8-KLeadership ChangesExhibits & Filings

COCA COLA CO 8-K Report, Executive Changes (Jul 21, 2008)

Filed July 21, 2008For Securities:KO

Summary

This 8-K filing from Coca-Cola Co. (KO) details the new compensation package awarded to Muhtar Kent upon his appointment as President and Chief Executive Officer, effective July 1, 2008. The compensation committee has structured his pay to be competitive and aligned with shareholder interests, reflecting his expanded responsibilities. Key components include a base salary increase, performance-based incentives, and significant stock option grants designed to incentivize long-term performance and value creation. Investors should note the substantial stock option grants, both standard and premium-priced, which vest over four years. The filing also highlights an increase in Mr. Kent's share ownership target, requiring him to hold a significant portion of his stock. This move signals a strong commitment from leadership towards aligning executive incentives with the long-term success of the company and its shareholders, particularly during this transitional period for the CEO role.

Key Highlights

  • 1Muhtar Kent, newly appointed CEO and President, received a revised compensation package.
  • 2Annual base salary increased by 20% to $1,200,000.
  • 3Annual incentive target set at 200% of base salary under the Performance Incentive Plan.
  • 4Awarded 632,911 standard stock options with an exercise price of $50.53, vesting over four years.
  • 5Received a special, one-time, premium-priced option for 289,352 shares at an exercise price of $58.1095, vesting on the fourth anniversary.
  • 6Mr. Kent's share ownership target increased to eight times his salary ($9,600,000), with a two-year window to achieve it.
  • 7E. Neville Isdell will continue as Chairman until April 2009, with his compensation unchanged.

Frequently Asked Questions

Muhtar Kent's compensation now includes a base salary of $1,200,000 (a 20% increase), an annual incentive target of 200% of his base salary, a grant of 632,911 standard stock options, and a special grant of 289,352 premium-priced stock options. His share ownership target has also been significantly increased.

Mr. Kent received two types of stock options. The first is a standard option grant of 632,911 shares vesting over four years. The second is a special premium-priced option for 289,352 shares, also vesting on the fourth anniversary. Both grants require him to retain shares acquired upon exercise (except for taxes and exercise costs) until separation from the company, aligning his interests with long-term shareholder value.

The increase in Mr. Kent's share ownership target to $9.6 million (eight times his salary) signifies the company's commitment to ensuring its CEO has a substantial personal stake in the company's performance. This provides a strong incentive for him to focus on long-term value creation and demonstrates confidence in his leadership.

No, E. Neville Isdell's compensation arrangements remain unchanged. He will continue to serve as Chairman of the Board of Directors and an employee until the company's Annual Meeting of Shareowners in April 2009.