Coke Chief Touts Improved Stock Returns
Annual meeting also features gripes on water usage, exec pay
Wilmington, Del. — Coke's top executive opened Wednesday's annual
meeting with a number close to the hearts of shareholders in the crowd.
One-hundred dollars worth of Coke stock in 2006 returned $23 to investors
in appreciation and dividends.
"My message to you today is, we are keeping our promise," said Coca-Cola
Chairman and Chief Executive Neville Isdell, who presided over his
third annual meeting since taking over the Atlanta-based beverage
giant in mid-2004.
While many in the audience of about 200 shareholders embraced the
message, others used the meeting as a way to rail against Coke for
ongoing issues, such as water usage in developing countries and executive
The meeting turned into a protest rally twice, as critics of Coke
refused to stop talking after their allotted two minutes. When the
microphones were turned off, they resorted to shouting before Isdell
regained control of the meeting.
Aside from that, the meeting was tame in comparison to some of Coke's
annual meetings in recent years, which have drawn as many as 600.
In 2004, labor activist Ray Rogers, protesting alleged worker abuses
overseas, was wrestled to the floor and pulled out of the meeting
by security when he refused to stop speaking.
On Wednesday, Rogers, who works to convince colleges to drop exclusive
Coke supply contracts, spoke out but followed the rules.
"Look, five seconds left and I'm done," Rogers said before sitting
Ten of Coke's 11 board members attended Wednesday's meeting, staged
in an ornate gold and green wood-trimmed ballroom at the plush Hotel
du Pont. All were re-elected handily to their posts, with no more
than 4 percent of shares cast going against any one board member.
Board Member Barry Diller did not attend. Diller received the highest
percentage of no votes for re-election — 14.48 percent, which represented
nearly 292 million Coke shares.
Shareholders, most voting by mail, also approved the board's performance
incentive plan for company executives, despite calls for greater restrictions
on how bonuses and stock options are handled.
Coke doesn't disclose exactly what performance measures board members
use to determine executive incentive pay. But getting shareholder
approval for the broad strokes of the plan allows Coke to take advantage
of tax breaks related to incentive pay.
Shareholders turned back a proposal that would have allowed them to
ratify the compensation amount for the company's top five executives.
Isdell said shareholders who disagree with executive pay amounts can
vote out board members who sit on the compensation committee.
Shareholders also didn't accept a proposal that would have stopped
the premature release of unvested restricted stock. The measure drew
nearly 32 percent of the more than 2 billion shares voted, showing
the topic is still a hot button issue for investors.
Much of Wednesday's dissent centered on Coke's policies regarding
water. Coke has been accused of depleting or contaminating water in
drought-prone areas of India, selling soft drinks tainted with pesticides
in India and undermining water systems by turning consumers away from
tap water toward more costly bottled water.
"This is a huge, huge crime," said Amit Srivastava, director of the
India Resource Center, an activist group that fights corporate globalization
of the country.
Two shareholder proposals related to the allegations, which Coke has
denied, were defeated.
A representative from the Teamsters union warned that there could
be widespread work shortages and picket lines at the company's largest
bottler, Coca-Cola Enterprises, if it eliminates union workers as
part of a reorganization that will cut 3,500 jobs. The Teamsters represent
about 14,000 CCE workers.
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