a committee chair in 2017 received an additional $20,000 in cash.
Directors do not receive fees for attending Board or committee meetings. Non-employee Directors are reimbursed for reasonable expenses incurred in connection with Board-related activities.
2020 Annual Compensation
Under the Committee on Directors and Corporate Governance charter, the Committee is authorized to engage consultants or advisors in connection with its review and analysis of Director compensation. In 2019, the Committee on Directors and Corporate Governance engaged Willis Towers Watson to evaluate the competitiveness of its Director compensation program. Based on the results of a competitive analysis, provided by Willis Towers Watson, the Committee determined, and the Board approved, the following adjustments to the Director compensation program effective January 1, 2020: (i) an increase in the annual cash retainer to $90,000; (ii) an increase in the annual cash retainer for the Audit Committee Chair to $30,000 and (iii) an increase in the annual cash retainer for the Talent and Compensation Committee Chair to $25,000. These adjustments were made to maintain the competitiveness of our Director compensation program relative to the Company’s comparator group (seepage 58), as the Board’s last increase in Director compensation (other than instituting an additional cash retainer for our Lead Independent Director) was in 2013.
Highlights of Director Compensation Program:
2020 Proxy Statement 35
6 GOVERNANCEDirector Compensation
The following table details the total compensation of the Company’s non-employee Directors for the year ended December 31, 2017.2019.
20172019 Director Compensation Table
Name1 (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) |
| Total ($) (h) | Fees Earned or Paid in Cash ($) (b) |
| Stock Awards ($) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) | Total ($) (h) | ||||||||||||
Herbert A. Allen | $ | 70,000 | $ | 200,000 | $ | 0 | $ | 0 | $ | 0 | $ | 281 |
| $ 270,281 | $70,000 | $200,000 | $0 | $0 | $0 | $105 | $ 270,105 | |||||||
Ronald W. Allen |
| 70,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 3,167 |
| 273,167 | ||||||||||||||
Ronald W. Allen2 | 70,000 | 200,000 | 0 | 0 | 0 | 3,209 | 273,209 | |||||||||||||||||||||
Marc Bolland |
| 50,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 198 |
| 250,198 | 50,000 | 200,000 | 0 | 0 | 0 | 5 | 250,005 | |||||||
Ana Botín |
| 50,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 198 |
| 250,198 | 50,000 | 200,000 | 0 | 0 | 0 | 105 | 250,105 | |||||||
Howard G. Buffett2 |
| 25,000 |
| 40,000 |
| 0 |
| 0 |
| 0 |
| 5,949 |
| 70,949 | ||||||||||||||
Richard M. Daley |
| 50,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 1,145 |
| 251,145 | ||||||||||||||
Richard M. Daley3 | 25,000 | 40,000 | 0 | 0 | 0 | 23,746 | 88,746 | |||||||||||||||||||||
Christopher C. Davis | 50,000 | 200,000 | 0 | 0 | 0 | 1,312 | 251,312 | |||||||||||||||||||||
Barry Diller |
| 70,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 3,027 |
| 273,027 | 70,000 | 200,000 | 0 | 0 | 0 | 944 | 270,944 | |||||||
Helene D. Gayle |
| 50,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 198 |
| 250,198 | 66,000 | 200,000 | 0 | 0 | 0 | 5 | 266,005 | |||||||
Alexis M. Herman |
| 70,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 8,882 |
| 278,882 | 70,000 | 200,000 | 0 | 0 | 0 | 36,344 | 306,344 | |||||||
Robert A. Kotick |
| 50,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 198 |
| 250,198 | 50,000 | 200,000 | 0 | 0 | 0 | 105 | 250,105 | |||||||
Maria Elena Lagomasino |
| 70,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 13,213 |
| 283,213 | 94,000 | 200,000 | 0 | 0 | 0 | 13,786 | 307,786 | |||||||
Sam Nunn |
| 70,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 41,887 |
| 311,887 | ||||||||||||||
Sam Nunn3 | 35,000 | 40,000 | 0 | 0 | 0 | 55,404 | 130,404 | |||||||||||||||||||||
Caroline J. Tsay | 50,000 | 200,000 | 0 | 0 | 0 | 2,396 | 252,396 | |||||||||||||||||||||
David B. Weinberg |
| 50,000 |
| 200,000 |
| 0 |
| 0 |
| 0 |
| 1,046 |
| 251,046 | 50,000 | 200,000 | 0 | 0 | 0 | 1,644 | 251,644 | |||||||
1 James Quincey and Muhtar Kent are Company employees and therefore receive no compensation under the Directors’ Plan. 2 Mr. Buffett did not stand for election at the 2017 Annual Meeting of Shareowners. Therefore, the information above reflects his service on the Board through April 25, 2017. |
1 | Mr. Quincey is a Company employee and therefore receives no compensation under the Directors’ Plan. Muhtar Kent was an employee of the Company who also served as Chairman of the Board from January 2019 through the 2019 Annual Meeting of Shareowners when he stepped down as Chairman and therefore received no compensation under the Directors’ Plan. |
2 | Mr. R. Allen is not standing for reelection at the 2020 Annual Meeting. |
3 | Messrs. Daley and Nunn did not stand for reelection at the 2019 Annual Meeting of Shareowners. |
Fees Earned or Paid in Cash (ColumnFEES EARNED OR PAID IN CASH (COLUMN (b))
The amounts reported in the Fees Earned or Paid in Cash column reflect the cash fees earned by each non-employee Director in 2017,2019, whether or not such fees were deferred. In addition to the $50,000 annual cash fees (or a prorated portion thereof), each of Mses. Gayle, Herman and Lagomasino, and Messrs. H. Allen, R. Allen, Diller and Nunn received an additional $20,000 for service as a committee chair.chair (or a prorated portion thereof). Ms. Lagomasino also received an additional $24,000 (a prorated portion of the $30,000 cash fee) for service as Lead Independent Director.
