Menu
Log in

Coca-Cola will link executive pay to company employees

12 Mar 2020 7:37 AM | Bill Brewer (Administrator)

PensionsMarch 11, 2020

NY State Pension, Coca-Cola Reach Executive Pay Deal

Beverage giant promises to bring CEO, employee compensation more in alignment.

The $225.9 billion New York State Common Retirement Fund has struck a deal with Coca-Cola in which the company has agreed to consider the wages it pays all its employees when deciding executive salaries to help bring them into closer alignment.

The fund had filed a shareholder resolution calling for such a move, but has now withdrawn it as the agreement satisfies the intent of the proposal.

“Pay for CEOs and other corporate executives has dramatically outpaced wages for most other employees in recent years,” State Comptroller Thomas DiNapoli, trustee of the fund, said in a statement.

“We are encouraging companies to adopt executive compensation policies that take their entire workforce into consideration,” he said, adding that “I commend Coca-Cola for taking this step to help ensure that pay for its top executives is in line with the company’s overall compensation philosophy and long-term performance, not simply on what executives at other companies are making.”

Coca-Cola said it is revamping its compensation committee into what it now calls its “Human Capital Management & Compensation Committee” to reflect a broader scope that the committee now oversees. The company also agreed to add new language to its proxy statement regarding CEO and named executive officer (NEO) pay.

“The compensation approach used to set CEO and NEO pay is the same approach used in determining compensation for the broader workforce, including pay competitiveness and the use of performance-based metrics that reward exceptional financial performance,” the company stated in a draft of the proxy statement. “The committee also can consider other factors which it regularly reviews, including shareowner and employee feedback; the advisory vote on compensation; the CEO pay ratio; global pay fairness; progress against diversity metrics; and others.”

The proxy statement draft also states that pay for the company’s executives is “at-risk and performance-based” with a metrics performance aligned to the company’s growth strategy. It said the company’s performance is assessed in multiple ways, such as operating performance, including results against long-term growth targets, and return to shareowners over time, both on an absolute basis and relative to other companies.

It also said that environmental and social goals “are critical to our business,” and that executives will be motivated to deliver results that align with company’s values and shareowner interests.

The comptroller’s office has complained that CEO pay at the largest US companies has risen dramatically over the past 50 years, while average wages have “made only meager gains” when adjusted for inflation. It said the pay ratio between CEOs and the typical worker has increased by as much as 1,400% in some cases and argues that this disparity can damage company morale, productivity, and reputation.

DiNapoli said he believes the companies the fund invests in should align executive pay practices with their compensation practices for other employees and provide supplemental information that informs investors.

***** ***** ***** ***** *****

Source: Chief Investment Officer

https://www.ai-cio.com/news/ny-state-pension-coca-cola-reach-executive-pay-deal/

Member Login (click below)

© 2024 OCCABA

OCCABA
PO Box 9644
700 E Birch St
Brea, CA 92822

Powered by Wild Apricot Membership Software