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After getting push-back from some shareholders and posting mixed 2013 results, Coca-Cola gave most of its top executives substantial pay cuts last year.
The beverage giant disclosed Friday that CEO Muhtar Kent’s total compensation dropped 33 percent, to $20.4 million.
But the biggest cuts for Kent and other executives primarily came from a change in the discount rate used to estimate pension values. In Kent’s case, that change accounted for roughly $6.6 million of the reported $10.1 million decline in his total compensation in 2013.
Kent’s bonus also fell to $2.2 million, from $6.0 million the year before, after Coca-Cola made some of the performance targets tougher. His base salary stayed about the same, at $1.6 million.
Kent was the highest-paid executive among Georgia’s largest companies in 2012, with a $30.5 million pay package that was over twice what any of Georgia’s other CEOs took home that year.
Some Coke shareholders and their advisers said Kent’s pay was too high compared to peers and rewarded what they considered lackluster performance.
About a fourth of Coca-Cola’s shareholders gave a thumb’s down on the executive pay plan in the Atlanta firm’s say-on-pay” vote last year – significantly more than in previous years. The Institutional Shareholder Services advised big investors like pension funds and college endowments to cast “no” votes in the non-binding referendum.
Coca-Cola said Friday in its filing that it re-tooled the plan after some shareholders “expressed concerns.”
The company said it included more “challenging” hurdles and capped executive bonuses if its stock performance lagged the stock market’s overall performance, as it did last year.
Meanwhile, Coca-Cola’s operations also had an uneven year in 2013, with overall volume growth up globally, but troubles with carbonated drink sales in parts of Europe and North America.
The company in February reported that fourth-quarter profit fell 8.3 percent while revenue dropped 4 percent. For the year, profit fell 5 percent on a 2 percent revenue decline.
A Coke spokesman, Petro Kacur, said the company hit profit and earnings-per-share targets after adjustment for currency changes and sales or acquisitions of business units.
“We’ve got a pay-for-performance philosophy. We hit some, but not all, of our long-term growth targets,” Kacur said.
As a result of the tougher performance targets and mixed financial results, Kent and other top executives at Coca-Cola landed smaller bonuses.
Most of the company’s other executives, including retiring Chief Financial Officer Gary Fayard, Coca-Cola International President Ahmet Bozer and Jose Octavio Reyes, vice chairman of Coca-Cola Export Corp., also saw pay drops last year due, in part, to smaller bonuses.
Coca-Cola reported higher pay last year to former Americas President Steve Cahillane, who left the company last month. Cahillane, who was previously with Coca-Cola Enterprises (CCE), received higher compensation of $8.2 million partly because of a raise he received in 2013 when he was promoted and a one-time award of restricted stock to make up for differences between Coca-Cola and CCE pension plans.