Ms.Mses. Botín and Tsay deferred a portion of their 2019 cash compensation into 799 and 106 share units, respectively. Ms. Lagomasino deferred her 2019 cash compensation into 1,992 share units. Messrs. Daley,R. Allen and Diller each deferred their 2019 cash compensation into 1,493 share units. Messrs. Davis, Kotick and Weinberg each deferred their 20172019 cash compensation into 1,1751,066 share units. Ms. Lagomasino and Messrs. R. Allen, DillerDaley and Nunn each deferred their 20172019 cash compensation into 1,646533 and 746 share units.units, respectively, which reflects a prorated number of share units due to their resignations. The number of share units is equal to the number of shares of Common Stock that could be purchased for the deferred amount based on the average of the high and low prices of a share of Common Stock on March 31, 2017.April 1, 2019, and for Ms. Lagomasino, April 24, 2019, with respect to the prorated portion of share units attributable to her for service as Lead Independent Director.
36 The Coca-Cola Company
Stock Awards Table of Contents
(ColumnDirector Compensation GOVERNANCE 6
STOCK AWARDS (COLUMN (c))
The amounts reported in the Stock Awards column reflect the grant date fair value associated with each non-employee Director’s share units that are required to be deferred under the Directors’ Plan, calculated in accordance with the provisions of the Financial Accounting Standards Board Accounting Standards Codification 718, Compensation–Stock Compensation (“ASC Topic 718”).
The table below shows the number of outstanding share units held by each non-employee Director and Mr. Buffett, who served on the Board for a portion of 2017, as of December 29, 2017, the last trading day of the year.31, 2019.
| Outstanding Share Units
| |
Director | as of 12/31/2019 | |
Mr. H. Allen |
| 102,850 |
Mr. R. Allen |
| 107,515 |
Mr. Bolland |
| 25,185 |
Ms. Botín |
| 40,835 |
Mr. |
| 49,284 |
Mr. |
| 9,380 |
Mr. Diller |
| 144,884 |
Ms. Gayle |
| 36,372 |
Ms. Herman |
| 60,953 |
Mr. Kotick |
| 51,394 |
Ms. Lagomasino |
| 70,278 |
Mr. Nunn |
| 169,778 |
Ms. Tsay | 8,390 | |
Mr. Weinberg |
| 30,030 |
All Other Compensation (ColumnALL OTHER COMPENSATION (COLUMN (g))
As described further below, theThe amounts reported in the All Other Compensation column reflect, where applicable, Company matching gifts to nonprofit organizations, medical and dental insurance, the costs of Company products provided to Directors without charge, certain amenities and gifts provided to Directors in a connection with a Board meeting and a global system meeting, and the premiums for life insurance (including accidental death and dismemberment and business travel accident coverage)., the costs of Company products provided to Directors without charge, gifts provided to Directors in connection with a global system meeting, medical and dental insurance, and gifts provided to certain Directors in connection with their retirement. In addition, infrequently, spouses and guests of Directors may ride alongtravel on Company aircraft for personal reasons when the aircraft is already going to a specific destination for a business reason, which has minimal incremental cost to the Company. When this occurs, a nominal amount is included in the All Other Compensation column. In addition, income is imputed to the Director for income tax purposes and the Director is not provided a tax reimbursement.
PerquisitesFurther described below are those perquisites and Other Personal Benefitsother personal benefits and all other compensation required by SEC rules to be separately identified for 2019.
CHARITABLE CONTRIBUTIONS
The Directors are eligible to participate in the Company’s matching gifts program, which is the same program available to all U.S.-based employees and retirees. In 2017,2019, this program matched up to $10,000 of charitable contributions on a two-for-one basis to tax-exempt arts, cultural, environmental and educational organizations. The amounts paid by the Company to match gifts made by the non-employee Directors in 20172019 under this program are set forth in the table below. The total cost of matching contributions on behalf of the non-employee Directors for 2017 gifts2019 was $22,000.$62,000.
Name | Matching Gifts | ||
Mr. R. Allen | $ | 2,000 | |
Mr. Daley | 20,000 | ||
Ms. Herman | 20,000 | ||
Mr. Nunn | 20,000 |
2020 Proxy Statement 37
Name | Matching Gifts | |
Mr. R. Allen | $ | 2,000 |
Mr. Nunn |
| 20,000 |
6 GOVERNANCEDirector Compensation
INSURANCE PREMIUMS
For Directors who elected coverage prior to 2006 (Mr.(Messrs. R. Allen, Diller and Nunn), the Company provides medical and dental coverage on the same terms and at the same cost as available to U.S. Company employees. This coverage was discontinued in 2006 for all other Directors. The total cost for this health coverage in 2017 was $11,561.
To help expand the Directors’ knowledge of the Company’s products, the Company provides certain products to Directors’ offices without charge. The total cost incurred by the Company in 2017 for products provided to non-employee Directors was $40,897.
In connection with a Board meeting and a global system meeting, Directors received certain amenities and gifts, the total cost of which was $2,656.
For Directors who elected coverage prior to 2006, the Company provides life insurance coverage, which includes $30,000 term life insurance and $100,000 group accidental death and dismemberment insurance. This coverage was discontinued in 2006 for all other Directors. The Company cost for this insurance for participating non-employee Directors is set forth in the table below. The total cost for these insurance benefits to the participating non-employee Directors in 20172019 was $2,158.$738 per Director, for a total cost of $2,214.
Name | Life Insurance Premiums | |
Mr. R. Allen | $ | 738 |
Mr. Diller |
| 682 |
Mr. Nunn |
| 738 |
Business travel accident insurance coverage of $200,000 is provided to all non-employee Directors while traveling on Company business, at a Company cost of $1$5 per Director per year.
BackPERQUISITES AND OTHER PERSONAL BENEFITS
To help expand the Directors’ knowledge of the Company’s products, the Company provides certain products to ContentsDirectors’ offices without charge. In 2019, Mses. Herman, Lagomasino and Tsay, and Messrs. R. Allen, Daley, Davis, Diller, Nunn and Weinberg participated in this program. The total cost incurred by the Company in 2019 for products provided to non-employee Directors was $51,684.
In connection with a global system meeting held outside the United States in 2019, all of the non-employee Director attendees (Mses. Botín, Herman, Lagomasino, Tsay and Messrs. H. Allen, R. Allen, Diller, Kotick and Weinberg) received certain gifts, the total cost of which was approximately $900.
