Coca-Cola chief’s pay package down by third
10 Mar 2014
After Coca-Cola posted mixed 2013 results, the beverage giant gave most of the top executives at the company substantial pay cuts for the year.
The company revealed that CEO Muhtar Kent's total compensation was down 33 per cent, to $20.4 million.
However the biggest cuts for Kent and other executives primarily came from a change in the discount rate used for pension values estimates, with the change hurting Kent to the extent of roughly $6.6 million of the reported $10.1 million decrease in his total compensation in 2013.
Kent's bonus was also down to $2.2 million, from $6.0 million the year before, after the beverage company made several performance targets tougher. Kent's base salary did not change 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 that of other CEOs in the state.
According to a section of Coke shareholders and their advisers, Kent' pay was way beyond what his peers drew the company recorded lacklustre performance.
About a fourth the company's shareholders had signalled displeasure over the executive pay plan in the Atlanta firm's ''say-on-pay'' vote last year, which was significantly higher than in previous years.
Kent's package was valued at $18.2 million for 2013, according to a filing made with the Securities and Exchange Commission on Friday. This was down from the $21.6 million he earned in the previous year.
The decline was primarily the result of a lower performance-based bonus, which fell to $2.2 million, from $6 million. That portion of his pay was linked to financial metrics such as sales volume, which were only 2 per cent higher for the year. The previous year saw the figure increase 4 per cent, in line with the company's long-term goals.
Executives at the Atlanta-based company, which counts numerous products like Sprite, Fanta and Vitaminwater, point to weak economic conditions around the world for the year's lacklustre results. In its home market, Coca-Cola is also struggling to boost sales in its flagship soda business as people turn to the growing number of alternatives in the beverage aisle.
Kent however, had expressed confidence in the company's ability to "restore momentum" to its business in the year ahead.
The 61-year-old has been the CEO since the summer of 2008, after having worked in numerous executive positions around the world for the world's biggest beverage maker.