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Institutional Shareholder Services, which
advises pension funds, mutual funds and other money managers,
has recommended investors cast advisory votes against the pay of
the Atlanta beverage company's top leaders, including chairman
and chief executive Muhtar Kent, who earned $25.2 million in
2014.
Another proxy adviser, Glass Lewis & Co, is recommending
investors support the pay, but said in a report it is concerned
that bonus limits at the company are too high.
The tough reviews from the advisers come despite changes Coke
made to its equity plan last fall, adopting new guidelines that
would be less heavily weighted toward stock options. The company
said it revamped its plan based on shareholder feedback.
While it called those changes positive, ISS said in a recent
report that "it remains to be seen whether they will lead to
concrete performance improvement."
Meanwhile, two large pension fund overseers, the California
State Teachers' Retirement System and the Canada Pension Plan
Investment Board, which each hold less than 1 percent of Coke
shares, have already voted against the pay detailed in Coke's
proxy released in March, according to disclosures on their
websites.
While the result of the shareholder vote on pay will not be
binding on Coke, weak support would likely lead to more
criticism after the company faced an investor revolt over its
executive pay last year.
At the time one of its largest investors, Warren Buffett,
abstained from voting for the company's 2014 equity plan and
called it excessive.
Spokespeople for CalSTRS and Canada Pension declined to comment
on their latest votes. In October, a CalSTRS spokesman had
called Coke's new equity guidelines a positive move.
Coke said while it respects CalSTRS' vote, "we are seeing
support from a number of investors on executive compensation
through ongoing shareowner engagement," the company said in a
statement on Tuesday. "Our executive compensation is tied to the
performance of the company and linked to the long-term interests
of shareowners.”
Michael McCauley, governance officer for the Florida State Board
of Administration, which has Coke shares, said it supported
Coke’s executive pay in this year’s advisory vote because of the
changes the company made last fall.
(Reporting by Anjali Athavaley in New York and Ross Kerber in
Boston; editing by Andrew Hay)
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