For Directors who elected coverage prior to 2006 (Mr. Nunn), the Company provides medical and dental coverage on the same terms and at the same cost as available to U.S. Company retirees. This coverage was discontinued in 2006 for all other Directors. The total cost for this health coverage in 2019 was $13,782.
In connection with their retirements, the Company provided commemorative gifts to Messrs. Daley and Nunn for recognition of their Board service, the total cost of which was $8,063.
38 The Coca-Cola Company
Director Independence and Related Person Transactions GOVERNANCE 6
DIRECTOR INDEPENDENCE AND RELATED PERSON TRANSACTIONSDirector Independence and Related Person Transactions
Under the corporate governance listing standards of the NYSE and the Company’s Corporate Governance Guidelines, the Board must consist of a majority of independent Directors. In making independence determinations, the Board observes NYSE and SEC criteria and considers all relevant facts and circumstances. Under NYSE corporate governance listing standards, to be considered independent:
● | the Director must not have a disqualifying relationship, as defined in the NYSE standards; and |
● | the Board must affirmatively determine that the Director otherwise has no material relationship with the Company directly, or as an officer, shareowner or partner of an organization that has a relationship with the Company. To aid in the Director independence assessment process, the Board has adopted categorical standards that identify categories of relationships that the Board has determined would not affect a Director’s independence. These categorical standards, which are part of the Company’s Corporate Governance Guidelines, are described below. |
the Director must not have a disqualifying relationship, as defined in the NYSE standards; and
the Board must affirmatively determine that the Director otherwise has no material relationship with the Company directly, or as an officer, shareowner or partner of an organization that has a relationship with the Company. To aid in the Director independence assessment process, the Board has adopted categorical standards that identify categories of relationships that the Board has determined would not affect a Director’s independence. These categorical standards, which are part of the Company’s Corporate Governance Guidelines, are described below.
Categorical StandardsCATEGORICAL STANDARDS
The following will not be considered material relationships that would impair a Director’s independence:
Immaterial | The Director is an executive officer or employee or any member of his or her immediate family is an executive officer of any other organization that does business with the Company and the annual sales to, or purchases from, the Company are less than $1 million or 1% of the consolidated gross revenues of such organization, whichever is more. | |
Immaterial | The Director or any member of his or her immediate family is an executive officer of any other organization which is indebted to the Company, or to which the Company is indebted, and the total amount of either company’s indebtedness to the other is less than $1 million or 1% of the total consolidated assets of the organization on which the Director or any member of his or her immediate family serves as an executive officer, whichever is more. | |
Immaterial | The Director is a director or trustee, but not an executive officer, or any member of his or her immediate family is a director, trustee or employee, but not an executive officer, of any other organization (other than the Company’s outside auditing firm) that does business with, or receives donations from, the Company. | |
Immaterial | The Director or any member of his or her immediate family holds a less than 10% interest in any other organization that has a relationship with the Company. | |
Immaterial | The Director or any member of his or her immediate family serves as an executive officer of a charitable or educational organization which receives contributions from the Company in a single fiscal year of less than $1 million or 2% of that organization’s consolidated gross revenues, whichever is more. |
In addition, when determining Director independence, the Board does not consider transactions:
with entities for which a Director or an immediate family member served only as a director or trustee;
of less than $120,000; and
with entities in which the Director’s or an immediate family member’s only interest is a less than 10% ownership interest.
● | with entities for which a Director or an immediate family member served only as a director or trustee; |
● | of less than $120,000; and |
● | with entities in which the Director’s or an immediate family member’s only interest is a less than 10% ownership interest. |
The Board, through its Committee on Directors and Corporate Governance, annually reviews all relevant business relationships any Director nominee and any person who served as a Director during 20172019 may have with the Company. As a result of its annual review, the Board has determined that none of the following Director nominees has a material relationship with the Company and, as a result, such Director nominees are independent: Ronald W. Allen, Marc Bolland, Ana Botín, Richard M. Daley, Christopher C. Davis, Barry Diller, Helene D. Gayle, Alexis M. Herman, Robert A. Kotick, Maria Elena Lagomasino, Sam Nunn, Caroline J. Tsay and David B. Weinberg. In addition, the Board determined that Howard G. Buffett,Ronald W. Allen, who servedwill serve as a Director for a portion of 2017, wasuntil the 2020 Annual Meeting, is independent. None of the Directors who were determined to be independent had any relationships that were outside the categorical standards identified above.
Muhtar Kent is Chairman of the Board and also served as the Company’s Chief Executive Officer through April 30, 2017 and therefore is not an independent Director. James Quincey has served as the Company’s President and Chief Executive Officer since May 1, 2017, and therefore is not an independent Director. Even though Herbert A. Allen is not currently determined to be independent, he contributes greatly to the Board and the Company through his wealth of experience, expertise and judgment.
2020 Proxy Statement 39
6 GOVERNANCEDirector Independence and Related Person Transactions
All of the Directors who serve as members of the Audit Committee, Talent and Compensation Committee and Committee on Directors and Corporate Governance are independent as required by the NYSE corporate governance rules. Under these rules, Audit Committee members also satisfy the separate SEC and NYSE independence requirements, and the Talent and Compensation Committee members satisfy the additional SEC and NYSE independence requirements.
The table below summarizes the relationships that were considered in connection with the independence determinations. None of the transactions described below were considered material relationships that impacted the applicable Director’s independence.
