DEF 14A 1 lko2018_def14a.htm THE COCA-COLA COMPANY - DEF 14A THE COCA-COLA COMPANY - DEF 14A

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

SCHEDULE 14A

 

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2018 Proxy Statement
Notice of Annual Meeting of Shareowners

 

Wednesday, April 25, 2018
8:30 a.m., local time
World of Coca-Cola
Atlanta, 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


TABLE OF CONTENTS

ANNEXES

 

 

2018 Proxy Statement1

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LETTER TO SHAREOWNERS
FROM 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

2018 Proxy Statement2

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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

           
Herbert A.
Allen
  Ronald W.
Allen
  Marc
Bolland
  Ana
Botín
  Richard M.
Daley
  Barry
Diller
  Helene D.
Gayle
                         
           
Alexis M.
Herman
  Muhtar
Kent
  Robert A.
Kotick
  Maria Elena
Lagomasino
  Sam
Nunn
  James
Quincey
  David B.
Weinberg

 

Caroline J. Tsay and Christopher C. Davis (not pictured) have each been nominated for election as a Director at the 2018 Annual Meeting.

 

2018 Proxy Statement3

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Q&A WITH OUR PRESIDENT AND
CHIEF EXECUTIVE OFFICER

 

 

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.

 

 

 

 

James Quincey

 

President and Chief Executive Officer
The 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 Coke Zero Sugar 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 about 2018. We know we have more work to do, but we are encouraged that 2018 will be even stronger.

Can you talk about the concept of Beverages for Life and the new direction in which you are taking the Company?

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.

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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.

As a relatively new member of the Board, do you feel confident that the Board is composed of the right Directors with the right skill sets to effectively represent the Company’s interests?

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.

The Company talks about creating value for the communities where it does business. How can the Company make a difference through its sustainability initiatives?

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 Del Valle if I’m visiting Mexico. I drink smartwater throughout the day, and I have been drinking Coke Zero Sugar daily for a long time.

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NOTICE OF 2018

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:

 

1. To elect the 16 Director nominees identified in the accompanying proxy statement to serve until the 2019 Annual Meeting of Shareowners. (Item 1)
   
2. To hold an advisory vote to approve executive compensation. (Item 2)
   
3. To ratify the appointment of Ernst & Young LLP as Independent Auditors of the Company to serve for the 2018 fiscal year. (Item 3)
   
4. To transact such other business as may properly come before the meeting and at any adjournments or postponements of the meeting.

 

Record Date:

 

The Board of Directors set February 26, 2018 as 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 stock of The Coca-Cola Company (the “Company”) issued and outstanding and entitled to vote at the meeting.

 

Important Meeting Information:

 

If you plan 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.

 

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, at www.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 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 BENEFICIAL OWNERS
(shares registered on the books of (shares held through your
the Company via Computershare) bank or brokerage account)
   
   
Via the Internet Via the Internet
Visit Visit
www.envisionreports.com/coca-cola www.proxyvote.com
   
   
Scan this QR code Scan this QR code
to vote with your mobile device to vote with your mobile device
   
   
By phone By phone
Call 1-800-652-VOTE Call 1-800-454-8683
or the telephone number or the telephone number
on your proxy card on your voting instruction form
   
   
By mail By mail
Sign, date and return Sign, date and return
your proxy card 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.

 

All shareowners of record may vote in person at the meeting. Beneficial owners may vote in person at the meeting if they have a legal proxy, as described in the response to question 10 on page 91.


 

       
       
  Electronic Shareowner Document Delivery    
         
  Instead of receiving Notice of the Annual Meeting or future proxy materials by mail, shareowners of record and most beneficial owners can elect to receive an e-mail that will provide electronic links to these documents. Opting to receive your proxy materials online will save us the cost of producing and mailing documents and also will give you an electronic link to the proxy voting site. In addition, the Company has a tree planted on behalf of each shareowner that signs up for electronic delivery. Since we began offering electronic delivery in 2005, over 380,000 trees have been planted on behalf of Company shareowners.  
         

 

2018 Proxy Statement6

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PROXY SUMMARY

This summary highlights information contained in the Proxy Statement. This summary does not contain all of the information that you should consider, and 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.

ROADMAP OF VOTING MATTERS

Shareowners are being asked to vote on the following matters at the 2018 Annual Meeting of Shareowners:

 

Our Board’s Recommendation

ITEM 1. Election of Directors (page 15)

 

The Board and the Committee on Directors and Corporate Governance believe that the 16 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.

FOR each

Director Nominee

ITEM 2. Advisory Vote to Approve Executive Compensation (page 45)

 

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 on page 46 and the Compensation Tables beginning on page 65. The Board values shareowners’ opinions, and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.

FOR

ITEM 3. Ratification of the Appointment of Ernst & Young LLP as Independent Auditors (page 86)

 

The Audit Committee and the Board believe that the retention of Ernst & Young LLP to serve as the Independent Auditors for the fiscal year ending December 31, 2018 is in the best interests 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.

FOR

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 on page 14 describes our governance framework, which includes the following highlights:

GOVERNANCE HIGHLIGHTS
     
Board Practices   Shareowner Matters
  13 of 16 Director nominees independent     Long-standing active shareowner engagement
  Commitment to Board refreshment (12 new Directors nominated since 2009)     Annual “say on pay” advisory vote
  Adopted a proxy access right
  Shareowner right to call special meetings
  Robust Director nominee selection process  
  Regular Board, committee and Director evaluations  
  Annual election of Directors with majority voting standard   Other Best Practices

  Lead Independent Director, elected by the independent Directors

  Independent Audit, Compensation and Directors/Governance Committees

  Regular executive sessions of non-employee Directors

  Strategy and risk oversight by full Board and committees

    Long-standing commitment toward sustainability
  Transparent public policy engagement
  Stock ownership guidelines for executives
  Anti-hedging, anti-short sale and anti-pledging policies


 

 

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DIRECTOR NOMINEES

SNAPSHOT OF 2018 DIRECTOR NOMINEES
                 
All Director nominees exhibit:
                 
    High integrity     A commitment to sustainability and social issues     A proven record of success
                 
  An appreciation of multiple cultures   Innovative thinking   Knowledge of corporate governance requirements and practices
                 
Our Director nominees exhibit an effective mix of skills, experience, diversity and fresh perspective
 

 

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

Name

Age

Director Since

Primary Occupation

Committee Memberships1

Other

Boards2

A

C

DCG

E

F

MD

PIDR

Herbert A. Allen

78

1982

President, Chief Executive Officer and Director,
Allen & Company Incorporated

 

 

 

 

0

Ronald W. Allen*

76

1991

Former Chairman of the Board, President and
Chief Executive Officer, Aaron’s Inc.

 

 

 

 

 

2

Marc Bolland*

58

2015

Head of European Portfolio Operations,
Blackstone Group L.P.

 

 

 

 

 

 

2

Ana Botín*

57

2013

Executive Chair, Banco Santander, S.A.

 

 

 

 

 

 

2

Richard M. Daley*

75

2011

Executive Chairman, Tur Partners LLC; Of Counsel,
Katten Muchin Rosenman LLP

 

 

 

 

 

0

Christopher C. Davis*

52

Nominee

Chairman, Davis Selected Advisers–NY, Inc.

 

3

 

 

 

 

 

4

Barry Diller*

76

2002

Chairman of the Board and Senior Executive, IAC/InterActiveCorp and Expedia, Inc.

 

 

 

2

Helene D. Gayle*

62

2013

Chief Executive Officer, The Chicago Community Trust

 

 

 

 

 

1

Alexis M. Herman*

70

2007

Chair and Chief Executive Officer, New Ventures LLC

 

 

 

 

 

3

Muhtar Kent

65

2008

Chairman of the Board, The Coca-Cola Company

 

 

 

 

 

 

1

Robert A. Kotick*

55

2012

Chief Executive Officer and Director,

Activision Blizzard, Inc.

 

 

 

 

 

1

Maria Elena Lagomasino*

68

2008

Chief Executive Officer and Managing Partner,
WE Family Offices

 

 

 

 

1

Sam Nunn*

79

1997

Co-Chairman, Nuclear Threat Initiative

 

 

 

 

0

James Quincey

53

2017

President and Chief Executive Officer,

The Coca-Cola Company

 

 

 

 

 

 

 

0

Caroline J. Tsay*

36

Nominee

Chief Executive Officer, Compute Software, Inc.

4

 

 

 

 

 

 

2

David B. Weinberg*

66

2015

Chairman and Chief Executive Officer, Judd Enterprises, Inc.

 

 

 

 

 

 

0

*

Independent Director

Chair

Member

1

A = Audit Committee; C = Compensation Committee; DCG = Committee on Directors and Corporate Governance; E = Executive Committee; F = Finance Committee; MD = Management Development Committee; PIDR = Public Issues and Diversity Review Committee

2

Other public company boards. For Mr. Davis, 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.

3

Mr. Davis will be appointed to the Compensation Committee if elected.

4

Ms. Tsay will be appointed to the Audit Committee if elected.

    
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2017 PERFORMANCE AT A GLANCE

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.

 

2017 ACHIEVEMENTS

Executed leadership succession plan and transitioned to a new CEO

 

Implemented new operating model to support faster growth and empower field operations to act with more speed and independence

 

Refined and simplified our incentive metrics for 2018 to better align with our growth performance and shareowner value creation while providing a better line of sight for employees into what they can affect

 

Introduced 500+ new products into the market worldwide, including the successful global roll-out of Coke Zero Sugar in 20 markets

 

Entered the fast-growing U.S. ready-to-drink coffee category in February 2017 and gained value share for the full year

 

Diversified our growing portfolio through strategic investments, including Topo Chico, a sparkling water brand in the U.S., and AdeS, a plant-based beverage brand in Latin America

 

Continued focus on driving revenue growth, led by North America, which grew net operating revenues by 4%

 

Expanded our operating margin driven by productivity initiatives and refranchising

 

Announced incremental $800 million in productivity savings through 2019

 

Completed the refranchising of Company-owned bottling operations in the U.S. and China

 

Operating Results

 

 

VALUE SHARE       REVENUE (15)%
Reported Net Operating Revenues
+3%
Organic Revenues (Non-GAAP)
UNIT CASE VOLUME 0%     PROFIT (17)%
Reported Income from Continuing Operations Before Income Taxes
+9%
Comparable Currency Neutral Income from Continuing Operations Before Income Taxes (Structurally Adjusted) (Non-GAAP)

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, as applicable, as well as the impact of changes in foreign currency exchange rates. Comparable currency neutral 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, the impact of changes in foreign currency exchange rates, and the impact of structural changes. See Annex C for a reconciliation of non-GAAP financial measures to our results as reported under accounting principles generally accepted in the U.S. (“GAAP”).

Return to Shareowners

Return to Shareowners TOTAL SHAREOWNER RETURN1 103% 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

 

1

Cumulative stock price appreciation plus dividends, with dividends reinvested quarterly.

2

Net share repurchases is a non-GAAP financial measure that reflects the net amount 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.

3

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.

    
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KEY LINKAGES BETWEEN PAY AND PERFORMANCE

In the context of our compensation programs, we assess Company performance in two primary ways:

1.

the Company’s operating performance, including results against long-term growth targets; and

2.

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.

    
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2017 COMPENSATION

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,
Chief Financial Officer and President, Enabling Services

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.

    
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QUESTIONS AND ANSWERS

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.

LEARN MORE ABOUT OUR COMPANY

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.

    
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ONE COCA-COLA PLAZA
ATLANTA, GEORGIA 30313

 

MARCH 8, 2018

 

PROXY STATEMENT

The Board of Directors (the “Board”) of The Coca-Cola Company (the “Company”) is furnishing you this Proxy Statement to solicit proxies on its behalf to be voted at the 2018 Annual Meeting of Shareowners of The Coca-Cola Company. The meeting will be held 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 of 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.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREOWNERS TO BE HELD ON APRIL 25, 2018.

 

The Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2017 are available at www.edocumentview.com/coca-cola.

 

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GOVERNANCE

 

Message from Sam Nunn, Lead Independent Director

 

During this time of change and transition for our Company, I am grateful for the trust you place in me as your Lead Independent Director. Now in my fourth year, I continue to be pleased with what this Board is accomplishing in working with management toward the common goal of long-term value creation for our shareowners. I would like to share some of the steps your Board has undertaken in the past year.

I continue to be pleased with what
this Board is accomplishing in
working with management toward
the common goal of long-term value
creation 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 rest of the Board and I are committed 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 line 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

 

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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 16 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.

 

Board Composition and Refreshment

 

Ensuring 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 of the Board and the Committee on Directors and Corporate Governance. 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.

 

  Board Refreshment  
   
  Under Muhtar Kent’s leadership of the Board since 2009
  Ten new Directors elected through 2017
  Two new Director nominees for the 2018 Annual Meeting
  Full rotation of Board committee chairs
  New Lead Independent Director elected
  Expanded qualifications and diversity, including the number of women Directors, represented on the Board
     

 

Board Membership Criteria

 

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 experience that should be represented on the Board as a whole, but not necessarily by each individual Director.

Qualifications 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 ability 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 to assess intangible qualities, including the individual’s ability to ask difficult questions and, simultaneously, to work collegially.

The Board does not have a specific diversity policy, but considers diversity of race, ethnicity, gender, age, cultural background and professional experience in evaluating candidates for Board membership. Diversity is important because the Board believes that a variety 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 Board

The Board has identified key qualifications and experience 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 experience are linked to our Company’s business.

 

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Linking Business Characteristics with Key Qualifications and Experience Represented on the Board  
                   
The Company’s business is multifaceted and involves complex financial transactions in many countries and in many currencies.     Marketing and innovation are core focuses of the Company’s business and the Company seeks to develop and deploy the world’s most effective marketing and innovative products and technology.
                   
