New York State Common Retirement Fund, New York, has withdrawn its shareholder proposal requesting Coca-Cola Co.'s compensation committee take all employees' pay into consideration when setting executive salaries, after reaching an agreement with the Atlanta-based beverage company.
In a news release Friday, Thomas P. DiNapoli, trustee of the $225.9 billion pension fund, announced Coca-Cola will undertake the actions outlined in the proposal.
The pension fund's proposal asked Coca-Cola's compensation committee to take "into consideration the pay grades and/or salary ranges of all classifications of company employees when setting target amounts for CEO compensation."
In a Jan. 23 letter provided by Mr. DiNapoli, Mark Preisinger, director of corporate governance at Coca-Cola, said the company, in exchange for the withdrawal of the proposal, will add a new core principle in its proxy statement it called "alignment of approach across the workforce."
In the letter, Mr. Preisinger says Coca-Cola's compensation committee understands "that CEO pay should be perceived as reasonable relative to our overall employee pay."
"In its discretion, in determining (executive) pay, the committee also can consider other factors which it regularly reviews, including shareowner and employee feedback; the advisory vote on compensation; the CEO pay ratio; global pay fairness; progress against diversity metrics; and others," Mr. Preisinger writes.
"Pay for CEOs and other corporate executives has dramatically outpaced wages for most other employees in recent years," Mr. DiNapoli said. "We are encouraging companies to adopt executive compensation policies that take their entire workforce into consideration. 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."
Matthew Sweeney, spokesman for Mr. DiNapoli, could not be immediately reached for further information.