Director | Categorical Standard | Description of Relationship | ||
AnaBotín | Immaterial Sales/ Purchases Immaterial Indebtedness | The Board examined the Company’s relationship with Banco Santander, S.A. (“Banco Santander”) where Ana Botín, one of our Directors, is Executive Chair. The Board determined that the relationship was not material since (i) the amounts involved were less than 1% of the consolidated gross revenues of Banco | ||
| Immaterial Sales/ Purchases |
| ||
|
| The Board examined payments made by the Company to IAC/InterActiveCorp and its subsidiaries (“IAC”) where Barry Diller, one of our Directors, is Chairman of the Board and Senior Executive. The Board determined that the relationship was not material since (i) the amounts involved were less than 1% of the consolidated gross revenues of IAC; (ii) the payments were for online advertising and digital media promotions in the ordinary course of business; and (iii) the Company has had a relationship with IAC’s predecessor companies for many years prior to Mr. Diller’s service as a Director of the Company. | ||
Robert A. Kotick | Immaterial Sales/ Purchases | The Board examined the Company’s relationship with Activision Blizzard, Inc. and its subsidiaries (“Activision”) where Robert A. Kotick, one of our Directors, is Chief Executive Officer and a Director. The Board determined that the relationship was not material since (i) the amounts payable under sponsorship agreements entered into in the ordinary course of business represent less than 1% of the consolidated gross revenues of Activision; and (ii) the Company has had a relationship with Activision prior to Mr. Kotick’s service as a Director of the Company. |
Related Person Transaction Policy and ProcessRELATED PERSON TRANSACTION POLICY AND PROCESS
A “Related Person Transaction” is aany transaction, arrangement or relationship, (oror any series of similar transactions, arrangements or relationships)relationships, in which the Company (including any of its subsidiaries) was, is or will be a participant and, as relates to Directors or shareowners who have an ownership interest in the Company of more than 5%, the amount involved exceeds $120,000, and in which any Related Person (defined below) had, has or will have a direct or indirect material interest. Under Company policy, there is no threshold amount applicable to executive officers with regard to Related Person Transactions.
A “Related Person” means:
● | any person who is, or at any time during the applicable period was, a Director, a nominee for Director or an executive officer of the Company; |
● | any person who is known to the Company to be the beneficial owner of more than 5% of the outstanding Common Stock; |
● | any immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of the Director, nominee for Director, executive officer or more than 5% beneficial owner of Common Stock, and any person (other than a tenant or employee) sharing the household of such Director, nominee for Director, executive officer or more than 5% beneficial owner of Common Stock; or |
● | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
40 The Coca-Cola Company
any person who is, or at any time during the applicable period was, a Table of Contents
Director of the Company or a nominee for Director or an executive officer;
any person who is known to the Company to be the beneficial owner of more than 5% of the outstanding Common Stock;
any immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of the Director, nominee for Director, executive officer or more than 5% beneficial owner of Common Stock,Independence and any person (other than a tenant or employee) sharing the household of such Director, nominee for Director, executive officer or more than 5% beneficial owner of Common Stock; andRelated Person Transactions GOVERNANCE 6
any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
In general, the Company will enter into or ratify Related Person Transactions with Directors only when the Board, acting through the Committee on Directors and Corporate Governance, determines that the Related Person Transaction is reasonable and fair to the Company. When considering whether a Related Person Transaction is reasonable and fair to the Company, the Committee considers, among other things, the evaluation of the transaction by employees directly involved and the recommendation of the Chief Financial Officer. In addition, any Related Person Transaction involving an executive officer must be pre-approved by the Chief Executive Officer and any Related Person Transaction involving the Chairman of the Board (if an employee of the Company), Chief Executive Officer or a beneficial owner of more than 5% of the outstanding Common Stock must be submitted to the Audit Committee for approval.
Many transactions that constitute Related Person Transactions are ongoing, and some arrangements predate any relationship with the Director or predate the Director’s relationship with the Company. When a transaction is ongoing, any amendments or changes are reviewed, and the transaction is reviewed annually for reasonableness and fairness to the Company.
Identifying possible Related Person Transactions involves the following procedures:
Directors, Director nominees, executive officers and beneficial owners of more than 5% of the outstanding Common Stock are asked to complete customary annual questionnaires.
Directors and Director nominees are required to annually verify and update information about (i) where the Director is an employee, director or executive officer; (ii) each entity where an immediate family member of a Director is an executive officer; (iii) each firm, corporation or other entity in which the Director or an immediate family member is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest; and (iv) each charitable or educational organization where the Director or an immediate family member is an employee, executive officer, director or trustee.
● | Directors, Director nominees, executive officers and beneficial owners of more than 5% of the outstanding Common Stock are asked to complete customary annual questionnaires. |
● | Directors and Director nominees are required to annually verify and update information about (i) where the Director is an employee, director or executive officer; (ii) each entity where an immediate family member of a Director is an executive officer; (iii) each firm, corporation or other entity in which the Director or an immediate family member is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest; and (iv) each charitable or educational organization where the Director or an immediate family member is an employee, executive officer, director or trustee. |
When the Company receives the requested information from its Directors, Director nominees, executive officers and beneficial owners of more than 5% of the outstanding Common Stock, the Company compiles a list of all persons and entities, including all subsidiaries of the entities identified, that may give rise to a Related Person Transaction. The Office of the Secretary reviews the updated list and expands the list if necessary, based on a review of SEC filings, Internet searches and applicable websites.
For 2017,2019, the list of approximately 3,9004,800 persons and entities was distributed within the Company to identify any potential transactions. This list was also sent to each of the Company’s approximately 400300 accounting locations to be compared to payments and receipts. All ongoing transactions, along with payment and receipt information, were compiled for each person and entity. The information was reviewed and relevant information was presented to the Committee on Directors and Corporate Governance or the Audit Committee, as applicable.
Details regarding Related Person Transactions are included in the charters for the Committee on Directors and Corporate Governance and the Audit Committee and in our Codes of Business Conduct. These documents can be found on the Company’s website,www.coca-colacompany.com, by clicking on “Investors” and then clicking on “Corporate Governance.”
Certain Related Person TransactionsRELATED PERSON TRANSACTIONS
The Board, acting through the Committee on Directors and Corporate Governance believes that the following related person transactions areRelated Person Transaction between the Company and Mr. H. Allen, one of our Directors, is reasonable and fair to the Company.
HerbertA.Mr. H. Allen. Herbert A. Allen, one of our Directors, is President, Chief Executive Officer and a Director of Allen & Company Incorporated (“ACI”) and a principal shareowner of ACI’s parent. ACI is an indirect equity holder of Allen & Company LLC (“ACL”).