Key Qualifications and Experience     Key Qualifications and Experience
                   
High level of financial experience Relevant senior leadership/Chief Executive Officer experience     Marketing experience Innovation/technology experience
                   
                   
The Company’s business is truly global and multicultural, with its products sold in over 200 countries around the world.     The Company’s business requires compliance with a variety of regulatory requirements across a number of countries and relationships with various governmental entities and non-governmental organizations.
                   
Key Qualifications and Experience     Key Qualifications and Experience
                   
Broad international exposure/emerging market experience   Diversity of race, ethnicity, gender, age, cultural background and professional experience       Governmental or geopolitical expertise
                   
                   
The Company’s business is a complicated global enterprise and most of the Company’s products are manufactured and sold by bottling partners around the world.     The Board’s responsibilities include understanding and overseeing the various risks facing the Company and ensuring that appropriate policies and procedures are in place to effectively manage risk.
                   
Key Qualifications and Experience     Key Qualifications and Experience
                   
Extensive knowledge of the Company’s business and/or industry     Risk oversight/management expertise
                   

Board Evaluation 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.

 

  Evaluation Components  
   
  The Board conducts an annual self-evaluation
  Each committee conducts an annual self-evaluation
  Each Director evaluates the Board and the committees on which he or she serves, as well as each other Director
     

 

Multi-Step 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. 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.

 

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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, 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, 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 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 experience 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-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 to asktheboard@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 Candidates

In 2015, our Board adopted 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. 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 on page 97 for 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.

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.

    
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2018 Director Nominees

 

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 below is a description of select key qualifications and experience of such nominee based on the qualifications described 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 Board of Directors recommends a vote FOR the election of each of the Director nominees.

 

SNAPSHOT OF 2018 DIRECTOR NOMINEES
                 
All Director nominees exhibit:
                 
    High integrity     A commitment to sustainability and social issues     A proven record of success
                 
  An appreciation of multiple cultures   Innovative thinking   Knowledge of corporate governance requirements and practices
                 
Our Director nominees exhibit an effective mix of skills, experience, diversity and fresh perspective
 

 

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

 

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Herbert A. Allen      
    Mr. Allen is President, Chief Executive Officer and a Director of Allen & Company Incorporated, a privately held investment firm, and has held these positions for more than the past five years. He previously served as a Director of Convera Corporation from 2000 to 2010.

Director since 1982

 

Age: 78

 

Board Committees: Executive, Finance, Management Development (Chair)

 

Other Public Company Boards: None

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Extensive 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 Experience

President and Chief Executive Officer of Allen & Company Incorporated, a preeminent investment firm focused on the media, entertainment and technology industries.

Extensive Knowledge of the Company’s Business and/or Industry

Director 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.

Marketing Experience

Significant marketing experience through ownership of a controlling interest and management of Columbia Pictures, a film production and distribution studio, from 1973 to 1982, and through a ten-year public company directorship at Convera Corporation, a company that used technology to help clients build an online community and increase their Internet advertising revenues.

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, public and private capital markets transactions and merger and acquisition transactions.

 

Ronald W. Allen      
    Mr. Allen served as Chief Executive Officer of Aaron’s, Inc. from February 2012 until his retirement in August 2014. Mr. Allen served as a Director of Aaron’s, Inc. from 1997 until August 2014. Mr. Allen also served as President of Aaron’s, Inc. from February 2012 to April 2014 and as Chairman of the Board of Aaron’s, Inc. from November 2012 until April 2014. Mr. Allen served as interim President and Chief Executive Officer of Aaron’s, Inc. from November 2011 to February 2012. Mr. Allen retired as the Chairman of the Board, President and Chief Executive Officer of Delta Air Lines, Inc. (“Delta”), one of the world’s largest global airlines, in July 1997. From July 1997 through July 2005, Mr. Allen was a consultant to and Advisory Director of Delta. He previously served as a Director of Guided Therapeutics Inc. from 2008 to January 2014.

Director since 1991

 

Age: 76

 

Board Committees: Audit (Chair), Finance

 

Other Public Company Boards: Aircastle Limited (since 2006) and Forward Air Corporation (2011-2013 and since 2014)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Oversaw financial matters in his role as Chairman of the Board, President and Chief Executive Officer of Aaron’s, Inc., a leader in the sales and lease ownership and specialty retailing of residential furniture, consumer electronics, home appliances and accessories, and also served on its Audit Committee prior to becoming interim President and Chief Executive Officer. Serves on the Audit Committee of Aircastle Limited, a global company that acquires, leases and sells commercial jet aircraft to customers throughout the world. Served on the Investment Committee of Interstate Hotels & Resorts, Inc., a large independent hotel management company of major global brands.

Relevant Senior Leadership/Chief Executive Officer Experience

Served as Chief Executive Officer of Aaron’s, Inc. from February 2012 to August 2014 and as its President from February 2012 to April 2014. Served as Chief Executive Officer and President of Delta from 1987 to 1997. During his tenure at Delta, he managed the company through very difficult times, brought it back to sustained profitability, established a program to lower the airline’s cost structure and grew the business through expansion into foreign markets.

Broad International Exposure/Emerging Market Experience

Former Chairman and Chief Executive Officer of Delta, a global carrier with service to countries on six continents. Serves as a Director at Aircastle Limited and served as a Director at Interstate Hotels & Resorts, Inc. from 2006 to 2010, each of which has international operations.

Extensive Knowledge of the Company’s Business and/or Industry

Director of the Company since 1991. Significant manufacturing experience as a senior executive at Aaron’s, Inc., whose business includes a furniture manufacturing division.

Risk Oversight/Management Expertise

Extensive risk oversight and management experience as Chief Executive Officer of both Delta and Aaron’s, Inc., and experience overseeing risk as a member of the Audit Committee of Aircastle Limited.

 

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Marc Bolland      
    Mr. Bolland is the Head of European Portfolio Operations of The Blackstone Group L.P.’s private equity businesses and has held this position since September 2016. Mr. Bolland served as Chief Executive Officer and a Director of Marks & Spencer Group p.l.c. (“Marks & Spencer”), an international, multi-channel retailer, from May 2010 to April 2016. He served as Chief Executive Officer and a Director of WM Morrison Supermarkets PLC, a leading supermarket chain in the UK, from September 2006 to April 2010. He served as Chief Operating Officer of Heineken N.V., one of the world’s largest brewers, from 2005 to July 2006, and as an executive board member of Heineken N.V. from 2001 to July 2006. Mr. Bolland started his career at Heineken N.V. in the Netherlands in 1987, serving in several international management positions including Managing Director of Heineken Export Group Worldwide, a subsidiary of Heineken N.V., from 1999 to 2001, and Managing Director of Heineken Slovensko, a subsidiary of Heineken N.V., from 1995 to 1998. He previously served as a Director of ManpowerGroup Inc. from 2004 to February 2015.

Director since 2015

 

Age: 58

 

Board Committees: Audit

 

Other Public Company Boards: International Consolidated Airlines Group, S.A. (since 2016) and Exor N.V. (since 2016)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Extensive operational and financial experience as Chief Executive Officer of Marks & Spencer, Chief Executive Officer of WM Morrison Supermarkets PLC and Chief Operating Officer of Heineken N.V., all public companies, and as head of European Portfolio Operations, The Blackstone Group L.P.

Relevant Senior Leadership/Chief Executive Officer Experience

From 2010 to 2016, served as Chief Executive Officer of Marks & Spencer, an international, multi-channel retailer based in the UK. From 2006 to 2010, served as Chief Executive Officer of WM Morrison Supermarkets PLC where he successfully led the development and implementation of its long-term strategy, turning around the business.

Broad International Exposure/Emerging Market Experience

Appointed a UK Business Ambassador by the British Prime Minister to promote the UK in overseas markets and highlight trade and investment opportunities. Led international expansion of Marks & Spencer, which has stores in the UK and international locations. In addition, while at Heineken N.V., he was Managing Director in Slovakia, Managing Director for Heineken Export Worldwide and had responsibility for Western Europe, the U.S., Latin America, Northern Africa and Global Marketing.

Marketing Expertise

Extensive marketing and retail expertise as Chief Executive Officer of Marks & Spencer 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.

Risk Oversight/Management Expertise

Extensive experience overseeing risk as Chief Executive Officer of Marks & Spencer and WM Morrison Supermarkets PLC, and as Chief Operating Officer of Heineken N.V. Additional risk management experience as head of The Blackstone Group L.P.’s European Portfolio Operations and as Director and Safety Committee member of International Consolidated Airlines Group, S.A., one of the world’s largest airline groups.

 

Ana Botín      
    Ms. Botín is Executive Chair of Banco Santander, S.A., the parent bank of Grupo Santander, and has held this position since September 2014. She has served as a Director of Banco Santander, S.A. since 1989. Ms. Botín served as Chief Executive Officer of Santander UK plc, a leading financial services provider in the UK and subsidiary of Banco Santander, S.A., from December 2010 to September 2014. She has served as a Director of Santander UK plc since December 2010. Ms. Botín served as Executive Chair of Banco Español de Crédito, S.A., also a subsidiary of Banco Santander, S.A., from 2002 to 2010. She started her 35-year career in the banking industry at JP Morgan in New York in 1981 and in 1988 joined Banco Santander, S.A., where she established and led its international corporate banking business in Latin America in the 1990s. She previously served as a Director of Assicurazioni Generali S.p.A., a global insurance company based in Italy, from 2004 to 2011.

Director since 2013

 

Age: 57

 

Board Committees: Directors and Corporate Governance

 

Other Public Company Boards: Banco Santander, S.A. (since 1989) and Santander UK plc (since 2010)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Internationally recognized expert in the investment banking industry with knowledge of global macroeconomic issues. Over 37 years of experience in investment and commercial banking. Has served as Executive Chair of Banco Santander, S.A. since September 2014 and a member of Banco Santander, S.A.’s Board and Executive Committee since 1989 and of its Management Committee since 1994. Began career at JP Morgan in New York in 1981 where she worked in its investment banking and treasury service areas until 1988. Joined Banco Santander, S.A. in 1988, and subsequently served as Executive Chair of Banco Español de Crédito, S.A. from 2002 to 2010 and as Chief Executive Officer of Santander UK plc from 2010 to September 2014.

Relevant Senior Leadership/Chief Executive Officer Experience

Executive Chair of Banco Santander, S.A. since September 2014. Also served as Chief Executive Officer of Santander UK plc from 2010 to September 2014.

Broad International Exposure/Emerging Market Experience

Executive 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 medium sized companies in Latin America, and founder and Chair of CyD Foundation, a nonprofit organization that supports and promotes the contribution of Spanish universities to the country’s economic and social development. Co-founder and Chair of Fundación Empieza Por Educar, the Spanish member of the global Teach For All network.

Diversity

Spanish national; female.

Risk Oversight/Management Expertise

Extensive experience in the oversight and management of risks associated with retail and commercial banking activities as Executive Chair of Banco Santander, S.A., Chief Executive Officer of Santander UK plc and Executive Chair of Banco Español de Crédito, S.A.

 

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Richard M. Daley      
    Mr. Daley was the Mayor of Chicago from 1989 to 2011. Mr. Daley is the Executive Chairman of Tur Partners LLC, an investment and advisory firm focusing on sustainable solutions within the urban environment, and has held this position since May 2011. He is an Of Counsel at Katten Muchin Rosenman LLP, a full-service law firm with attorneys in locations across the U.S. and in London and Shanghai, and has held this position since June 2011. Mr. Daley also has been a distinguished senior fellow at the University of Chicago Harris School of Public Policy since May 2011. From October 2011 to October 2016, he served as a senior advisor to JPMorgan Chase & Co., where he chaired the Global Cities Initiative, a joint project of JPMorgan Chase & Co. and the Brookings Institution to help cities identify and leverage their greatest economic development resources. He previously served as a Director of Diamond Resorts International, Inc. from July 2013 to September 2016.

Director since 2011

 

Age: 75

 

Board Committees: Audit, Directors and Corporate Governance

 

Other Public Company Boards: None

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Significant financial experience as Executive Chairman of Tur Partners LLC, a North American principal investment firm, Executive Chairman of DaleyTang, LLC, an international strategic advisory and investment management firm, and as Mayor of Chicago, where he managed the city’s budget.

Relevant Senior Leadership/Chief Executive Officer Experience

As Mayor of Chicago, managed all aspects of a complex governmental organization, including its multi-billion dollar budget and over 30 departments with over 35,000 employees. Serves as Executive Chairman of Tur Partners LLC.

Broad International Exposure/Emerging Market Experience

As Mayor, helped Chicago become a prominent player in the global economy. Particular focus on developing relationships in China through efforts such as the Chicago-China Friendship Initiative Campaign. Ongoing international exposure with policymakers from around the world as distinguished senior fellow at the University of Chicago Harris School of Public Policy.

Governmental or Geopolitical Expertise

Over a 42-year career in public service. Mayor of Chicago for 22 years and the longest serving Mayor in Chicago’s history. As Mayor, earned a reputation for improving Chicago’s quality of life, public school system and infrastructure, strengthening the economy and helping Chicago become among the most environmentally friendly cities in the world.

Risk Oversight/Management Expertise

Significant expertise in managing and overseeing risks as Mayor of Chicago, including emergency and crisis management and oversight of governmental, economic, environmental, human resources and social risks.

 

       
Christopher C. Davis    
    Mr. Davis is Chairman of Davis Selected Advisers-NY, Inc., a registered investment advisory firm, and has held this position since 1997. He joined Davis Selected Advisers, L.P. (“Davis Advisors”) in 1989 as a financial analyst and in 1995, became a portfolio manager of the firm’s flagship funds, Davis New York Venture Fund and Selected American Shares. Mr. Davis is also a Director and officer of a number of mutual funds advised by Davis Advisors, as well as other entities controlled by Davis Advisors.

