Coca-Cola under fire from Wintergreen Advisers over executive pay

INVESTORS have slammed Coca-Cola for the whopping amount they pay executives, saying no one requires such “astronomical sums” for motivation.

Coca-Cola is under fire from one investment fund for providing a “raw deal” for sharehold

AN INVESTMENT fund is taking issue with Coca-Cola's pay proposal for management, saying it represents a “raw deal” for shareholders in light of the beverage maker's slowing growth.

In a letter to Coca-Cola board members, Wintergreen Advisers chief executive David Winters noted that Coca-Cola's equity plan would transfer about $US13 billion ($A14.27 billion) to management over the next four years. His calculation was based on the current stock price and the company's proposal to issue a split-adjusted 340 million shares to its employees.

“No matter how well a management team performs, it is unfathomable that they would require such astronomical sums of money to provide motivation,” Winters wrote.

Investor David Winters wrote a letter saying management teams at Coke shouldn’t require such ‘astronomical sums’ for motivation.

He sent a similar letter to billionaire investor Warren Buffett, urging the longtime Coca-Cola shareholder to vote against the plan at the company's annual meeting on April 23.

Coca-Cola said the comments by Winters were “misinformed”.

The Atlanta-based company noted the plan was consistent with its past practices and that management would have to meet performance targets to earn the full amount outlined.

It also noted that the plan covers about 6400 employees. It's not clear how much would be allotted to top executives, but last year, chief executive Muhtar Kent was given a pay package worth $18.2 million, according to an Associated Press calculation. Kent's pay was down 16 per cent from the previous year because Coca-Cola failed to meet its own growth targets.

By comparison, PepsiCo chief executive Indra Nooyi was given a pay package worth $13.2 million. The Associated Press formula for executive compensation does not count changes in the present value of pension benefits, which makes its total slightly different in most cases from the total companies report to the Securities and Exchange Commission.