8-KLeadership ChangesExhibits & Filings

COCA COLA CO 8-K Report, Executive Changes (Feb 17, 2011)

Filed February 17, 2011For Securities:KO

Summary

This 8-K filing from The Coca-Cola Company announces a significant change in its Board of Directors with the appointment of Evan G. Greenberg as a new director, effective February 17, 2011. Mr. Greenberg, who also serves as President, CEO, and Director of ACE Limited, has been appointed to the Audit Committee. His compensation for his role on the board is detailed, including annual compensation of $175,000, with a portion payable in cash or deferred share units and the remainder in deferred share units. The filing also addresses related person transactions, specifically the ongoing insurance business between The Coca-Cola Company and ACE Limited, a company of which Mr. Greenberg is CEO. ACE has provided various insurance products and services to Coca-Cola since 1986, including Directors' and Officers' liability, fiduciary liability, and property insurance. The amounts paid to ACE in 2010 for these services are disclosed, and management considers the terms to be fair and reasonable.

Key Highlights

  • 1Evan G. Greenberg elected as a new Director to The Coca-Cola Company's Board.
  • 2Mr. Greenberg appointed to the Audit Committee.
  • 3Annual compensation for Mr. Greenberg as a director will be $175,000.
  • 4A portion of Mr. Greenberg's compensation can be received in cash or deferred share units, with the remainder in deferred share units.
  • 5Disclosure of ongoing insurance business between The Coca-Cola Company and ACE Limited, led by Mr. Greenberg.
  • 6Approximately $3.0 million paid to ACE for insurance premiums and $937,000 in fronting fees in 2010.
  • 7Management affirms that terms of insurance arrangements with ACE are fair and reasonable.

Frequently Asked Questions

Evan G. Greenberg has been elected as a new Director to The Coca-Cola Company's Board of Directors. He is also the President, Chief Executive Officer, and a Director of ACE Limited. His appointment fills an existing vacancy, and he has been appointed to the Audit Committee, indicating his expertise is valued in financial oversight.

Mr. Greenberg is entitled to annual compensation of $175,000 for his role as a director in 2011. Up to $50,000 of this can be paid in quarterly installments, either in cash or deferred share units at his discretion. The remaining $125,000 will be paid in deferred share units.

The filing addresses this by disclosing the long-standing business relationship between The Coca-Cola Company and ACE Limited, where Mr. Greenberg is CEO. ACE has provided insurance products and services to Coca-Cola since 1986. The company paid ACE approximately $3.0 million for insurance premiums and $937,000 in fronting fees in 2010. Management has stated that the terms of these arrangements are fair and reasonable and comparable to what could be obtained from unrelated third parties, mitigating concerns about potential conflicts.

The CCE Acquisition refers to The Coca-Cola Company's completion of the acquisition of the North American operations of Coca-Cola Enterprises Inc. (CCE) on October 2, 2010. This event impacted the disclosure of related person transactions, as the acquired entity, renamed Coca-Cola Refreshments USA, Inc. (CCR), became subject to The Coca-Cola Company's insurance policies after the acquisition date.