Director Nominee

 

Age: 52

 

Board Committees: Compensation (if elected)

 

Other Public Company Boards: Graham Holdings Company (since 2006), Selected Funds (consisting of two portfolios) (since 1998), Davis Funds (consisting of 13 portfolios) (since 1997) and Clipper Funds Trust (consisting of one portfolio) (Trustee since 2014)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

More than 28 years of experience in investment management and securities research at Davis Advisors, an investment counseling firm that oversees approximately $30 billion of client assets, including ETFs, mutual funds, variable annuities and institutional separate accounts. Also serves as a portfolio manager for the Davis Large Cap Value Portfolios and a member of the research team for other portfolios.

Relevant Senior Leadership/Executive Officer Experience

Has served as Chairman of Davis Selected Advisers–NY, Inc. since 1997, and as a Director and officer of a number of mutual funds advised by Davis Advisors, as well as other entities controlled by Davis Advisors.

Broad International Exposure/Emerging Market Experience

With about half of the world’s market capitalization outside the U.S., Davis Advisors, under the leadership of Mr. Davis, seeks investment growth opportunities and diversification potential that international companies in both developed and developing markets provide.

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 U.S. in developed and developing markets and providing investors access to these investment opportunities.

Risk Oversight/Management Expertise

Extensive experience evaluating strategic investments and transactions and managing risk against the volatility of equity markets during his 28-year career at Davis Advisors.

 

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Barry Diller      
    Mr. Diller has served as Chairman and Senior Executive of IAC/InterActiveCorp, a leading media and Internet company, since December 2010. Prior to that time, Mr. Diller held the positions of Chairman and Chief Executive Officer of IAC/InterActiveCorp (and its predecessor companies) since August 1995 and ceased serving as Chief Executive Officer in December 2010. Mr. Diller has served as Chairman and Senior Executive of Expedia, Inc., an online travel company, since August 2005. Mr. Diller has also served as Special Advisor to TripAdvisor, Inc., an online travel company, since April 2013, and served as its Chairman and Senior Executive from December 2011, when it was spun off from Expedia, Inc., until December 2012, and was a member of its Board until April 2013. Mr. Diller also served as the non-executive Chairman of Live Nation Entertainment, Inc. from January 2010 to October 2010 and was a member of its Board until January 2011. He previously served as a Director of Graham Holdings Company from September 2000 to January 2017.

Director since 2002

 

Age: 76

 

Board Committees: Directors and Corporate Governance, Executive, Finance (Chair), Management Development

 

Other Public Company Boards: Expedia, Inc. (since 2005) and IAC/InterActiveCorp (since 1995)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Extensive 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 Company, a diversified education and media company.

Relevant Senior Leadership/Chief Executive Officer Experience

Served as Chief Executive Officer of IAC/InterActiveCorp (and its predecessors) from 1995 to 2010. Beginning with QVC, Inc. in 1992, served as chief executive for a number of predecessor companies engaged in media and interactivity prior to the formation of IAC/InterActiveCorp. Previously served as Chief Executive Officer of Fox, Inc. (“Fox”) from 1984 to 1992 and was responsible for the creation of Fox Broadcasting Company, in addition to Fox’s motion picture operations. Prior to joining Fox, served for ten years as Chief Executive Officer of Paramount Pictures Corporation.

Broad International Exposure/Emerging Market Experience

Chairman of the Board and Senior Executive of 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, whose family of websites is one of the largest in the world. Chairman of the Board and Senior Executive of Expedia, Inc., one of the world’s leading online travel companies. Served as Chairman of the Board and Senior Executive of TripAdvisor, Inc., the world’s largest travel site. Served as a member of the Council on Foreign Relations.

Marketing Experience

Chairman and Senior Executive of IAC/InterActiveCorp, a leading media and Internet company comprised of widely known consumer brands, such as HomeAdvisor, Vimeo, Dictionary.com, The Daily Beast, Investopedia, and Match Group’s online dating portfolio. Chairman and Senior Executive of Expedia, Inc., an online travel company which markets a variety of leisure and business travel products.

Innovation/Technology Experience

Extensive experience and leadership roles in the media and Internet sectors, including experience at IAC/InterActiveCorp, with businesses in the marketing and technology industries, with brands such as Ask.com, About.com, Match, HomeAdvisor, DailyBurn and Vimeo, at Expedia, Inc., an online travel company, which empowers business and leisure travelers through technology with tools to efficiently research, plan, book and experience travel, and at TripAdvisor, Inc., which operates the flagship TripAdvisor-branded websites and numerous other travel brands.

 

Helene D. Gayle      
    Dr. Gayle is Chief Executive Officer of The Chicago Community Trust, a community foundation dedicated to improving the Chicago region through strategic grant making, civic engagement and inspiring philanthropy, and has held this position since October 2017. Dr. Gayle held the position of Chief Executive Officer of McKinsey Social Initiative, an independent nonprofit organization founded by McKinsey & Company, which brings together expert problem solvers to develop innovative approaches to complex social challenges, from July 2015 to September 2017. She held the positions of President and Chief Executive Officer of CARE USA, a leading international humanitarian organization, from 2006 to 2015. From 2001 to 2006, she served as program director in the Global Health Program at the Bill & Melinda Gates Foundation. Dr. Gayle started her career in public health at the U.S. Centers for Disease Control and Prevention (“CDC”) in 1984 where she served for 20 years, holding various positions, ultimately becoming the director of the CDC’s National Center for HIV, STD and TB Prevention in 1995.

Director since 2013

 

Age: 62

 

Board Committees: Compensation, Public Issues and Diversity Review

 

Other Public Company Boards: Colgate-Palmolive Company (since 2010)

 

     
Key Qualifications and Experience:  

Relevant Senior Leadership/Chief Executive Officer Experience

Chief Executive Officer of The Chicago Community Trust, a community foundation with assets of $2.8 billion, and former Chief Executive Officer of McKinsey Social Initiative, a nonprofit focused on developing innovative approaches to complex social challenges. Former President and Chief Executive Officer of CARE USA, a leading humanitarian organization fighting global poverty, with operating support and revenues exceeding $500 million per year.

Broad International Exposure/Emerging Market Experience

Implemented the McKinsey Social Initiative’s Generation program, which is aimed at fighting unemployment globally, including an initial goal of connecting one million young people across five countries with skills and jobs by 2020. Experience managing international operations at CARE USA, which has long-term programs in 94 countries around the world, primarily in emerging markets. Helped develop global health initiatives in leadership roles at the CDC and the Bill & Melinda Gates Foundation. Serves on the Board of Trustees of the Center for Strategic and International Studies, the Brookings Institution and the Rockefeller Foundation. Member of the Council on Foreign Relations.

Diversity

African-American; female.

Innovation/Technology Experience

As former Chief Executive Officer of McKinsey Social Initiative, significant experience using innovative approaches and initiatives to solve complex social challenges. As former Chief Executive Officer of CARE USA, extensive experience working to find innovative and sustainable solutions to challenging development problems. At the CDC and the Bill & Melinda Gates Foundation, led initiatives aimed at developing innovative technologies for disease prevention and control. Former Chair of the Presidential Advisory Council on HIV/AIDS, advising the Secretary of Health and Human Services on innovative solutions, policies and programs to combat HIV/AIDS. Member of the National Academy of Medicine, an organization which works to address critical issues in health, medicine and related policy through its domestic and global initiatives.

Governmental or Geopolitical Expertise

Extensive leadership experience in the global public health field through service at the CDC and through a leadership position with the Bill & Melinda Gates Foundation, directing programs on HIV/AIDS and other global health issues. Member of the U.S. Department of State’s Advisory Committee on International Economic Policy and the Secretary of State’s Advisory Committee on Public-Private Partnerships, and served on the President’s Commission on White House Fellowships. Achieved the rank of Assistant Surgeon General and Rear Admiral in the U.S. Public Health Service. Serves on the Board of Trustees of the Brookings Institution, a think tank whose mission is to improve governance at the local, national, regional and global levels. Also serves as a Director of New America Foundation, a nonpartisan public policy institute and think tank, and ONE, an international, nonpartisan advocacy and campaigning organization that fights extreme poverty and preventable disease, particularly in Africa. Member of the Board of Trustees of the Center for Strategic and International Studies, a preeminent international policy institution.

 

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Alexis M. Herman      
    Ms. Herman is Chair and Chief Executive Officer of New Ventures LLC, a risk management consulting firm, and has held these positions since 2001. She served as Chair of the Business Advisory Board of Sodexo, Inc., an integrated food and facilities management services company, through 2013 and serves as a member of Toyota Motor Corporation’s Diversity Advisory Board and Global Advisory Board. As Chair of the Company’s Human Resources Task Force from 2001 to 2006, Ms. Herman worked with the Company to identify ways to improve its human resources policies and practices following the November 2000 settlement of an employment lawsuit. From 1997 to 2001, she served as U.S. Secretary of Labor.

Director since 2007

 

Age: 70

 

Board Committees: Compensation, Public Issues and Diversity Review (Chair)

 

Other Public Company Boards: Cummins Inc. (since 2001), Entergy Corporation (since 2003) and MGM Resorts International (since 2002)

 

     
Key Qualifications and Experience:  

Relevant Senior Leadership/Chief Executive Officer Experience

Chief Executive Officer of New Ventures LLC, a risk management consulting firm. Former U.S. Secretary of Labor from 1997 to 2001.

Broad International Exposure/Emerging Market Experience

Director of Cummins Inc., a global power leader that designs, manufactures, distributes and services diesel and natural gas engines and related technologies and serves customers in more than 190 countries and territories. Serves as Chair on Toyota’s Diversity Advisory Board. Served 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 helping governments improve the economic and social well-being of people around the world.

Diversity

African-American; female.

Governmental or Geopolitical Expertise

Former U.S. Secretary of Labor from 1997 to 2001. Former White House Assistant to President Clinton and Director of the White House Office of Public Liaison. Served as Director of the Labor Department’s Women’s Bureau under President Jimmy Carter. Former Chief of Staff and former Vice Chair of the Democratic National Committee. Served as a Trustee of the Clinton Bush Haiti Fund, and as Chair of the Working Party for the Role of Women in the Economy for OECD. Serves as Chair of the Corporate Social Responsibility Committee for MGM Resorts International, a global hospitality company.

Risk Oversight/Management Expertise

Significant 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.

 

Muhtar Kent      
    Mr. Kent is Chairman of the Board of the Company. He has held the position of Chairman of the Board since April 2009 and served as Chief Executive Officer from July 2008 through April 30, 2017. Mr. Kent served as President of the Company from December 2006 through August 2015 and as Chief Operating Officer of the Company from December 2006 through June 2008. From January 2006 through December 2006, Mr. Kent served as President of Coca-Cola International and was elected Executive Vice President of the Company in February 2006. From May 2005 through January 2006, he was President and Chief Operating Officer of the Company’s North Asia, Eurasia and Middle East Group, an organization serving a broad and diverse region that included China, Japan and Russia. Mr. Kent originally joined the Company in 1978 and held a variety of marketing and operations roles until 1995, when he became Managing Director of Coca-Cola Amatil Limited-Europe covering bottling operations in 12 countries. From 1999 until his return to the Company in May 2005, he served as President and Chief Executive Officer of Efes Beverage Group, a diversified beverage company with Coca-Cola and beer operations across Southeast Europe, Turkey and Central Asia.

Director since 2008

 

Age: 65

 

Board Committees: Executive (Chair)

 

Other Public Company Boards: 3M Company (since 2013)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Substantial financial experience gained in roles as Chief Executive Officer and President of the Company and Efes Beverage Group, both multi-national companies. Oversight of complex financial transactions and profit and loss responsibility during prior operations and leadership roles with the Company. Serves on the Compensation Committee and as Chair of the Finance Committee of the Board of Directors of 3M Company.

Relevant Senior Leadership/Chief Executive Officer Experience

In addition to serving as the Company’s Chief Executive Officer, served as President and Chief Executive Officer of Efes Beverage Group.

Broad International Exposure/Emerging Market Experience

Over 37 years of Coca-Cola system experience including extensive experience in international markets. Director of 3M Company, a diversified technology company with a global presence. Member of the Board of Trustees of the United States Council for International Business and member of the Board of Directors of the Special Olympics. Member of the Chairman’s Council of the World Economic Forum and former Chairman of the International Business Council of the World Economic Forum. Former member of the Board of Directors of the National Committee on United States-China Relations, former member of the Board of Directors and past Chairman of the United States-China Business Council and former member of the Board of Directors and past Co-Chair of The Consumer Goods Forum. Former member of the Board of Trustees of the Center for Strategic and International Studies.

Extensive Knowledge of the Company’s Business and/or Industry

Chairman of the Board (since 2009), Chief Executive Officer (2008 through April 30, 2017), Chief Operating Officer (December 2006 to 2008) and President (December 2006 to 2015) of the Company. Joined the Company in 1978, holding a variety of marketing and operations leadership positions over the course of his career in the Coca-Cola system.

Governmental or Geopolitical Expertise

Serves as Director of the American Turkish Society whose mission is to enhance business, economic, political and cultural ties between the U.S. and Turkey, and as a member of the Concordia Leadership Council whose vision aims to create a global community where challenges are solved collaboratively and inclusively. Served as Trustee for the Center for Strategic and International Studies, a preeminent international policy institution, and served as a Director of the National Committee on United States-China Relations. Also serves as a Director of Special Olympics International, the Hellenic Initiative and Suu Foundation, and as Advisory Board Member of Tsinghua University School of Economics and Management.

 

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Robert A. Kotick      
    Mr. Kotick is Chief Executive Officer and a Director of Activision Blizzard, Inc., a leading global developer and publisher of interactive entertainment, positions he has held since 2008. Mr. Kotick served as Chairman and Chief Executive Officer of Activision, Inc., the predecessor to Activision Blizzard, Inc., from 1991 to 2008. Mr. Kotick is the co-founder of the Call of Duty Endowment, a nonprofit, public benefit corporation that seeks to help organizations that provide job placement and training services for veterans.

