The Coca-Cola Co. plans to give its chief executive a mega bonus if certain profit goals are met.
CEO Neville Isdell stands to receive a maximum performance award valued at close to $9 million based on how big the company’s earnings per share grow through 2007. His current annual salary is $1.5 million, according to news reports.
The award was approved at a board meeting on Feb. 17 and outlined in a recent Securities and Exchange Commission filing.
The filing also confirmed that the company will increase its marketing spend by $400 million.
The company said last fall that it has planned for an additional $350 million to $400 million on marketing this year. The major push includes a shift away from local, promotional ads to big-media plays that could reach consumers across an entire country or continent. The company said the strategy would not only create efficiencies by leveraging ads developed in one part of the world and using them in other markets but also ensure consistency of message and brand.
Last month, Donald Knauss, the head of Coke’s North America unit, said in a conference call that the company plans to accelerate its marketing this year with a “major reemphasis” on the diet portfolio, including Diet Coke, to capitalize on health and wellness concerns. The plan calls for doubling spending in North America on those products.
In February, Coca-Cola reported only modest growth in revenue and unit case volume for the full year, prompting Isdell to say the company was not content with the results. In the filing, the company said that it plans to maintain the higher marketing spend for the foreseeable future.
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