Dive Brief:
- Wintergreen Advisers, which has a 0.1% stake in the company, has released a report that expresses concerns about various aspects of Coca-Cola Co.'s operations per Coca-Cola's 2015 proxy statement.
- Wintergreen believes that Coca-Cola excessively rewards CEO Muhtar Kent and other executives and board members who may have financial ties and overlapping business interests and may not be looking out for the best interests of the company's shareholders.
- Wintergreen also did not look kindly upon Coca-Cola lowering its performance hurdles for 2015 after management did not meet those hurdles in 2014. By lowering the hurdles, the company makes annual bonuses easier for management to earn.
Dive Insight:
Another key point in Wintergreen's report is that Coca-Cola is not taking its restructuring initiatives as seriously as it could be. In October, the beverage giant announced a $3 billion cost-cutting plan in answer to falling soda sales, and in January, as part of that plan, the company announced it may cut up to 1,800 jobs. But is that enough? In its report, Wintergreen specifically mentions Heinz as a model for restructuring as well as what 3G has planned for Kraft following Kraft's merger with Heinz.
Wintergreen COO Liz Cohernour, said in a statement: “Wintergreen plans to vote against Coca-Cola’s directors because we believe they have not exhibited the leadership and independence needed to restore shareholder confidence and return the company to profitable growth. We urge Coca-Cola shareholders to carefully consider these issues.”
Wintergreen's comments may matter less than that of a larger shareholder like Warren Buffett, as Food Dive noted previously.