Director since 2012

 

Age: 55

 

Board Committees: Finance, Management Development

 

Other Public Company Boards: Activision Blizzard, Inc. (since 1991)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Over 26 years of experience as Chief Executive Officer of Activision Blizzard, Inc. and its predecessor, including managing complex international operations and financial transactions.

Relevant Senior Leadership/Chief Executive Officer Experience

Served 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 Experience

Significant 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

As Chief Executive Officer of Activision Blizzard, Inc., a worldwide leader in the development, publishing and distribution of high-quality interactive entertainment content and services and other media, is responsible for some of the most successful entertainment franchises, including Call of Duty®, Candy Crush™, Destiny®, Hearthstone®, Overwatch®, Skylanders® and World of Warcraft®.

Risk Oversight/Management Expertise

Extensive experience overseeing risk as Chief Executive Officer of Activision Blizzard, Inc., including developing new intellectual properties and investments in complementary business opportunities.

 

       
Maria Elena Lagomasino    
    Ms. Lagomasino is Chief Executive Officer and Managing Partner of WE Family Offices, a global family office serving high net worth families, and has held these positions since March 2013. Ms. Lagomasino served as Chief Executive Officer of GenSpring Family Offices, LLC, an affiliate of SunTrust Banks, Inc., from November 2005 through October 2012. From 2001 to 2005, Ms. Lagomasino was Chairman and Chief Executive Officer of JPMorgan Private Bank, a division of JPMorgan Chase & Co., a global financial services firm. Prior to assuming this position, she was Managing Director of The Chase Manhattan Bank in charge of its Global Private Banking Group. Ms. Lagomasino had been with The Chase Manhattan Bank since 1983 in various positions in private banking. She served as a Director of the Company from April 2003 to April 2006. She previously served as a Director of Avon Products, Inc. from October 2000 to March 2016.

Director since 2008

 

Age: 68

 

Board Committees: Compensation (Chair), Directors and Corporate Governance, Management Development

 

Other Public Company Boards: The Walt Disney Company (since 2015)

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Over 35 years of experience in the financial industry and a recognized leader in the wealth management industry. Chief Executive Officer and Managing Partner of WE Family Offices, a global family office serving high net worth families. Former Chief Executive Officer of GenSpring Family Offices, LLC, a wealth management firm. Founding member of the Institute for the Fiduciary Standard, a nonprofit formed in 2011 to provide research, education and advocacy of the fiduciary standard’s importance to investors receiving investment and financial advice.

Relevant Senior Leadership/Chief Executive Officer Experience

Serves 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 Experience

Significant international experience as Chief Executive Officer of GenSpring Family Offices, LLC and Chairman and Chief Executive Officer of JPMorgan Private Bank. During tenure with The Chase Manhattan Bank, served as Managing Director of the Global Private Banking Group, Vice President of private banking in the Latin America region and head of private banking for the western hemisphere. Over 40 years of experience working with Latin America. Exposure to international issues as a former Board member of the Americas Society and the Cuba Study Group, as a former Trustee of the National Geographic Society and as a member of the Council on Foreign Relations.

Diversity

Hispanic; female.

Risk Oversight/Management Expertise

Extensive oversight of risk associated with wealth management and investment strategies as Chief Executive Officer and Managing Partner of WE Family Offices, and as Chief Executive Officer of GenSpring Family Offices, LLC and JPMorgan Private Bank.

 

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Sam Nunn      
    Mr. Nunn is Co-Chairman of Nuclear Threat Initiative, a position he has held since 2001. He served as Chief Executive Officer of the Nuclear Threat Initiative from 2001 to June 2017. The Nuclear Threat Initiative is a nonprofit organization working to reduce the global threats from nuclear, biological and chemical weapons. He is Chairman Emeritus of the Board of Trustees of the Center for Strategic and International Studies. He served as a member of the U.S. Senate from 1972 through 1996. He previously served as a Director of Chevron Corporation from 1997 to 2011, Dell Inc. from 1999 to 2011 where he served as Lead Director, General Electric Company from 1997 to April 2013 and Hess Corporation from 2012 to May 2013.

Director since 1997; Lead Independent Director since 2014

 

Age: 79

 

Board Committees: Directors and Corporate Governance (Chair), Finance, Public Issues and Diversity Review

 

Other Public Company Boards: None

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Has served on the Company’s Finance Committee for over 20 years. Served on the Finance Committee of Dell Inc. and the Audit Committees of Dell Inc. and Scientific-Atlanta, Inc.

Relevant Senior Leadership/Chief Executive Officer Experience

Serves as Co-Chairman of the Nuclear Threat Initiative, where he served as Chief Executive Officer from 2001 to June 2017, and served as Chairman of the Board of Trustees of the Center for Strategic and International Studies from 1999 to 2015. Former Senior Partner of King & Spalding LLP, a global law firm. Served as a U.S. Senator from Georgia from 1972 to 1996.

Broad International Exposure/Emerging Market Experience

16-year public company directorship at General Electric Company, a global digital industrial company which serves customers in approximately 180 countries. 14-year public company directorship at Chevron Corporation, which has U.S. and international subsidiaries that engage in fully integrated petroleum operations, chemicals operations, mining activities, power generation and energy services. 12-year public company directorship at Dell Inc., a global information technology company. Also served as a Director of Hess Corporation, a global independent energy company. Chairman Emeritus of the Board of Trustees of the Center for Strategic and International Studies, a preeminent international policy institution, where he served as Chairman from 1999 to November 2015. Foreign policy and global military experience as a member and chairman of the U.S. Senate Committee on Armed Services during his 24-year tenure in the U.S. Senate.

Marketing Experience

Regular exposure to marketing and marketing-related technology through directorships at Dell Inc., a global information technology company, General Electric Company, a global digital industrial company, and Chevron Corporation, one of the world’s leading integrated energy companies. Over 30 years of experience with grassroots public relations interface.

Governmental or Geopolitical Expertise

Recognized leader in the U.S. on national security and foreign policy. Extensive experience in government, public and social policy and international affairs as a result of his 24 years of service as a U.S. Senator for Georgia and since 2001 as Co-Chairman, and previously as Chief Executive Officer, of the Nuclear Threat Initiative. During his tenure in the U.S. Senate, chaired the Senate Committee on Armed Services and the Permanent Subcommittee on Investigations. Also served on the Senate Intelligence and Small Business Committees. Continues his service in the public policy arena as Distinguished Professor in the Sam Nunn School of International Affairs at Georgia Institute of Technology. Served as Chair of the Public Responsibilities Committee at General Electric Company and served as Chair of the Public Policy Committee at Chevron Corporation.

 

James Quincey      
    Mr. Quincey is President and Chief Executive Officer of the Company. He held the position of President and Chief Operating Officer of the Company from August 2015 through April 30, 2017 and succeeded Muhtar Kent as Chief Executive Officer of the Company on May 1, 2017. Mr. Quincey served as President of the Company’s Europe Group from January 2013 to August 2015, and as President of the Northwest Europe and Nordics business unit from October 2008 to January 2013. From December 2005 to October 2008, he served as President of the Mexico Division, and from December 2003 to December 2005, he served as President of the South Latin Division. Mr. Quincey joined the Company in 1996 as Director, Learning Strategy for the Latin America Group, and went on to serve in a series of operational roles of increasing responsibility in Latin America, leading to his appointment as President of the South Latin Division in 2003.

Director since 2017

 

Age: 53

 

Board Committees: N/A

 

Other Public Company Boards: None

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

Extensive financial experience as President and Chief Executive Officer and in other leadership positions in the Company, including Chief Operating Officer, managing complex financial transactions, mergers and acquisitions, business strategy and international operations.

Relevant Senior Leadership/Chief Executive Officer Experience

President and Chief Executive Officer of the Company since May 1, 2017. He also served as President and Chief Operating Officer of the Company from August 2015 through April 30, 2017 and as President of the Europe Group from January 2013 to August 2015.

Broad International Exposure/Emerging Market Experience

Over 21 years of Coca-Cola system experience including extensive experience in international markets, such as Latin America and Europe. Responsibility for all of the Company’s operating units worldwide as President and Chief Operating Officer and currently as President and Chief Executive Officer. Member of the Board of Directors of the United States-China Business Council, the Consumer Goods Forum and the U.S.-UK Business Council.

Extensive Knowledge of the Company’s Business and/or Industry

President and Chief Executive Officer (since May 1, 2017), President and Chief Operating Officer (2015 through April 30, 2017), President of the Europe Group (2013 to 2015), President of the Northwest Europe and Nordics business unit (2008 to 2013), and President of the Mexico Division (2005 to 2008) of the Company. Joined the Company in 1996 as Director, Learning Strategy for the Latin America Group and held various operational roles within the Coca-Cola system.

Innovation/Technology Experience

Extensive innovation experience at the Company. As President and Chief Operating Officer, Mr. Quincey was responsible for the Company’s information technology function. In addition, as President of the Europe Group, Mr. Quincey implemented innovative strategies to improve the Company’s execution and brand portfolio. As President of the Northwest Europe and Nordics business unit, he oversaw the Company’s acquisition of innocent juice in 2009. During his tenure in Latin America, Mr. Quincey was instrumental in developing and executing a successful brand, pack, price and channel strategy, which has now been replicated in various forms throughout the Company’s global system, and in creating the Company’s current juice platform in Mexico under the Del Valle trademark through joint ventures with the Company’s bottling partners.

 

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Caroline J. Tsay      
    Ms. Tsay is Chief Executive Officer of Compute Software, Inc., an enterprise cloud infrastructure software company, and has held this position since January 2017. From March 2013 to December 2016, she served as Vice President and General Manager of Software at Hewlett Packard Enterprise Company (“HPE”), an information technology company. From April 2007 to March 2013, Ms. Tsay held several product leadership positions across the consumer search, e-commerce and advertising businesses at Yahoo! Inc., a digital media company. She previously served as a Director of Travelzoo Inc. from August 2015 to May 2017.

Director Nominee

 

Age: 36

 

Board Committees: Audit (if elected)

 

Other Public Company Boards: Rosetta Stone Inc. (since 2014) and Morningstar, Inc. (since 2017)

 

     
Key Qualifications and Experience:  

Relevant Senior Leadership/Executive Officer Experience

Has served as Chief Executive Officer of Compute Software, Inc. since January 2017. Served as Vice President and General Manager of Software at HPE from March 2013 to December 2016.

Marketing Experience

At Compute Software, Inc. is responsible for developing an enterprise software platform for customers running in the cloud. At HPE, was responsible for engaging customers and partners through several new digital experiences, digital marketing, and specialized sales models to drive growth in new customers and revenue. At Yahoo! Inc., held leadership positions across the consumer search, e-commerce and advertising businesses. Advisory board member of AdRoll, a marketing technology company that provides performance advertising and prospecting solutions to advertisers worldwide.

Innovation/Technology Experience

As Chief Executive Officer and Co-Founder of Compute Software, Inc., responsible for developing the artificial intelligence and decision sciences-based software platform that dynamically optimizes cloud resource decisions and maximizes business value for companies running in the cloud. At HPE, created a new business and platform for offering customers enterprise software, including DevOps, Cybersecurity, Big Data and Application Development software. At Yahoo! Inc., was Senior Director of Product Management for Yahoo! Search and E-Commerce where she launched consumer internet innovations that drove 500 million daily visits and $3.5 billion in revenue. Prior to Yahoo! Inc., spent three years at International Business Machines Corporation as a senior consultant focused on providing supply chain solutions to clients in the retail, high tech, and travel industries. Recognized as one of The National Diversity Council’s 2015 Top 50 Most Powerful Women in Technology.

Diversity

Asian; female.

Risk Oversight/Management Expertise

Extensive experience overseeing risk associated with the development and growth of enterprise software and consumer internet businesses as Chief Executive Officer and Co-Founder of Compute Software, Inc., and in her product leadership roles with HPE and Yahoo! Inc. Serves on the Audit Committee of Morningstar, Inc. and is Chair of the Business Advisory Committee at Rosetta Stone Inc.

 

David B. Weinberg      
    Mr. Weinberg is Chairman of the Board and Chief Executive Officer of Judd Enterprises, Inc., a private, investment-management office with diverse interests in a variety of asset classes, and President of Digital BandWidth LLC, its private, early-stage technology investing affiliate, and has held these positions since 1996. From September 1989 to June 1996, Mr. Weinberg was a partner in the corporate, securities and investment-management practice of Mayer, Brown & Platt, a leading international law firm.

Director since 2015

 

Age: 66

 

Board Committees: Audit

 

Other Public Company Boards: None

 

     
Key Qualifications and Experience:  

High Level of Financial Experience

In his position as Chairman and Chief Executive Officer of Judd Enterprises, Inc., oversees substantial assets in a wide variety of asset classes. Significant experience in reviewing financial statements as an investor, and as a securities lawyer when structuring transactions. Previously served on the Audit Committee and currently serves on the Executive, Finance and Investment Committees of Northwestern University.

Relevant Senior Leadership/Chief Executive Officer Experience

Since 1996, has served as Chairman and Chief Executive Officer of Judd Enterprises, Inc., a private, investment-management office, and President of Digital BandWidth LLC, its private early-stage technology investing affiliate.

Broad International Exposure/Emerging Market Experience

As Chief Executive Officer of Judd Enterprises, Inc., oversees international investments. As a partner in the corporate, securities and investment management practice of the Mayer, Brown & Platt law firm, structured cross-border investment management transactions. Serves on the Board of Trustees of the Brookings Institution, a think tank whose mission includes improving governance at the global level. Also serves on the Investment Committee of Northwestern University, overseeing substantial exposure to emerging markets. Exposure to international issues as a member of the Council on Foreign Relations and the International Council of the Belfer Center for Science and International Affairs of the Kennedy School of Government at Harvard University.