ACI has leased and subleased office space in New York City since 1977 in a building owned by one of our subsidiaries and located in New York City.subsidiaries. ACI was a tenant prior to the subsidiary’s acquisition of the building. In June 2005, ACI assigned the lease and sublease to ACL. In November 2015, the lease was renewed for a term of approximately 18 years. In 2017,August 2019, our subsidiary sold the property to an unaffiliated third party. In 2019, ACL paid approximately $6.4$3.4 million in rent and related expenses. In the opinion of management, the terms of the lease arewere fair and reasonable and as favorable to the Company as those that could have been obtained from unrelated third parties at the time of the execution of the lease.
Howard2020 Proxy StatementG. 41
BuffettandBerkshireHathaway. The fatherTable of Howard G. Buffett, who served as a DirectorContents
7 | Share Ownership |
Ownership of Equity Securities of the Company for a portion of 2017, is Warren E. Buffett, Chairman of the Board, Chief Executive Officer and major stockholder of Berkshire Hathaway. Berkshire Hathaway’s holdings constituted 9.38% of the Company’s outstanding Common Stock as of February 26, 2018.
Burlington Northern Santa Fe, LLC (“BNSF”) is a wholly owned subsidiary of Berkshire Hathaway. In 2017, the Company paid BNSF approximately $204,000 in demurrage fees in the ordinary course of business.
Business Wire, Inc. (“Business Wire”) is a wholly owned subsidiary of Berkshire Hathaway. In July 2015, the Company and Business Wire entered into a new three-year services agreement under which Business Wire disseminates news releases for the Company. In 2017, the Company paid approximately $169,000 to Business Wire in the ordinary course of business. This business relationship was in place prior to Berkshire Hathaway’s acquisition of Business Wire in 2006.
FlightSafety International Inc. (“FlightSafety”) is a wholly owned subsidiary of Berkshire Hathaway. In 2014, the Company entered into a new five-year agreement with FlightSafety to provide pilot training services to the Company and a new three-year agreement with FlightSafety to provide flight attendant and mechanic training services to the Company. In 2016, the Company entered into a new three-year agreement with FlightSafety to provide flight attendant and mechanic training services to the Company, which replaced the previous three-year agreement. In 2017, the Company paid FlightSafety approximately $569,000 for training services in the ordinary course of business.
International Dairy Queen, Inc. (“IDQ”) is a wholly owned subsidiary of Berkshire Hathaway. In 2017, IDQ and its subsidiaries received promotional and marketing incentives from the Company totaling approximately $1.7 million in the ordinary course of business. This business relationship was in place for many years prior to Berkshire Hathaway’s acquisition of IDQ.
McLane Company, Inc. (“McLane”) is a wholly owned subsidiary of Berkshire Hathaway. In 2017, McLane and its subsidiaries paid approximately $914 million to the Company to purchase fountain syrup and other products in the ordinary course of business. Also in 2017, McLane and its subsidiaries received from the Company approximately $17 million in agency commissions, marketing payments and other fees relating to the sale of the Company’s products to customers in the ordinary course of business. This business relationship was in place for many years prior to Berkshire Hathaway’s acquisition of McLane in 2003.
Marmon Holdings, Inc. (“Marmon”) is a wholly owned subsidiary of Berkshire Hathaway. In January 2014, Marmon acquired Cornelius, Inc., Display Technologies, LLC and 3Wire Group, Inc. In 2017, the Company paid Cornelius, Inc. approximately $5.1 million for fountain equipment under a 2006 master agreement, which is renewed on an annual basis. In 2017, the Company paid Display Technologies, LLC approximately $2.3 million for shelving for in-store promotional
programs under a three-year supply agreement entered into in February 2014. The term of this agreement was extended to December 31, 2017. In 2017, the Company paid 3Wire Group, Inc. approximately $14 million for fountain equipment parts under a 2005 master agreement, which is renewed on an annual basis. These business relationships were in place for many years prior to Marmon’s acquisition of these three entities and all payments were made in the ordinary course of business.
XTRA Lease LLC (“XTRA”) is a wholly owned subsidiary of Berkshire Hathaway. In 2017, the Company paid XTRA approximately $267,000 for the rental of trailers used to transport and store finished product in the ordinary course of business under the terms of a national account agreement with XTRA.
Berkshire Hathaway holds a significant equity interest in American Express Company (together with its subsidiaries, “American Express”). In 2013, the Company and American Express entered into a new five-year agreement under which American Express provides global credit card services to the Company. In 2017, American Express paid the Company approximately $1.3 million in rebates and incentives under the terms of the agreement and in the ordinary course of business.
Berkshire Hathaway holds a significant equity interest in Moody’s Corporation (“Moody’s”). In 2012, the Company and a subsidiary of Moody’s entered into a two-year agreement for rating services related to the Company’s commercial paper programs and debt offerings, which was renewed in 2015 for an additional two-year period. In 2017, the Company paid a subsidiary of Moody’s fees of approximately $1.5 million for rating services.
Berkshire Hathaway held a significant equity interest in Wells Fargo & Company (together with its subsidiaries, “Wells Fargo”) during a portion of 2017. In 2017, the Company paid Wells Fargo approximately $953,000 for commercial banking and equipment leasing services in the ordinary course of business.
In the opinion of management, all of the relationships between the Company and the entities affiliated with Berkshire Hathaway described above are fair and reasonable and as favorable to the Company as those that could have been obtained from unrelated third parties.
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
Directors and Executive Officers
The following table sets forth information regarding beneficial ownership of Common Stock by each Director, each Director nominee, each individual named in the 20172019 Summary Compensation Table onpage 6569, and our Directors Director nominees and executive officers as a group, all as of February 26, 2018.24, 2020. Unless otherwise noted, voting power and investment power in Common Stock are exercisable solely by the named person.
