Coca-Cola Mollifies N.Y. Over CEO Pay

March 13, 2020
Coca-Cola will take its entire wage structure into account when setting executive salaries after pressure from New York State.

Coca-Cola will take its entire wage structure into account when setting executive salaries, the company said, after pressure from the New York State Common Retirement Fund, a major shareholder.

The N.Y. pension fund announced that it has struck an agreement with Coca-Cola’s board of directors to “consider the wages it pays all of its employees when setting executive salaries.” In exchange, the fund has withdrawn a shareholder resolution it filed requiring the board’s compensation committee to do so.

The agreement does not obligate Coca-Cola to set executive pay at any specific ratio to overall pay, nor does it set a specific target. In a letter to officials of the New York pension fund, Coca-Cola committed to add verbiage to its proxy statement that includes: “The [compensation] Committee also understands that CEO pay should be perceived as reasonable relative to our overall employee pay.”

“I commend Coca-Cola for taking this step to help ensure that pay for its top executives is in line with the company’s overall compensation philosophy and long term performance, not simply on what executives at other companies are making,” New York state comptroller Thomas DiNapoli said in a statement.

Coca-Cola CEO James Quincey made $18.7 million last year. The average annual pay at Coca-Cola is about $79,000, according to payscale.com.

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