Innovation/Technology Experience

Extensive entrepreneurial experience as President of Digital Bandwidth LLC, overseeing investments in early stage companies focusing on technologies, including wireless networks, speech recognition, cybersecurity and radio frequency identification tags.

Risk Oversight/Management Expertise

Extensive risk oversight and management experience overseeing a private investment management office as Chief Executive Officer of Judd Enterprises, Inc. As a partner in the corporate, securities and investment-management practice of the Mayer, Brown & Platt law firm, advised clients on a broad range of regulatory and transactional matters. Additional risk oversight experience through former service on the Audit Committee and current service on the Executive, Finance and Investment Committees of Northwestern University.

 

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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  
                 
  Oversight of Strategy   Oversight of Risk   Succession Planning  
 

  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.

 

 

  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.

 

 

  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 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.

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.

 

Oversight of Risk

Inherent in the Board’s responsibilities is an understanding and oversight of 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;

 

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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.

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 program, a Risk Council and Risk Steering Committee, regular internal management Disclosure Committee meetings, Codes of Business Conduct, robust product quality standards and processes, a strong Legal Department and Ethics and Compliance Office, and a comprehensive internal and external audit process. The Board and the Audit Committee monitor and oversee the evaluation of the effectiveness of the internal controls and the risk management program. Management communicates routinely with the Board, Board committees and individual Directors on the significant risks identified and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management.

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, 2017 (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 also may materially adversely affect the Company’s business, financial condition or results of operations in future periods.

Management 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.

Board Leadership Structure

 

The Company’s governance framework provides the Board with the flexibility to select the appropriate Board leadership structure for the Company. In making 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.

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 Board leadership structure is an important topic for many shareowners, and 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 comprised of a Chairman of the Board, who is not independent, a Chief Executive Officer, a Lead Independent Director, Board committees led primarily by independent Directors and active engagement by all Directors. The totality of the work of the Board is spread through our committee structure, and this structure ensures strong, independent leadership by a majority of Directors.

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.

The duties and responsibilities of the Chairman of the Board, 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.

 

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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.

 

  DUTIES AND RESPONSIBILITIES  
             
  Chairman of the Board   Chief Executive Officer  
         
 

  Presides over meetings of the Board.

  Presides over meetings of shareowners.

  Consults and advises the Board and its committees on the business and affairs of the Company.

  Performs such other duties as may be assigned by the Board.

 

  In general charge of the affairs of the Company, subject to the overall direction and supervision of the Board and its committees and subject to such powers as reserved by the Board.

 
       
    Lead Independent Director  
       
 

  Presides at all meetings of the Board at which the Chairman of the Board is not present, including all meetings of independent Directors and non-employee Directors.

  Encourages and facilitates active participation of all Directors.

  Serves as a liaison between the independent Directors and the Chairman of the Board on sensitive issues and otherwise when appropriate.

  Approves Board meeting materials for distribution to and consideration by the Board.

  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.

  Approves Board meeting schedules to assure that there is sufficient time for discussion of all agenda items.

 

 

  Has the authority to call meetings of the independent Directors.

  Leads the Board’s annual evaluation of the Chairman of the Board and Chief Executive Officer.

  Monitors and coordinates with management on corporate governance issues and developments.

  Available to advise the committee chairs in fulfilling their designated roles and responsibilities to the Board.

  Available for consultation and communication with shareowners where appropriate, upon reasonable request.

  Performs such other functions as the Board or other Directors may request.

 

 

 

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Board Committees

 

The Board has an Audit Committee, a Compensation Committee, a Committee on Directors and Corporate Governance, an Executive Committee, a Finance Committee, a Management Development Committee and a Public Issues and Diversity Review Committee. The Board has adopted a written charter for each of these committees, which is available on the Company’s website www.coca-colacompany.com, by clicking on “Investors” and then “Corporate Governance.” Information about each committee is provided below.

AUDIT COMMITTEE

 

Meetings Held in 2017: 9
Members1   Independence2   Skills/Qualifications
Ronald W. Allen
(Chair)
   
Marc Bolland    
Richard M. Daley    
David B. Weinberg    
  
1Ms. Tsay will be appointed to the Audit Committee, if elected.
  
2The Board has designated each of Messrs. Allen and Weinberg as an “Audit Committee financial expert.” Each member is financially literate and meets the independence requirements of the NYSE, the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the Company’s Corporate Governance Guidelines.
  
Additional information regarding the Audit Committee can be found beginning on page 84.

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 programs.

 

Oversees the Company’s enterprise risk management (“ERM”) program and has direct oversight over certain risks within the ERM framework. Periodically receives reports on and discusses governance of the Company’s risk assessment and risk management processes and reviews significant risks and exposures identified to the Committee (whether financial, operating or otherwise), and management’s steps to address them.

 

Risk Oversight Focus Area:

The Company’s financial statements, the financial reporting process, accounting and legal matters, the internal audit function, ethics programs (including the Codes of Business Conduct), quality and food safety programs, workplace and distribution safety programs and information technology security programs, including cybersecurity.


COMPENSATION COMMITTEE

Meetings Held in 2017: 9
Members1   Independence2   Skills/Qualifications
Maria Elena
Lagomasino (Chair)
   
Helene D. Gayle    
Alexis M. Herman    
  
1Mr. Davis will be appointed to the Compensation Committee, if elected.
  
2Each member of the Compensation Committee meets the independence requirements of the NYSE, the Internal Revenue Code of 1986, as amended (the “Tax Code”) and the Company’s Corporate Governance Guidelines.
  
Additional information regarding the Compensation Committee can be found beginning on page 46.

Primary Responsibilities:

Responsible for evaluating and approving 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, 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.

 

Understands and considers shareowner viewpoints on compensation.

 

Risk Oversight Focus Area:

The Company’s compensation philosophy and programs, including incorporating features that mitigate risk without diminishing the incentive nature of compensation.


 

Legend: Key Qualifications and Experience (see page 16)

High level
of financial
experience
Relevant senior leadership/
Chief Executive Officer
experience
Broad international
exposure/emerging
market experience
Diversity of race, ethnicity, gender,
age, cultural background or
professional experience
Extensive knowledge of
the Company’s business
and/or industry
Marketing
experience
Innovation/
technology
experience
Governmental
or geopolitical
expertise
Risk oversight/
management
expertise

 

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COMMITTEE ON DIRECTORS AND CORPORATE GOVERNANCE

 

Meetings Held in 2017: 5
Members   Independence1   Skills/Qualifications
Sam Nunn (Chair)    
Ana Botín    
Richard M. Daley    
Barry Diller    
Maria Elena
Lagomasino
   
  
1Each member of the Committee on Directors and Corporate Governance meets the independence requirements of the NYSE and the Company’s Corporate Governance Guidelines.
  
Additional information regarding the Committee on Directors and Corporate Governance can be found beginning on page 13.

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

Meetings Held in 2017: 1
Members   Independence   Skills/Qualifications
Muhtar Kent (Chair)    
Herbert A. Allen    
Barry Diller    

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

Meetings Held in 2017: 5
Members   Independence   Skills/Qualifications
Barry Diller (Chair)    
Herbert A. Allen    
Ronald W. Allen    
Robert A. Kotick    
Sam Nunn    

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)

High level
of financial
experience
Relevant senior leadership/
Chief Executive Officer
experience
Broad international
exposure/emerging
market experience
Diversity of race, ethnicity, gender,
age, cultural background or
professional experience
Extensive knowledge of
the Company’s business
and/or industry
Marketing
experience
Innovation/
technology
experience
Governmental
or geopolitical
expertise
Risk oversight/
management
expertise

 

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MANAGEMENT DEVELOPMENT COMMITTEE

Meetings Held in 2017: 4
Members   Independence   Skills/Qualifications
Herbert A. Allen (Chair)    
Barry Diller    
Robert A. Kotick    
Maria Elena Lagomasino    

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 2017: 4
Members1   Independence   Skills/Qualifications
Alexis M. Herman
(Chair)
   
Helene D. Gayle    
Sam Nunn    
1 Howard G. Buffett served on the Public Issues and Diversity Review Committee until the 2017 Annual Meeting. Mr. Buffett did not stand for reelection at the 2017 Annual Meeting.

Primary Responsibilities:

Helps the 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.

Risk Oversight Focus Areas:

Issues that could pose significant reputational risk to the Company.


 

Meetings and Attendance

 

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, the Board held six meetings, and committees of the Board held a total of 37 meetings. Overall attendance at such meetings was approximately 99%. 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.

  

Legend: Key Qualifications and Experience (see page 16)

High level
of financial
experience
Relevant senior leadership/
Chief Executive Officer
experience
Broad international
exposure/emerging
market experience
Diversity of race, ethnicity, gender,
age, cultural background or
professional experience
Extensive knowledge of
the Company’s business
and/or industry
Marketing
experience
Innovation/
technology
experience
Governmental
or geopolitical
expertise
Risk oversight/
management
expertise

 

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ADDITIONAL GOVERNANCE MATTERS

Shareowner Engagement

 

Our Board believes that shareowners should have line 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 relationships with our shareowners through an engagement program that is management-led and overseen by the Board.

                          
Shareowner Engagement    
Our longstanding commitment to shareowner engagement includes:
An engagement program that is management-led and overseen by the Board
Dedicated resources to actively engage with shareowners on a variety of topics throughout the year
Engagements designed to address questions and concerns, seek input and provide perspective on Company policies and practices
Feedback provided to the Board on a regular basis and reflected in enhancements to policies and practices

 

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.

Shareowner 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.

In addition to direct engagement, the Company has instituted a number of complementary mechanisms that allow shareowners to effectively communicate a point of view with the Board, including:

the annual election of Directors and a majority vote standard (see page 17);

the annual advisory vote 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 page on our Company website (see page 95);

the ability to direct communications to individual Directors or the entire Board (see page 96);

adoption of a proxy access bylaw (see page 17); and

a quarterly newsletter for our shareowners (see www.coca-colacompany.com/shareowner-newsletter-signup).

Public Policy Engagement

 

We participate in public policy discussions on issues related to our industry and business priorities, our more than 700,000 system associates, our shareowners and the communities we serve.

In the U.S., 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 Issues and Diversity Review 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 Company website, www.coca-colacompany.com, by clicking on “Investors” and then “Public Policy Engagement.”

Sustainability

 

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

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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-hedging policy prohibits Directors, the Company’s executive officers and other designated employees from purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of the Company’s Common Stock, including prepaid variable forward contracts, equity swaps, collars and exchange funds. Directors, the Company’s executive officers and other designated employees are also prohibited from 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 to 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.

Codes of Business Conduct

 

The Company has adopted a Code of Business Conduct for Non-Employee Directors. In addition, the Company has adopted 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 at www.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 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.

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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 Charters on the Company’s website, www.coca-colacompany.com, by clicking on “Investors” and then “Corporate Governance.” Instructions on how to obtain copies of these materials are included in the response to question 29, on page 96.

Communicate with the Board

 

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 to asktheboard@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 shall 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.

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” page of our website, www.coca-colacompany.com/contact-us.

 

DIRECTOR 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, 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.

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 entity of the Company’s size and scope.

2017 Annual Compensation

 

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

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April 1 is not a business day). 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 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.

The following table details the total compensation of the Company’s non-employee Directors for the year ended December 31, 2017.

2017 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)

Herbert A. Allen

$

70,000

$

200,000

$

0

$

0

$

0

$

281

 

$ 270,281

Ronald W. Allen

 

70,000

 

200,000

 

0

 

0

 

0

 

3,167

 

273,167

Marc Bolland

 

50,000

 

200,000

 

0

 

0

 

0

 

198

 

250,198

Ana Botín

 

50,000

 

200,000

 

0

 

0

 

0

 

198

 

250,198

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

Barry Diller

 

70,000

 

200,000

 

0

 

0

 

0

 

3,027

 

273,027

Helene D. Gayle

 

50,000

 

200,000

 

0

 

0

 

0

 

198

 

250,198

Alexis M. Herman

 

70,000

 

200,000

 

0

 

0

 

0

 

8,882

 

278,882

Robert A. Kotick

 

50,000

 

200,000

 

0

 

0

 

0

 

198

 

250,198

Maria Elena Lagomasino

 

70,000

 

200,000

 

0

 

0

 

0

 

13,213

 

283,213

Sam Nunn

 

70,000

 

200,000

 

0

 

0

 

0

 

41,887

 

311,887

David B. Weinberg

 

50,000

 

200,000

 

0

 

0

 

0

 

1,046

 

251,046

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.

Fees 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, whether or not such fees were deferred. In addition to the $50,000 annual cash fees, each of Mses. Herman and Lagomasino, and Messrs. H. Allen, R. Allen, Diller and Nunn received an additional $20,000 for service as a committee chair.

Ms. Botín and Messrs. Daley, Kotick and Weinberg each deferred their 2017 cash compensation into 1,175 share units. Ms. Lagomasino and Messrs. R. Allen, Diller and Nunn each deferred their 2017 cash compensation into 1,646 share units. 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.

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.

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Director

Outstanding Share Units as

of 12/29/2017

Mr. H. Allen

87,662

Mr. R. Allen

88,984

Mr. Bolland

14,889

Ms. Botín

27,921

Mr. Buffett

31,679

Mr. Daley

39,107

Mr. Diller

123,999

Ms. Gayle

25,372

Ms. Herman

48,404

Mr. Kotick

37,270

Ms. Lagomasino

53,615

Mr. Nunn

151,344

Mr. Weinberg

17,252

All Other Compensation (Column (g))

As described further below, the 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). In addition, infrequently, spouses and guests of Directors may ride along 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.

Perquisites and Other Personal Benefits

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, 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 2017 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 gifts was $22,000.

Name

Matching Gifts

Mr. R. Allen

$

2,000

Mr. Nunn

 

20,000

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 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.

Insurance Premiums

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 2017 was $2,158.

