Proxy Blog

The Coca-Cola Company 

March 25, 2020

The annual proxy for this nonalcoholic beverage company had the following proposals: 

  1. Proforma votes on directors, the appointment of auditors, and executive compensation 
  2. Shareholder proposal on report regarding sugar and public health 

Magni voted as follows: 

  1. For and against proforma proposals.
    -For directors – The board has a majority of independent directors and some have CEO/CFO experience with other companies. The compensation of directors is disclosed with a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation. 
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against “say-on-pay” advisory vote – A relatively complete disclosure is marred by a lack of benchmarking of the company against its peer group. 
  2. Against shareholder proposal. The topic of sugar is significant as in the US, and increasingly around the globe, there is a rapid increase in obesity and diabetes. Sugar-based drinks are part of the problem. That said, Magni voted against the proposal for two reasons: (1) the proposal is rambling and appears to try to tarnish Coca-Cola with a broad range of allegations, often unrelated to the proposal; and (2) the proposal covers the same ground that a group called ATNF produces. ATNF is funded by independent entities, such as the Bill & Melinda Gates Foundation, the Dutch Ministry of Foreign Affairs, and the Robert Wood Johnson Foundation. Last year we noted that a more focused proposal with recommendations on reasonable changes would warrant a favorable vote. This is the same proposal. Should it be offered next year, Magni will vote against, once again. Next time, an explanation will not be required.