8-KMaterial AgreementsExhibits & Filings

COCA COLA CO 8-K Report, Material Agreement (Feb 17, 2006)

Filed February 17, 2006For Securities:KO

Summary

This 8-K filing from The Coca-Cola Company, dated February 16, 2006, details actions taken by the Compensation Committee regarding executive compensation and incentive plans. The primary focus is on compensation adjustments and awards for Chairman and CEO E. Neville Isdell. These actions signal a focus on aligning executive incentives with company performance, particularly in areas of net income, volume, and earnings per share growth. For investors, the key takeaway is the granting of significant stock options and performance share units to the CEO, demonstrating a commitment to retaining and motivating key leadership. The performance metrics outlined for these awards (net income, volume, and EPS growth) are critical indicators of the company's financial health and operational success. Investors should monitor how these performance targets are met in the coming years as an indicator of leadership effectiveness and potential shareholder value creation.

Key Highlights

  • 1The Compensation Committee approved participants, targets, and measures for annual incentives for the 2007 payout based on 2006 performance, focusing on net income and volume.
  • 2E. Neville Isdell, Chairman and CEO, was granted options to acquire 900,000 shares of Company Common Stock at an exercise price of $41.39.
  • 3The CEO's stock options have a ten-year term and vest over four years, with specific provisions for retirement.
  • 4Mr. Isdell also received a Performance Share Unit Award for the 2006-2008 performance period.
  • 5The performance measure for the CEO's Performance Share Unit Award is compound annual growth in earnings per share (EPS).
  • 6The target award for the CEO's Performance Share Units is 160,000, with a threshold of 96,000 and a maximum of 240,000 units.
  • 7The filing incorporates by reference the form of the Performance Share Unit Award Agreement for E. Neville Isdell as an exhibit.

Frequently Asked Questions

For those with corporate responsibilities, the annual incentive performance measures are net income and volume. For those with operating unit responsibilities, the measures include profit before taxes, net income, and volume.

CEO E. Neville Isdell was granted options to acquire 900,000 shares of Company Common Stock at an exercise price of $41.39 per share. The total potential value would depend on the stock price at vesting and exercise.

The Performance Share Units awarded to CEO E. Neville Isdell are tied to the compound annual growth in earnings per share (EPS) over the 2006-2008 performance period. The target award is 160,000 units, with a range from 96,000 to 240,000 units based on performance.

Yes, both the stock options and the Performance Share Unit Award have specific provisions related to Mr. Isdell's retirement, detailing vesting and exercise terms in such an event.