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 per Director per year.

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DIRECTOR INDEPENDENCE AND RELATED PERSON TRANSACTIONS

Independence Determinations

 

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.

Categorical Standards

The following will not be considered material relationships that would impair a Director’s independence:

Immaterial Sales/Purchases

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 Indebtedness

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 Position

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 Ownership

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 Nonprofit Relationship

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.

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 2017 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, who served as a Director for a portion of 2017, was 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.

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All of the Directors who serve as members of the Audit Committee, 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 independence requirements, and the Compensation Committee members satisfy the additional 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

Ana Botín

Immaterial Sales/Purchases

The Board examined the Company’s relationship with Banco Santander, S.A. 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 Santander, S.A., (ii) the Company’s investment of excess cash with Banco Santander, S.A. in the ordinary course of business generated market rate interest returns and the payments to Banco Santander, S.A. were for underwriting and other banking services in the ordinary course of business and (iii) the Company has had a relationship with Banco Santander, S.A. for many years prior to Ms. Botín’s service as a Director of the Company.

Howard G. Buffett

Immaterial Sales/Purchases

The Board examined the Company’s relationship with Berkshire Hathaway Inc. (“Berkshire Hathaway”) and its subsidiaries and affiliates. Howard G. Buffett is a Director of Berkshire Hathaway and his father, Warren E. Buffett, is the Chairman of the Board, Chief Executive Officer and major stockholder of Berkshire Hathaway. This relationship is described beginning on page 40. The Board determined that the relationship was not material since (i) the amounts involved were less than 1% of the consolidated gross revenues of Berkshire Hathaway; (ii) the payments made and received were for various products and services in the ordinary course of business; and (iii) the Company has had a relationship with most of these entities for many years prior to when they were owned by Berkshire Hathaway and prior to Mr. Buffett’s service as a Director of the Company.

Barry Diller

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.

 

 

 

Related Person Transaction Policy and Process

A “Related Person Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or 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 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, 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; and

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 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 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.

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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.

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, the list of approximately 3,900 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 400 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 Transactions

The Board, acting through the Committee on Directors and Corporate Governance, believes that the following related person transactions are reasonable and fair to the Company.

Herbert A. 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 since 1977 in a building owned by one of our subsidiaries and located in New York City. 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, ACL paid approximately $6.4 million in rent and related expenses. In the opinion of management, the terms of the lease are 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.

Howard G. Buffett and Berkshire Hathaway. The father of Howard G. Buffett, who served as a Director 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

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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.

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SHARE OWNERSHIP

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 2017 Summary Compensation Table on page 65, and our Directors, Director nominees and executive officers as a group, all as of February 26, 2018. Unless otherwise noted, voting power and investment power in Common Stock are exercisable solely by the named person.

Name

Aggregate

Number of Shares

Beneficially Owned

Percent of

Outstanding

Shares1

 

Additional Information

Herbert A. Allen

18,098,576

*

 

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 87,662 share units deferred under the Directors’ Plan, which are settled in cash.

Ronald W. Allen

24,000

*

 

Includes 4,000 shares held by a family member over which Mr. Allen has disclaimed beneficial ownership. Does not include 88,984 share units deferred under the Directors’ Plan, which are settled in cash.

Marc Bolland

10,000

*

 

Does not include 14,889 share units deferred under the Directors’ Plan, which are settled in cash.

Ana Botín

2,500

*

 

Shares held by a Spanish limited company of which Ms. Botín and her husband are the indirect beneficial owners. Does not include 27,921 share units deferred under the Directors’ Plan, which are settled in cash.

Richard M. Daley

6,500

*

 

Shares held by a trust of which Mr. Daley is sole trustee and beneficiary. Does not include 39,107 share units deferred under the Directors’ Plan, which are settled in cash.

Christopher C. Davis

20,000

*

 

 

Barry Diller

6,000,000

*

 

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 123,999 share units deferred under the Directors’ Plan, which are settled in cash.

Helene D. Gayle

3,000

*

 

Does not include 25,372 share units deferred under the Directors’ Plan, which are settled in cash.

Alexis M. Herman

2,000

*

 

Does not include 48,404 share units deferred under the Directors’ Plan, which are settled in cash.

Robert A. Kotick

70,018

*

 

Includes 18 shares held by a family member through the Uniform Transfers to Minors Act. Does not include 37,270 share units deferred under the Directors’ Plan, which are settled in cash.

Maria Elena
Lagomasino

23,631

*

 

Does not include 53,615 share units deferred under the Directors’ Plan, which are settled in cash.

Sam Nunn

2,000

*

 

Does not include 151,344 share units deferred under the Directors’ Plan, which are settled in cash.

Caroline J. Tsay

1,000

*

 

 

 

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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
(31 persons)

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.

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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
3555 Farnam Street, Suite 1440
Omaha, Nebraska 68131

400,000,000

9.38%

The Vanguard Group2
100 Vanguard Blvd.
Malvern, Pennsylvania 19355

284,276,178

6.67%

BlackRock, Inc.3
55 East 52nd Street
New York, New York 10055

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.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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 our review of the reports filed for fiscal year 2017 and written representations that no other reports were required, we believe that all Section 16(a) reports were filed on a timely basis.

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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:

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 on page 46 and the Compensation Tables beginning on page 65.

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 have made several key enhancements to our compensation programs to continue to improve the link between compensation and the Company'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 Compensation Committee will take into account 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 2019 Annual Meeting of Shareowners.

The Board of Directors recommends a vote FOR the advisory vote to approve executive compensation.

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COMPENSATION DISCUSSION AND ANALYSIS

Message from the Compensation Committee

 

2017 was a pivotal year for our Company, and we look different today than we did just one year ago. In addition to completing the refranchising of our bottling operations in the U.S. and China, we executed our leadership succession plan and transitioned to a new Chief Executive Officer, James Quincey, who announced his vision for the Company, as we continue to evolve to a total beverage company. Our growth strategy centers around a new operating model: where increased responsibility is placed on our local business units to accelerate performance; where we leverage new technologies to digitize our enterprise, externally—with customers and consumers—and internally to increase efficiency and productivity; where our corporate center is leaner and more agile, with our focus reoriented to key strategic initiatives, policy and governance; where we unlock the power of our people to drive growth; and where we deepen our enabling services to improve employee engagement. We also strengthened our long-standing link between the sustainability of our business and the sustainability of the communities we serve.

 

This new operating model is designed to enable an accountable, performance-driven growth culture—one with fewer employees, who are externally focused, empowered, fast and willing to take informed risks that will result in greater return for our shareowners. In short, we are focused on accelerating our transformation to a high-performing growth business.

 

Because the Company’s talent, incentive and reward programs are integral to achieving our growth strategy, in 2017 we undertook a comprehensive review of our compensation programs to ensure a continued focus on driving business growth and our desired high-performance culture. During the year-long review process, the Company asked for feedback from over 1,100 employees around the world, listened to feedback from you, our shareowners, reviewed external market data and researched the correlation between performance metrics and shareowner return over the past six years. As a result, three key focus areas for our compensation design emerged as we looked to refine our compensation and talent strategy for 2018 and future years:

 

Growth: Motivate and reward growth;
   
Differentiation and segmentation: Invest in our top contributors and those with the greatest potential to drive future growth, giving everyone the opportunity to contribute and reach their full potential, while balancing our ability to attract and retain key talent; and
   
Simplicity and transparency: Provide simplicity and a better line of sight for employees while also focusing on key growth metrics and driving long-term shareowner value.
   

Consequently, beginning in 2018, annual incentive plan performance metrics will be divided equally between net operating revenue and operating income, and the long-term incentive plan performance metrics will be divided equally among net operating revenue, earnings per share and free cash flow. All participants in the annual and long-term incentive plans will be measured in part against the performance of the total Company, rather than just their operating unit or function, to ensure that everyone is invested in the total growth of the Company and is focused on its long-term success. We believe these metrics have a strong correlation to shareowner value, are easy to understand and will drive and reward growth behaviors and actions. We will continue to have a standing meeting each year dedicated to test the robustness and rigor of our incentive metrics and to drive our programs to adhere to our equity stewardship guidelines.

 

Progress toward non-financial goals that are critical to our business and reflect our commitment to sustainability also adds value for our shareowners and other stakeholders. However, we listened to shareowners regarding the level of discretion that was exercised in the executive annual incentive plan in past years and developed scorecards for our most senior executives that identify the categories on which they will be assessed for the 2018 performance year and thereafter. We will continue to develop more rigor around setting and assessing non-financial goals. We also reduced the maximum payout, and added a minimum threshold of performance that must be achieved before any payout is earned, under the executive annual incentive plan for 2018 and thereafter.

 

You will see in the rest of this Compensation Discussion and Analysis the details of our compensation programs, including the specific decisions we made for the 2017 Named Executive Officers and the rationale for them. We remain committed to listening to your feedback as we continue to evaluate and refine the Company’s compensation programs.

 

     
Maria Elena Helene D. Alexis M.
Lagomasino Gayle Herman

 

 

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Compensation Program Enhancements for 2018

 

We continue to make important enhancements to our compensation programs in order to further 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. Reduced the maximum payout for the executive annual incentive plan from 250% to 200% for 2018 and thereafter. 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. 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. 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.

 

Checklist of Compensation Practices

 
What We Do   What We Don’t Do
     

   Vast majority of pay is performance-based and not guaranteed

 

   Align pay and performance

 

   Engage in a rigorous target-setting process for incentive metrics

 

   Adhere to Equity Stewardship Guidelines

 

   Apply share ownership and share retention policies

 

   Provide limited perquisites with sound business rationale  

 

   Include “double-trigger” change in control provisions in equity awards

 

   Prohibit hedging and short sales by executive officers and Directors

 

   Discourage pledging of Company stock and require pre-approval

 

   Regularly assess the risk-reward balance of our compensation programs in order to mitigate undue risks in our programs

 

   Include clawback provisions in our key compensation programs

 

   Generally, do not utilize employment contracts (unless required by law)

 

   No dividends or dividend equivalents on unearned PSUs

 

   No repricing of underwater stock options

 

   No tax gross-ups for personal aircraft use or financial planning

 

   No special change in control severance provisions for executive officers  

 

   No tax gross-ups related to change in control

 

 

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2017 Performance at a Glance

 

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.

2017 ACHIEVEMENTS

   Executed leadership succession plan and transitioned to a new CEO

 

   Implemented new operating model to support faster growth and empower field operations to act with more speed and independence

 

   Refined and simplified our incentive metrics for 2018 to better align with our growth performance and shareowner value creation while providing a better line of sight for employees into what they can affect

 

   Introduced 500+ new products into the market worldwide, including the successful global roll-out of Coke Zero Sugar in 20 markets

 

   Entered the fast-growing U.S. ready-to-drink coffee category in February 2017 and gained value share for the full year

 

   Diversified our growing portfolio through strategic investments, including Topo Chico, a sparkling water brand in the U.S., and AdeS, a plant-based beverage brand in Latin America

 

   Continued focus on driving revenue growth, led by North America, which grew net operating revenues by 4%

 

   Expanded our operating margin driven by productivity initiatives and refranchising

 

   Announced incremental $800 million in productivity savings through 2019

 

   Completed the refranchising of Company-owned bottling operations in the U.S. and China

 

 

Operating Results

VALUE SHARE     REVENUE   (15)%
Reported Net Operating Revenues
  +3%
Organic Revenues (Non-GAAP)
UNIT CASE VOLUME 0%     PROFIT   (17)%
Reported Income from Continuing
Operations Before Income Taxes
  +9%
Comparable Currency Neutral Income from
Continuing Operations Before Income Taxes
(Structurally Adjusted) (Non-GAAP)

 

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, as applicable, as well as the impact of changes in foreign currency exchange rates. Comparable currency neutral 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, the impact of changes in foreign currency exchange rates, and the impact of structural changes. See Annex C for a reconciliation of non-GAAP financial measures to our results as reported under GAAP.

 

Return to Shareowners

TOTAL SHAREOWNER RETURN1 103% 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

 

1

Cumulative stock price appreciation plus dividends, with dividends reinvested quarterly.

2

Net share repurchases is a non-GAAP financial measure that reflects the net amount 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.

3

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.

 

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Our Compensation Philosophy

 

While we consider a number of factors in our pay decisions, we are guided by three core principles:

 

1. Pay for Performance. The great majority of pay for executives should be at-risk and performance-based with metrics aligned to the Company’s short-term and long-term financial results and business strategy and with a clear connection to each employee’s individual contribution and to increased value for our shareowners.
   
2. Maintain programs that will attract, engage and retain critical talent and drive future growth. Our compensation programs should be designed to invest in and reward talent with the greatest potential to drive the long-term growth of our Company, while holding employees accountable to the Company’s strategy and values.
3. Consider the Coca-Cola system. Our employees are required to operate and have influence in the context of our broad and complex global Coca-Cola system, which includes our independent bottling partners around the globe. While the Company had $35.4 billion in reported net operating revenue in 2017, the Coca-Cola system generates more than $100 billion in revenues, operates in over 200 countries and employs more than 700,000 people. Our executives and employees must not only manage our business but also support our bottlers and other partners. This alignment and a shared vision of success are critical to drive long-term growth.


Key Linkages between Pay and Company Performance

 

In the context of our compensation programs, we assess Company performance in two primary ways:

1.

The Company’s operating performance, including results against long-term growth targets; and

2.

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 SEC.

 

 

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Compensation Decisions for Named Executive Officers

 

The 2017 compensation decisions were approved for our Named Executive Officers based on Company and individual performance.

Chief Executive Officer     

 

James Quincey

President and Chief Executive Officer*

 

 

2017 Performance Highlights:

 

KEY ACCOMPLISHMENTS

 

LEADERSHIP

   Continued the transformation of the Company to focus on a new growth strategy, which includes the consumer-centric Beverages for Life approach of evolving to a total beverage company.