Name | Aggregate Number Beneficially | Percent of Outstanding
| Additional Information | |||
Herbert A. Allen |
|
| * | Includes 6,000,000 shares held by ACI, 31,045 shares held by 12 trusts of which Mr. Allen, in each case, is one of three to five trustees, and 30,000 shares held by a foundation of which he is one of six directors. Mr. Allen disclaims beneficial ownership of the 30,000 shares held by the foundation. Also includes 37,531 shares held by a family member over which Mr. Allen has disclaimed beneficial ownership. Does not include | ||
Ronald W. Allen |
|
| * | Includes 4,000 shares held by a family member over which Mr. Allen has disclaimed beneficial ownership. Does not include | ||
Marc Bolland |
|
| * | Does not include | ||
AnaBotín |
|
| * | Shares held by a Spanish limited company of which Ms. Botín and her husband are the indirect beneficial owners. Does not include | ||
|
|
|
| Does not include | ||
|
|
| ||||
|
|
| Includes 4,000,000 shares held by a trust of which Mr. Diller is sole trustee and beneficiary and 2,000,000 shares that may be acquired by this trust upon the exercise of call options, purchased from an unrelated third party, which are presently exercisable. Does not include | |||
Helene D. Gayle |
|
| * | Does not include | ||
Alexis M. Herman |
|
| * | Does not include | ||
Robert A. Kotick |
|
| * | Includes 18 shares held by a family | ||
Maria Elena |
|
| * | Does not include | ||
|
|
| * | Does not include |
42 The Coca-Cola Company
Ownership of Equity Securities of the Company SHARE OWNERSHIP 7
Name | Aggregate Number of Shares Beneficially Owned | Percent of Outstanding Shares1 | Additional Information | |||
David B. Weinberg | 11,419,285 | * | Includes 776,930 shares held by family members over which Mr. Weinberg has sole dispositive power and 1,152,930 shares held by a family member’s living trust, of which Mr. Weinberg is one of three trustees and is a contingent remainder beneficiary but over which he also has sole dispositive power. Also includes 2,466,558 shares held by a family member’s marital grantor trust, of which Mr. Weinberg is one of three trustees and contingent remainder beneficiaries but over which he also has sole dispositive power, and 3,000,000 shares held by three family trusts, of which Mr. Weinberg is a current or contingent remainder beneficiary and one of three trustees but over which he also has sole dispositive power. Also includes 12,000 shares held by a family trust, of which Mr. Weinberg is neither a trustee nor a beneficiary but over which he has sole dispositive power. Also includes 3,540,000 shares held by two family limited partnerships, over which Mr. Weinberg has sole investment control and shares beneficial ownership interest. Also includes 48,888 shares held by two foundations, over which Mr. Weinberg shares investment power with other family members but over which he also has sole dispositive power, and 39,065 shares held by two foundations, over which other family members have investment power but over which Mr. Weinberg also has sole dispositive power. Does not include 30,030 share units deferred under the Directors’ Plan, which are settled in cash. | |||
James Quincey | 1,853,004 | * | Includes 44,678 shares held by a family member, 3,724 shares credited to Mr. Quincey under The Coca-Cola Company 401(k) Plan (the “401(k) Plan”), 200 shares of restricted stock and 1,599,841 shares that may be acquired upon the exercise of options which are presently exercisable or that will become exercisable on or before April 24, 2020. Does not include 8,382 share units credited under The Coca-Cola Company Supplemental 401(k) Plan (the “Supplemental 401(k) Plan”), which are settled in cash post employment. Also does not include 195,973 unvested performance share units, which will be settled in shares upon vesting. | |||
John Murphy | 871,994 | * | Includes 2,143 shares held by a family member, 200 shares of restricted stock and 781,363 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 24, 2020. Does not include 57,683 unvested performance share units, which will be settled in shares upon vesting. | |||
Kathy N. Waller | 1,248,635 | * | Includes 1,081,166 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 24, 2020. Does not include 90,638 unvested performance share units, which will be settled in shares upon vesting. | |||
Manuel Arroyo | 67,874 | * | Includes 63,057 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 24, 2020. | |||
James L. Dinkins | 219,050 | * | Includes 3,207 shares credited to Mr. Dinkins under the 401(k) Plan and 172,604 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 24, 2020. Does not include 4,771 share units credited under the Supplemental 401(k) Plan, which are settled in cash post employment. Also does not include 32,195 unvested performance share units, which will be settled in shares upon vesting. | |||
Brian J. Smith | 1,143,508 | * | Includes 36,225 shares credited to Mr. Smith under the 401(k) Plan, 200 shares of restricted stock and 1,013,610 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 24, 2020. Does not include 15,911 share units credited under the Supplemental 401(k) Plan, which are settled in cash post employment. Also does not include 76,989 unvested performance share units, which will be settled in shares upon vesting. | |||
All Directors and executive officers as a group (25 persons) | 43,290,728 | 1.01% | Includes 79,631 shares credited under the 401(k) Plan, 800 shares of restricted stock and 8,622,546 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 24, 2020. Does not include 52,106 share units credited under the Supplemental 401(k) Plan and 688,066 share units deferred under the Directors’ Plan, all of which will be settled in cash. Also does not include 580,796 unvested performance share units and 17,517 unvested restricted stock units, which will be settled in shares upon vesting. |
* | Less than 1% of outstanding shares of Common Stock. | |||
|
|
| Share units credited under the Directors’ Plan and the Supplemental 401(k) Plan are not included as outstanding shares in calculating these percentages. Unvested performance share units and unvested restricted stock units, which will be settled in shares upon vesting, also are not included. |
2020 Proxy Statement 43
Name | Aggregate Number of Shares Beneficially Owned | Percent of Outstanding Shares1 |
| Additional Information |
David B. Weinberg | 11,419,285 | * |
| Includes 776,930 shares held by family members over which Mr. Weinberg has sole dispositive power and 1,152,930 shares held by a family member’s living trust, of which Mr. Weinberg is one of three trustees and is a contingent remainder beneficiary but over which he also has sole dispositive power. Also includes 2,466,558 shares held by a family member’s marital grantor trust, of which Mr. Weinberg is one of three trustees and contingent remainder beneficiaries but over which he also has sole dispositive power, and 3,000,000 shares held by three family trusts, of which Mr. Weinberg is a current or contingent remainder beneficiary and one of three trustees but over which he also has sole dispositive power. Also includes 39,700 shares held by two family trusts, of which Mr. Weinberg is neither a trustee nor a beneficiary but over which he has sole dispositive power. Also includes 3,540,000 shares held by two family limited partnerships, over which Mr. Weinberg has sole investment control and shares beneficial ownership interest. Also includes 48,888 shares held by two foundations, over which Mr. Weinberg shares investment power with other family members but over which he also has sole dispositive power, and 39,065 shares held by two foundations, over which other family members have investment power but over which Mr. Weinberg also has sole dispositive power. Does not include 17,252 share units deferred under the Directors’ Plan, which are settled in cash. |
