Some experts saw shareholder votes on compensation as a mixed result, but not too surprising in light of executive pay controversies that have swirled around Coca-Cola in recent years.
On one hand, with a 90 percent approval, shareholders gave the company a high grade on its so-called “say on pay” vote, after the company only got a relatively low 77 percent in the previous year’s non-binding vote.
“It’s an A-. It’s a good result,” Todd Sirras, managing director of Semler Brossy, a Los Angeles-based executive compensation consultant .
On the one hand, Coca-Cola got support from 83 percent of shareholders — a below-average figure — for its executive equity pay plan after one investment firm challenged it as a too-generous share giveaway that would harm shareholders. The equity pay plan lays out how Coca-Cola will award stock and options to management based on the company’s financial results and other goals.
Most such plans win over 90 percent of shareholder votes.
A third vote, on a shareholder proposal to separate the CEO and chairman roles, failed with 32 percent of the vote and was on par with results at other companies, said Aaron Boyd, director of governance research at Equilar, an executive pay data firm. Coke management opposed the idea.
After the 2012 vote on say-on-pay vote, Coca-Cola trimmed top executives’ pay and “reached out to investors,” said Boyd. Kent’s pay dropped from $30.5 million in 2012 to $20.4 million last year.
Such actions show that the company is being responsive to shareholders. That “certainly helps the approval percentage,” Boyd said.
He said Coca-Cola followed a similar playbook this year after investment firm Wintergreen Advisors challenged Coca-Cola’s equity pay plan.
Milwaukee-based Wintergreen called that plan a “raw deal” for shareholders that would award $13 billion to $24 billion of Coca-Cola stock and options to executives over four years.
Coca-Cola responded by filing an amended proxy explaining the equity plan to shareholders. Calling Wintergreen’s analysis “misinformed,” Coca-Cola said the pay plan didn’t differ from past practices and would divvy the stock among 6,400 managers.
Some critics also said Wintergreen had overestimated the likely value of the stock awards.