 

   Built a leadership team to support the Company’s new growth strategy.

 

   Elevated the Chief Innovation Officer position and, for the first time at the Company, appointed a Chief Growth Officer, which resulted in a broader and deeper approach to portfolio development built on a brand framework of explorer (emerging brand experimentation), challenger (potential future category leaders), and leader (established brands managed to maximize long-term profit).

 

   Led the Company’s development of its new World Without Waste plan in 2017, which was unveiled in early 2018. One of the Company’s goals is to help collect and recycle a bottle or can for every one it sells by 2030, bringing back the equivalent of 100% of its packaging.

 

   Announced that the Company supports the current recommendation by several leading health authorities, including the World Health Organization, that people should limit their intake of added sugar to no more than 10% of their total energy/ calorie consumption per day. To help consumers make progress toward this goal, the Company is reducing the sugar in its beverages, reducing package sizes, launching new beverages with less added sugar and using marketing efforts to make people more aware of low and no-sugar options.

 

 OPERATIONAL

   Announced an incremental $800 million in productivity savings through 2019.

 

   Led the Company to expand its consumer-centric product portfolio, with a continued focus on value over volume, which included the launch of more than 500 products around the world, including many low- and no-calorie options.

 

   Expanded the Company’s portfolio, including entering the fast-growing U.S. ready-to-drink coffee category, introducing two U.S. brands, Honest and smartwater, into multiple international markets, and successfully launching the global roll-out of Coke Zero Sugar in 20 markets.

 

   Provided system leadership to support continued refranchising efforts in North America, Africa, China and Latin America.

 

 PEOPLE AND CULTURE

   Introduced a new operating model designed to accelerate performance, increase efficiency and productivity, drive growth and improve employee engagement.

 

   Drove the design and implementation of a new compensation strategy to align total employee rewards to the growth strategy of the Company.

 

   Led efforts to change the Company’s culture to emphasize speed, agility, accountability and a test-and-learn approach.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Effective May 1, 2017, when Mr. Quincey assumed the role of Chief Executive Officer, his base salary was increased to $1,300,000. Effective April 1, 2018, Mr. Quincey’s base salary will be increased to $1,500,000 to align his salary to the competitive market.

 

Annual Incentive: $2,368,493, comprised of $1,994,520 from applying the Company Performance Factor (80% for 2017) under the plan formula and $373,973 for individual performance (see page 56). The individual performance amount was determined based on the 2017 performance highlights described above.

 

Long-Term Incentive: Mr. Quincey received a long-term incentive grant in February 2017 valued at $6,114,152, split into 2/3 performance share units and 1/3 stock options.

 

 

*   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.

 


 

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Chairman of the Board and Former Chief Executive Officer     

 

Muhtar Kent

Chairman of the Board and Former Chief Executive Officer*

 

 

2017 Performance Highlights:

 

In 2017, Mr. Kent served as Chairman of the Board and Chief Executive Officer through April 30, 2017. He continued as Chairman when Mr. Quincey became Chief Executive Officer on May 1, 2017. Before this change, Mr. Kent worked to build a strong foundation and created processes to ensure a smooth, seamless and well-executed transition. He provided guidance to Mr. Quincey and worked closely with the Board on the Company’s growth strategy and redesigned operating model. The Company continued to make strong progress on its refranchising plans. The Company and its bottling partners in Latin America also closed the acquisition of Unilever’s AdeS plant-based beverage business, expanding the Company’s portfolio of functional drinks in the region. Under Mr. Kent’s leadership, the Company and its global bottling partners reported 133% estimated water replenishment in 2017, with the Company being the first Fortune 500 company to replenish the equivalent of all of the water it uses globally. Mr. Kent continued his strong leadership in accelerating the development of diverse leadership talent, and he continued to be the executive sponsor of the Women’s Leadership Council. By mid-year 2017, the Company’s 5by20 program had empowered more than 1.9 million women in 66 countries, up from 1.75 million women and 64 countries by the end of 2016.

 

As Chairman, Mr. Kent continued to lead the Board and actively engaged Directors and committee chairs in all aspects of the business. Mr. Kent led an orderly and well-defined process for selecting two new Directors to stand for election to the Board at the 2018 Annual Meeting: Caroline Tsay and Christopher Davis. In doing so, Mr. Kent reinforced his commitment to gender diversity on the Board. Mr. Kent also ensured that the Board has a broad outlook on the Company’s talent pipeline and encouraged ongoing education of the Company’s Directors by facilitating market visits and meetings with management in the field to deepen Directors’ understanding of the business. Mr. Kent continued to represent the Company externally with key stakeholders.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Effective May 1, 2017, when Mr. Kent continued as Chairman of the Board, his base salary was reduced to $1,000,000. Mr. Kent did not receive an annual increase for 2018.

 

Annual Incentive: $1,800,000, comprised of $1,600,000 from applying the Company Performance Factor (80% for 2017) under the plan formula and $200,000 for individual performance (see page 56). The individual performance amount was determined based on the 2017 performance highlights described above.

 

Long-Term Incentive: Mr. Kent received a long-term incentive grant in February 2017 valued at $8,734,498, split into 2/3 performance share units and 1/3 stock options.

 

 

*   In addition to serving as Chairman of the Board, Mr. Kent served as Chief Executive Officer through April 30, 2017.

 

 

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Chief Financial Officer     

 

Kathy N. Waller

Executive Vice President, Chief Financial Officer and President, Enabling Services*

 

 

2017 Performance Highlights:

 

Ms. Waller continued her strong leadership of the Global Finance function in 2017, delivering high standards of excellence in financial reporting and analysis, governance and controls and value creation. Under Ms. Waller’s leadership, the Finance organization continued to create value through strong management of cash and capital, including sound global M&A investments; support of the North America refranchising initiative; and driving efficiency and standardization within the core financial activities. In May 2017, Ms. Waller assumed new responsibilities to include the management of Global Technical, Aviation and Integrated Services. The newly created Integrated Services organization consolidates functional support processes, including Human Resources, Finance, Procurement and other service-related activities for managing the business and for supporting associates around the world. This structure created the opportunity to simplify, standardize and automate work processes. Ms. Waller launched a multi-year initiative to upgrade and refresh core financial and information systems that will generate additional productivity and efficiency. She continued strong people and leadership development across the Company, with a focus on attracting and retaining talented associates and developing women and diverse talent for leadership roles.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Effective May 1, 2017, when Ms. Waller assumed additional responsibilities as President, Enabling Services, her base salary was increased to $850,000. Ms. Waller did not receive an annual increase for 2018.

 

Annual Incentive: $956,250, comprised of $850,000 from applying the Company Performance Factor (80% for 2017) under the plan formula and $106,250 for individual performance (see page 56). The individual performance amount was determined based on the 2017 performance highlights described above.

 

Long-Term Incentive: Ms. Waller received a long-term incentive grant in February 2017 valued at $2,827,806, split into 2/3 performance share units and 1/3 stock options.

 

 

*   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.

 

 

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Other Named Executive Officers     

 

Marcos de Quinto

Former Executive Vice President and Chief Marketing Officer*

 

 

2017 Performance Highlights:

 

Mr. de Quinto was the Chief Marketing Officer until May 1, 2017, when he transitioned into a new strategic consulting role advising the Company’s executive leadership. Mr. de Quinto provided direction to continue to build the Company’s worldwide marketing capabilities and portfolio of brands while improving productivity. He led the completion of the Company’s roll-out plan for the Coca-Cola “one brand” strategy and the “Taste the Feeling” campaign. Mr. de Quinto was instrumental in leading the relaunch of the Fanta brand, which included new positioning, product formulas, packaging, a new campaign and integrated marketing communications work. Mr. de Quinto also continued to lead key initiatives to accelerate the development of talent and differentiating capabilities across the Global Marketing function, as well as initiatives relating to innovative agency management and compensation models.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Mr. de Quinto will be retiring from the Company on August 31, 2018.

 

Annual Incentive: $573,566, determined by applying the Company Performance Factor (80% for 2017) under the plan formula (see page 56).

 

Long-Term Incentive: Mr. de Quinto received a long-term incentive grant in February 2017 valued at $3,097,112, split into 2/3 performance share units and 1/3 stock options.

 

 

*   Mr. de Quinto served as Executive Vice President and Chief Marketing Officer through April 30, 2017, when he transitioned to Senior Creative Advisor.

 

 

 

J. Alexander M. Douglas, Jr.

Executive Vice President and President, Coca-Cola North America

 

 

2017 Performance Highlights:

 

Under Mr. Douglas’ leadership, Coca-Cola North America continued to deliver solid operational and financial results in 2017. The Company completed the transformation of the Company’s franchise bottling system in the U.S. to realign the economic model between the Company and its bottlers to accelerate local investment and growth. As stewards of the Company’s largest refranchising initiative, Mr. Douglas and his team managed the transition of more than 55,000 employees, more than 50 production facilities and 1.3 billion physical cases of volume from Company to independent franchise ownership over the course of four years. Coca-Cola North America also continued to reinvigorate value growth in sparkling soft drinks while expanding its total beverage portfolio with a focus on growing value across an increasingly wide variety of products and packages, including growth of our value-added dairy portfolio and the launch of ready-to-drink coffee, driving significant expansion in the coffee category. Coca-Cola North America gained value share in total nonalcoholic ready-to-drink beverages in 2017.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Mr. Douglas retired from the Company on March 1, 2018.

 

Annual Incentive: $723,445, determined by applying the Company Performance Factor (80% for 2017) under the plan formula (see page 56).

 

Long-Term Incentive: Mr. Douglas received a long-term incentive grant in February 2017 valued at $2,401,982, split into 2/3 performance share units and 1/3 stock options.

 

 

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Irial Finan

Executive Vice President and President, Bottling Investments Group

 

 

2017 Performance Highlights:

 

Mr. Finan’s continued leadership of the Bottling Investments Group (“BIG”) contributed to the Company’s strong performance in 2017. He led the BIG team in accelerating the bottler refranchising strategy with the sale of BIG’s former China bottling operations and the completion of the refranchising of the Company-owned bottling operations in the U.S. He helped shape the future of bottling operations in Japan and Europe by representing the Company on the boards of Coca-Cola East Japan and Coca-Cola European Partners. In southwest Asia, he led the building of a new facility in Bangladesh and returned the India bottler to growth in the latter half of the year. Mr. Finan continued to invest in people development, increasing the ethnic and gender diversity of his senior leadership team.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Mr. Finan will be retiring from the Company on March 31, 2018.

 

Annual Incentive: $1,097,723, determined by applying the Company Performance Factor (80% for 2017) under the plan formula (see page 56).

 

Long-Term Incentive: Mr. Finan received a long-term incentive grant in February 2017 valued at $3,457,427, split into 2/3 performance share units and 1/3 stock options.

 

 

 

Brian J. Smith

Executive Vice President and President, Europe, Middle East and Africa Group

 

 

2017 Performance Highlights:

 

Mr. Smith’s first full year of leading the Europe, Middle East and Africa Group resulted in strong performance across multiple markets. Following the creation of Coca-Cola European Partners and Coca-Cola Beverages Africa, Mr. Smith led the bottlers to reinvest a portion of their scale synergies in enhanced competitive advantages, including increased sales force, new revenue growth management capabilities, more coolers and expanded production capacity. Similarly, Mr. Smith led initiatives to strengthen the Company’s brand portfolio, such as the relaunch of Coke Zero Sugar, product reformulations and portion-control packs to renew sparkling soft drink growth and disciplined expansion across other beverage categories, through differentiated global and regional brands, innovation and higher value business models. Mr. Smith focused on leadership development increasing the ethnic and gender makeup of his operating leadership team. Finally, Mr. Smith progressed on the Company’s sustainability agenda, highlighted by the joint announcement with Coca-Cola European Partners of the Company’s goal to double the amount of recycled plastic used in its bottles in Western Europe to 50%+ by 2020.

 

 

Compensation Decisions:

 

Base Salary: No executive officer received an annual merit increase for 2017. Mr. Smith did not receive an annual increase for 2018.

 

Annual Incentive: $731,250, comprised of $650,000 from applying the Company Performance Factor (80% for 2017) under the plan formula and $81,250 for individual performance (see page 56). The individual performance amount was determined based on the 2017 performance highlights described above.

 

Long-Term Incentive: Mr. Smith received a long-term incentive grant in February 2017 valued at $2,401,982, split into 2/3 performance share units and 1/3 stock options.

 

 

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Elements of Compensation and Link to Strategy

 

We have three elements of total direct compensation: base salary, annual incentives and long-term incentives, which are described below. We also provide limited perquisites (see page 63) and standard retirement and benefit plans (see pages 63 and 98).

2017 Total Direct Compensation*

CEO** 12% 63% Base Salary Long-Term Incentives 25% Annual Incentive Other Named Executive Officers 15% 68% Base Salary Long-Term Incentives 17% Annual Incentive

*

Base salary, actual annual incentive and the grant date fair value of the annual long-term incentive award for 2017.

**

Represents CEO pay for Mr. Quincey, as reported for purposes of the 2017 Summary Compensation Table (see page 65). Mr. Kent is included with the other Named Executive Officers.

Base Salary

Base salary is fixed cash compensation. Salary is reviewed annually and adjusted when appropriate based on market competitiveness. Increases are not automatic or guaranteed.

Base salary is delivered in return for the day-to-day job performed, as well as scope of responsibility, leadership skills and experience and is not intended primarily to reward performance.

Market competitive base salaries help attract and retain executive talent.

Annual and Long-Term Incentives

IMPORTANT FACTS ABOUT OUR INCENTIVE TARGETS
         
  Choice of Incentive Metrics   Rigor of Incentive Metrics  
 

The key financial metrics in our incentive plans for 2017 (net operating revenue, profit before tax, unit case volume and economic profit growth) drive long-term value creation. During the 2017 review of our compensation programs, we further refined the performance metrics for 2018 to align with our new growth strategy, focusing solely on net operating revenue and operating income for the annual incentive plan and net operating revenue, earnings per share and free cash flow for long-term performance-based awards.

