Executive compensation has always been a highly controversial topic. Shareholders of public companies have often been critical of pay packages that appear to have little connection to underlying business performance while politicians and activists have criticized high executive pay in the
The Coca Cola Company is in the midst of a major controversy prompted by shareholder objections to the company’s equity compensation plan which is outlined in the company’s 2014 proxy statement. Read this article for our view of the controversy.
Most companies on a calendar fiscal year have released proxy statements over the past month. In addition to annual reports, intelligent investors must pay close attention to proxy statements to determine the company’s philosophy on executive compensation. Nearly every compensation committee includes what seems like boilerplate statements regarding aligning the incentives of management and shareholders. However, as we have seen on many occasions, such as the example provided by Kraft’s absurd compensation policies, shareholders must be vigilant when it comes to matching rhetoric with reality. Read this article for more details.