8-KMaterial AgreementsExhibits & Filings

COCA COLA CO 8-K Report, Material Agreement (Feb 23, 2005)

Filed February 23, 2005For Securities:KO

Summary

This 8-K filing from The Coca-Cola Company, filed on February 23, 2005, details decisions made by the Compensation Committee of the Board of Directors on February 17, 2005. The primary focus for investors relates to executive compensation and incentive programs. Key actions included the approval of performance metrics for annual incentives for 2006 and the granting of significant stock options and performance share units to CEO E. Neville Isdell. These compensation actions are important as they align executive rewards with company performance. The use of net income, gross profit, and volume for annual incentives, and compound annual growth in earnings per share for performance units, indicates a focus on profitability and growth. The stock option grant provides Mr. Isdell with a direct stake in the company's stock performance, with vesting over four years and specific provisions for retirement. Additionally, housing allowances were approved for EVP Mary E. Minnick as part of her international assignment, reflecting the costs associated with relocating key personnel.

Key Highlights

  • 1Compensation Committee approved participants, targets, and measures for 2006 annual incentives, focusing on net income, gross profit, and volume.
  • 2CEO E. Neville Isdell was granted 620,690 stock options with an exercise price of $43.08, vesting over four years.
  • 3Mr. Isdell also received a Performance Share Unit Award for the 2005-2007 performance period, tied to compound annual growth in earnings per share.
  • 4Target award for Mr. Isdell's performance units is 139,740, with a maximum of 209,610 units.
  • 5Specific vesting and exercise provisions are included for Mr. Isdell's grants in the event of retirement.
  • 6Housing allowances were approved for EVP Mary E. Minnick for her international assignment.

Frequently Asked Questions

For the 2006 annual incentives (based on 2005 performance), the key metrics approved are net income, gross profit, and volume for those with corporate responsibilities. For those with operating unit responsibilities, the metrics include profit before taxes, net income, gross profit, and volume.

The filing states that CEO E. Neville Isdell was granted 620,690 stock options at an exercise price of $43.08 per share. The total potential value would depend on the future stock price at the time of exercise. However, the intrinsic value at grant date, based on the exercise price, is not directly provided but the grant size indicates a significant incentive.

The CEO, E. Neville Isdell, received a Performance Share Unit Award for the 2005-2007 performance period. The performance measure for this award is the compound annual growth in earnings per share (EPS), with a target award of 139,740 Performance Share Units and a maximum award of 209,610 units.

Yes, the stock option grant and the Performance Share Unit Award for Mr. Isdell include specific provisions for vesting and exercise in the event of his retirement, offering some flexibility and security.