We make certain adjustments when calculating results, such as for the impact of foreign currency exchange rates, changes in financial accounting reporting regulations and costs and other financial implications associated with corporate transactions.

Our targets are currency neutral because incentive targets should measure the underlying results of the business, and business leaders should be encouraged to make decisions that drive long-term sustainable growth rather than to address short-term currency fluctuations or items impacting comparability. This philosophy has been in place for several years, and we review this issue regularly, as it is an important concern for global companies like ours with significant exposure to foreign currency exchange rate fluctuations.

 

 

In 2017, we continued to enhance the target-setting process to test the robustness of our already strong incentive targets and performance curve setting.

The setting of our performance payout curves considered the following:

Performance levels necessary to achieve our long-term goals and deliver superior shareowner returns.

The likelihood of achieving various levels of performance based on historical results over a ten-year period.

Metrics, program designs and results at companies in our comparator group.

Performance relative to our comparator companies.

The Compensation Committee continues to have an additional standing meeting each year to devote more time to this important process.

 

 

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Annual Incentive Compensation

Overview

Annual incentives are determined under the Performance Incentive Plan of The Coca-Cola Company (the “Performance Incentive Plan”). In 2017, approximately 14,000 employees participated in the Performance Incentive Plan.

Awards for executive officers are determined based on a formula with predetermined financial measures aligned with the Company’s long-term growth metrics (“Company Performance Factor”), as well as the executive’s individual performance (“Individual Performance Amount”). 

For 2017, the financial measures were profit before tax, net operating revenue and unit case volume.

See 2017 Compensation Decisions for Named Executive Officers beginning on page 50 for details of the 2017 annual incentives paid to the Named Executive Officers.

 

2017 Annual Incentive Formula

  Base Salary X Target Percentage X  Company
Performance
Factor
Individual
Performance
Amount
Annual
Incentive

Amount*
 

*

The annual incentive plan includes a pool funding feature intended to allow the awards to Named Executive Officers to meet the requirements for tax deductibility under Section 162(m) of the Tax Code for 2017. The maximum pool that can be used to pay annual incentives to Named Executive Officers is 0.40% of the Company’s comparable income before income taxes, and there is an additional cap of 0.15% of comparable income before income taxes for the Chief Executive Officer. The Compensation Committee does not expect to award the full amount authorized by this pool funding, and the amounts awarded for 2017 are well below these maximums.

 

 

2017 Named Executive Officer Target Annual Incentive

 

 

Name

 

Base

Salary

(12/31/2017)

 

Target (%)

 

Target

Annual

Incentive ($)

 

 

Mr. Kent

$

1,000,000

 

200%

$

2,000,000

 

 

Mr. Quincey*

$

1,300,000

 

192%

$

2,493,150

 

 

Ms. Waller

$

850,000

 

125%

$

1,062,500

 

 

Mr. de Quinto*

$

784,088

 

91%

$

716,958

 

 

Mr. Douglas

$

723,445

 

125%

$

904,306

 

 

Mr. Finan

$

914,769

 

150%

$

1,372,154

 

 

Mr. Smith

$

650,000

 

125%

$

812,500

 

*

The targets for Mr. Quincey and Mr. de Quinto are prorated based on the time spent in their respective positions though April 30, 2017, and the time spent in their respective positions through December 31, 2017. Mr. Quincey’s target was 175% through April 30, 2017, and 200% thereafter. Mr. de Quinto’s target was 125% through April 30, 2017, and 75% thereafter.

Company Performance Factor

Targets are informed by our long-term growth target ranges and our annual business plan. Targets are designed to be challenging but achievable.

Actual results (rounded to the nearest half percent) are compared to the target, and then the percentage achieved is weighted to determine the final Company Performance Factor.

For 2017, the payout curve is linear from 0% to 200% of the target. The maximum payout is 200% of the target and set to be difficult to achieve. For example, to achieve the maximum payout for net operating revenue growth, the Company would have had to achieve 8% growth in the year.

2017 Targets and Results

Performance Metric*

Target

 

Actual

Performance

 

Result (% of the

Target Achieved)

 

Weighting

 

Weighted

Result

 

Profit Before Tax Growth

7.0

%

8.5%

 

121%

 

50%

 

61%

 

Net Operating Revenue Growth

4.0

%

3.0%

 

75%

 

25%

 

19%

 

Unit Case Volume Growth

1.5

%

0.0%

 

0%

 

25%

 

0%

 

Company Performance Factor

80%

 

*

Profit before tax growth and net operating revenue growth are calculated after adjusting for the impact of currency and certain items impacting comparability. These measures differ from profit before tax and net operating revenue reported under GAAP, primarily due to the impact of currency, asset impairments/restructuring, productivity and reinvestment program, net charges by equity investees, transaction gains/losses and other items. In addition, these measures are calculated after adjusting for the impact of structural items. Structural items generally refer to acquisitions or dispositions of bottling and distribution operations and consolidation or deconsolidation of bottling and distribution entities for accounting purposes. Using these adjusted measures of profit before tax growth and net operating revenue growth is appropriate because it provides a more consistent comparison against the prior year.

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Individual Performance Amounts

For the Named Executive Officers, consideration is given for contributions to overall Company results and business/operating unit goals; contributions toward strategic initiatives, including the areas of People, Planet, Productivity, Partners, Portfolio and Profit; and other priorities, including the individual contributions toward the new operating model and accelerating the Company’s transformation to a high-performing growth business. An Individual Performance Amount may be awarded based on an assessment of an executive’s individual performance throughout the year. The maximum percentage of an individual's target award that could be awarded for individual performance in 2017 was 50%, and no Named Executive Officer received an Individual Performance Amount exceeding 15% of his or her target award in 2017. See 2017 Compensation Decisions for Named Executive Officers beginning on page 50.

Long-Term Incentive Compensation

Overview

The Company grants long-term incentive compensation to reward performance over the longer term and align the interests of employees with shareowners. The majority of these awards are performance-based. In 2017, annual long-term incentive awards were equity-based for Named Executive Officers and other senior executives and leaders, and cash-based for other eligible employees. In 2017, approximately 6,600 employees received long-term incentive compensation during the annual grant in February, of which approximately 650 employees received equity awards.

Annual long-term incentive awards are made in February of each year.

A limited number of other awards may be granted throughout the year in exceptional cases.

See 2017 Compensation Decisions for Named Executive Officers beginning on page 50 for details of the 2017 long-term equity awards granted to Named Executive Officers.

All equity awards are subject to our Equity Stewardship Guidelines implemented in 2014. An update regarding our 2017 progress against these guidelines is included below under Equity Stewardship Guidelines and Scorecard.

Long-Term Incentive Annual Awards: Amounts and Performance Measures

The Compensation Committee sets award ranges for long-term incentive compensation for each job grade at the senior executive levels. In 2017, the ranges were informed by surveys of our comparator group’s and similar companies’ pay practices. The Compensation Committee does not target a specific percentile ranking against our comparator group and may grant long-term incentive awards at the higher end of the range for a variety of factors, including individual performance and potential and to reflect support of the larger Coca-Cola system. In 2017, the actual grant value of long-term incentive compensation awarded within such ranges was individually determined at the discretion of the Compensation Committee. Consideration was given to the individual’s skills, experience and future potential, as well as the individual’s and Company’s performance in the prior year.

Once the value of the long-term incentive award is determined, the Compensation Committee grants a portion of the award in stock options and a portion in PSUs. When determining the number of stock options awarded, a Black-Scholes value is first calculated and a floor and ceiling are applied based on a 30-day average stock price. This stock option “guardrail” increases predictability, helps manage the burn rate commitment and is intended to mitigate against excessively high and low Black-Scholes values. For stock option grants in 2017, the low end of our guardrail was used, which valued options at 20% of the 30-day average stock price. This resulted in fewer stock options being granted than the pure Black-Scholes model would have suggested. PSUs are valued based on a 30-day average stock price for purposes of determining target award values.

Due to the rules for how the grant date fair value of long-term incentive awards must be calculated for accounting purposes, the 2017 Summary Compensation Table may not reflect the same stock option and PSU values described above.

How PSU Targets Were Determined

For 2017, performance measures for the annual PSU awards were growth in economic profit and growth in net operating revenue. Economic profit is net operating profit after tax less the cost of capital used in the business, after adjusting for the impact of structural changes that are significant to the Company as a whole, accounting changes and certain other items impacting comparability.

Performance targets for growth in these metrics were derived from the three-year business plan and then set by the Compensation Committee after a detailed review, which included conducting probability analyses, benchmarking performance and evaluating the practices of comparator companies. Participants receive 35% of the award at the threshold level of achievement, 100% of the award at the target level and 150% of the award at the maximum level, prior to application of the total shareowner return multiplier. With the total shareowner return multiplier, payouts can range from 0% to 187.5%.

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Performance Share Units: Relative Total Shareowner Return Modifier and Status of Programs

Relative Total Shareowner Return Modifier

PSU awards include a total shareowner return modifier to further link awards to shareowner value creation.

The number of shares earned from PSU awards will be reduced or increased if total shareowner return over the three-year performance period relative to our compensation comparator group (see page 61) falls outside of a defined range. Specifically, after the performance results are certified, the award will be modified up or down as follows:

If total shareowner return over the three-year performance period is:

Then:

At or above the 75th percentile of the comparator group

The award will be increased 25%

At or above the 25th and below the 75th percentile of our comparator group

No change to the award

Below the 25th percentile of our comparator group

The award will be decreased 25%

Status of Annual PSU Programs

Performance

Period

Performance Measure

Threshold, Target and

Maximum Performance Levels

Status

2014-20161,3

Compound annual
growth in economic profit

Threshold = 6.9%

Target = 8.9%

Maximum = 10.9%

Results were certified in February 2017.

Economic profit growth was at the maximum level, and the relative total shareowner return modifier was not triggered up or down, as total shareowner return was above the 25th percentile and below the 75th percentile. Final payout was certified at 150%, which was driven by effective management of currency neutral operating results and capital. The shares earned were subject to an additional holding period through February 2018.

2015-20172,3

70% compound annual
growth in economic profit

 

 

30% net operating revenue growth4

Threshold = 4.5%

Target = 7.1%

Maximum = 9.1%

 

Threshold = 1.1%

Target = 4.0%

Maximum = 5.9%

Results were certified in February 2018.

Economic profit growth was at the maximum level, and net operating revenue growth was below the target level for total company performance. The relative total shareowner return modifier was not triggered up or down, as total shareowner return was above the 25th percentile and below the 75th percentile. Final payout was certified at 131% for total company performance, which was primarily driven by effective management of currency neutral operating profit results and capital. The shares earned are subject to an additional holding period through February 2019.

2016-20182,3

70% compound annual
growth in economic profit

 

 

30% compound annual
growth in net operating revenue4

Threshold = 3.9%

Target = 7.9%

Maximum = 11.9%

 

Threshold = 3.0%

Target = 5.0%

Maximum = 7.0%

Through December 31, 2017, payout is projected near the target level. Company performance over the remaining year of the performance period will determine the number of shares earned, if any.

Results will be certified in February 2019, including applying the relative total shareowner return modifier, and any shares earned will be subject to an additional holding period through February 2020.

2017-20192,3

70% compound annual
growth in economic profit

 

 

30% compound annual
growth in net operating revenue4

Threshold = 5.0%

Target = 8.4%

Maximum = 11.8%

 

Threshold = 2.0%

Target = 4.0%

Maximum = 6.0%

Through December 31, 2017, payout is projected near the target level. Company performance over the remaining years of the performance period will determine the number of shares earned, if any.

Results will be certified in February 2020, including applying the relative total shareowner return modifier, and any shares earned will be subject to an additional holding period through February 2021.

1

Participants receive 50% of the award at the threshold level, 100% of the award at the target level and 150% of the award at the maximum level. Results are rounded and the number of shares is extrapolated on a linear basis between performance levels.

2

Participants receive 35% of the award at the threshold level, 100% of the award at the target level and 150% of the award at the maximum level. Results are rounded and the number of shares is extrapolated on a linear basis between performance levels.

3

The calculation of economic profit growth for the 2014-2016 and 2015-2017 periods was adjusted, and the 2016-2018 and 2017-2019 periods will be adjusted, to exclude items impacting comparability and to exclude structural items that are significant to the Company as a whole including the refranchising of bottling territories in North America. For all of these periods, economic profit growth is calculated on a currency neutral basis.

4

The 2015-2017 PSU program provides for net operating revenue growth to be based on three one-year comparable currency neutral net operating revenue growth targets tied to total Company or group/business unit results, as applicable. The net operating revenue growth target for the 2015-2017 PSU program included in the table above is the one-year 2017 total Company target. The 2016-2018 and 2017-2019 PSU programs provide for comparable currency neutral net operating revenue growth to be based on a three-year compound annual growth target tied to total Company results. This measure differs from net operating revenue growth reported under GAAP, primarily due to the impact of currency and items impacting comparability. In addition, the calculation of comparable currency neutral net operating revenue growth for the 2015, 2016 and 2017 periods was adjusted, and the 2016-2018 and 2017-2019 periods will be adjusted, to exclude structural items that are significant to the Company as a whole including the refranchising of bottling territories in North America.

 

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Other Long-Term Incentive Awards

The vast majority of equity awards are made as part of the annual long-term incentive grants in February of each year. During the year, a limited number of additional equity awards may be granted, either as time-based restricted stock units or performance-based awards.

For 2017, time-based restricted stock units were typically used for critical retention situations, make-whole awards for newly hired employees who forfeited equity awards at a prior employer, awards when employees return to the Company from bottlers, special recognition, promotions or when other forms of awards are not available for legal or tax reasons.