Muhtar Kent | 13,433,358 | * |
| Includes 281,300 shares held by a foundation, of which Mr. Kent, his wife and children are trustees, 129,000 shares held by a trust of which Mr. Kent’s wife and his children are beneficiaries and an independent trust company is trustee and 134,000 shares held by a trust of which Mr. Kent and his children are beneficiaries and an independent trust company is trustee. Also includes 85,444 shares credited to Mr. Kent under The Coca-Cola Company 401(k) Plan (the “401(k) Plan”) and 12,093,878 shares that may be acquired upon the exercise of options which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 71,474 share units credited under The Coca-Cola Company Supplemental 401(k) Plan (the “Supplemental 401(k) Plan”) which are settled in cash post employment. Also does not include 168,893 unvested performance share units, which will be settled in shares upon vesting. |
James Quincey | 1,088,472 | * |
| Includes 44,678 shares held by a family member, 2,156 shares credited to Mr. Quincey under the 401(k) Plan, 200 shares of restricted stock and 989,702 shares that may be acquired upon the exercise of options which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 500 share units credited under the Supplemental 401(k) Plan, which are settled in cash post employment. Also does not include 38,316 unvested performance share units and 72,838 unvested restricted stock units, which will be settled in shares upon vesting. |
Kathy N. Waller | 1,148,144 | * |
| Includes 16,702 shares credited to Ms. Waller under the 401(k) Plan, 200 shares of restricted stock and 1,041,978 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 8,547 share units credited under the Supplemental 401(k) Plan, which are settled in cash post employment. Also does not include 65,331 unvested performance share units, which will be settled in shares upon vesting. |
Marcos de Quinto | 1,060,464 | * |
| Includes 200 shares of restricted stock and 868,103 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 62,491 unvested performance share units, which will be settled in shares upon vesting. |
J. Alexander M. Douglas, Jr. | 1,660,913 | * |
| Includes 2,800 shares held by a family member, 12,005 shares credited to Mr. Douglas under the 401(k) Plan and 1,428,956 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 26,936 share units credited under the Supplemental 401(k) Plan, which are settled in cash post employment. Also does not include 62,195 unvested performance share units, which will be settled in shares upon vesting. |
Irial Finan | 3,716,637 | * |
| Includes 2,322 shares credited to Mr. Finan under the 401(k) Plan and 3,329,667 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 3,684 share units credited under the Supplemental 401(k) Plan, which are settled in cash post employment. Also does not include 61,533 unvested performance share units, which will be settled in shares upon vesting. |
All Directors and executive officers as a group | 63,571,631 | 1.48% |
| Includes 204,733 shares credited under the 401(k) Plan, 1,400 shares of restricted stock and 27,091,864 shares that may be acquired upon the exercise of options, which are presently exercisable or that will become exercisable on or before April 27, 2018. Does not include 157,241 share units credited under the Supplemental 401(k) Plan and 715,819 share units deferred under the Directors’ Plan, all of which will be settled in cash. Also does not include 622,787 unvested performance share units and 82,616 unvested restricted stock units, which will be settled in shares upon vesting. |
* Less than 1% of outstanding shares of Common Stock. 1 Share units credited under the Directors’ Plan and the Supplemental 401(k) Plan are not included as outstanding shares in calculating these percentages. Unvested performance share units and restricted stock units, which will be settled in shares upon vesting, also are not included. |
7 SHARE OWNERSHIPDelinquent Section 16(a) Reports
Principal Shareowners
Set forth in the table below is information about the number of shares held by persons we know to be the beneficial owners of more than 5% of the outstanding shares of Common Stock.
Name and Address | Aggregate Number of Shares Beneficially Owned | Percent of Outstanding Shares4 |
Berkshire Hathaway Inc.1 | 400,000,000 | 9.38% |
The Vanguard Group2 | 284,276,178 | 6.67% |
BlackRock, Inc.3 | 241,978,756 | 5.67% |
1 Berkshire Hathaway, a diversified holding company, has informed the Company that, as of December 31, 2017, it held an aggregate of 400,000,000 shares of Common Stock through subsidiaries. 2 The information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 9, 2018, reporting beneficial ownership as of December 31, 2017. The Vanguard Group reported that it has sole voting power with respect to 5,526,983 shares of Common Stock, sole dispositive power with respect to 277,901,284 shares of Common Stock, shared voting power with respect to 983,090 shares of Common Stock and shared dispositive power with respect to 6,374,894 shares of Common Stock. 3 The information is based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 8, 2018, reporting beneficial ownership as of December 31, 2017. BlackRock, Inc. reported that it has sole voting power with respect to 208,080,766 shares of Common Stock, sole dispositive power with respect to 241,978,756 shares of Common Stock and no shared voting or dispositive power. 4 The ownership percentages set forth in this column are based on the assumption that each of the principal shareowners continued to own the number of shares reflected in the table above on February 26, 2018. |
Name and Address | Aggregate Number of Shares Beneficially Owned | Percent of Outstanding Shares4 | ||
Berkshire Hathaway Inc.1 3555 Farnam Street Omaha, Nebraska 68131 | 400,000,000 | 9.32% | ||
The Vanguard Group2 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 317,271,500 | 7.39% | ||
BlackRock, Inc.3 55 East 52nd Street New York, New York 10055 | 274,136,686 | 6.39% |
1 | Berkshire Hathaway Inc., a diversified holding company, has informed the Company that, as of December 31, 2019, it held an aggregate of 400,000,000 shares of Common Stock through subsidiaries. |
2 | The information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 12, 2020, reporting beneficial ownership as of December 31, 2019. The Vanguard Group reported that it has sole voting power with respect to 5,958,601 shares of Common Stock, sole dispositive power with respect to 310,442,366 shares of Common Stock, shared voting power with respect to 1,247,472 shares of Common Stock and shared dispositive power with respect to 6,829,134 shares of Common Stock. |
3 | The information is based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 5, 2020, reporting beneficial ownership as of December 31, 2019. BlackRock, Inc. reported that it has sole voting power with respect to 236,106,718 shares of Common Stock, sole dispositive power with respect to 274,136,686 shares of Common Stock and no shared voting or dispositive power. |
4 | The ownership percentages set forth in this column are based on the assumption that each of the principal shareowners continued to own the number of shares reflected in the table above on February 24, 2020. |
SECTIONDelinquent Section 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEReports
Section 16(a) of the 1934 Act requires the Company’s Directors and certain officers, as well as persons who beneficially own more than 10% of the outstanding shares of Common Stock, to file reports regarding their initial stock ownership and subsequent changes to their ownership with the SEC.
Based solely upon ouron a review of the reports filed for fiscal year 20172019 and related written representations, that no other reports were required, we believe that all Section 16(a) reports were filed on a timely basis.basis, except for a late filing of a Form 4 to report the acquisition of deferred share units by Maria Elena Lagomasino and the late filing of a Form 4 to report an option exercise by Lisa Chang’s husband. Additionally, each of Francisco Crespo, James L. Dinkins, Bernhard Goepelt, Robert Long, John Murphy, Alfredo Rivera and Brian J. Smith filed an amended Form 4 on May 24, 2019 to correct, due to an inadvertent administrative error, the number of options granted on February 15, 2018.
44 The Coca-Cola Company
Compensation |
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
What am I voting on?
Shareowners are being asked to approve, on an advisory basis, the compensation of the Named Executive Officers as described in the Compensation Discussion and Analysis beginning on page 46 and the Compensation Tables beginning on page 65.
Voting recommendation:
ITEM 2 | ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION |
WHAT AM I VOTING ON? Shareowners are being asked to approve, on an advisory basis, the compensation of the Named Executive Officers as described in the Compensation Discussion and Analysis beginning onpage 46 and the Compensation Tables beginning onpage 69. | VOTING RECOMMENDATION: FOR the advisory vote to approve executive compensation. The Talent and Compensation Committee takes very seriously its role in the governance of the Company’s compensation programs and values thoughtful input from shareowners. The Talent and Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions. |
FOR the advisory vote to approve executive compensation. The Compensation Committee takes very seriously its role in the governance of the Company’s compensation programs and values thoughtful input from shareowners. The Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.
The Company seeks a non-binding advisory vote from its shareowners to approve the compensation of its Named Executive Officers as described in the Compensation Discussion and Analysis beginning onpage 46and the Compensation Tables beginning onpage 6569.
In deciding how to vote on this proposal, the Board encourages you to read the Compensation Discussion and Analysis and Compensation Tables sections. Over the last several years, we haveThe Talent and Compensation Committee has made several key enhancements in recent years to our compensation programs in order to continue to improve the link between compensation and the Company'sCompany’s business and talent strategies as well as the long-term interests of our shareowners.
The Board recommends that shareowners vote FOR the following resolution:
“RESOLVED, that the shareowners approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, the Compensation Tables and the related narrative.”
Because your vote is advisory, it will not be binding upon the Board. However, the Board values shareowners’ opinions, and the Talent and Compensation Committee will take into accountconsider the outcome of the advisory vote when considering future executive compensation decisions. The Board has adopted a policy of providing for annual advisory votes from shareowners on executive compensation. The next such vote will occur at the 20192021 Annual Meeting of Shareowners.
The Board of Directors recommends a vote
The Board of Directors recommends a voteFOR
2020 Proxy Statement 45 8 COMPENSATIONCompensation Discussion and Analysis Compensation Discussion and Analysis This Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy and programs, the compensation decisions the Talent and Compensation Committee (referred to as the “Committee” in this Compensation Discussion and Analysis) has made under those programs, and the factors considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our Named Executive Officers for 2019, who are listed below and appear in the Compensation Tables beginning onpage 69. In 2019, we implemented key changes in top leadership. Mr. Quincey was elected to serve as Chairman of the Board, in addition to serving as Chief Executive Officer, following the 2019 Annual Meeting. Ms. Waller retired from the Company in March 2019, and Mr. Murphy assumed the role of Executive Vice President and Chief Financial Officer following her retirement. In addition, Mr. Smith assumed the role of President and Chief Operating Officer and Mr. Arroyo assumed the role of President, Asia Pacific Group, both effective January 1, 2019. In December 2019, we announced that Mr. Arroyo would also assume the role of Chief Marketing Officer, which became effective January 1, 2020. The titles below for our Named Executive Officers represent their current position/affiliation with the Company. Please see 2019 Compensation Decisions for Named Executive Officers beginning onpage 60and our 2019 Summary Compensation Table onpage 69for each Named Executive Officer’s position during 2019.
Compensation Discussion and
Our Compensation Philosophy and Core Principles While we consider a number of factors in our pay decisions, we are guided by
In Ms. Lagomasino’s letter on behalf of the Board, she discusses expansion of the scope of responsibilities of the Talent and Compensation Committee. The Committee will now have oversight over human capital management and culture, including diversity and inclusion, as well as compensation. How does the Committee plan on incorporating its new responsibilities? We will have at least two meetings in 2020 focused on these new responsibilities. Our goal is to recognize the business opportunities, as well as potential risks, that the broader human capital issues present, and to provide oversight and guidance to management. Topics that the Committee intends to review include the Company’s strategies related to talent management, leadership development, retention, culture, employee engagement and education (through our in-house learning programs). The Committee will also evaluate our workplace diversity and inclusion, equality, fairness, compliance practices (including compliance with federal government requirements) and other policies and processes that promote equality and fairness and help the Company maintain a consistent and fair process when it comes to hiring and promoting.
Checklist of Compensation Practices
48 The Coca-Cola Company Compensation Discussion and Analysis COMPENSATION 8
2020 Proxy Statement 49 8 COMPENSATIONCompensation Discussion and Analysis
When does the Committee review and make decisions regarding compensation We have a robust annual cycle to When evaluating pay reported in the
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