“(We are) focused on fostering a high-performance culture and continuing to align pay and performance against the key strategic drivers of long-term growth.”

As we have discussed in the last several proxy statements, the Compensation Committee has engaged in a multi-year process of evaluating the Company’s compensation programs and objectives. The results of this evaluation have included redesigning the annual and long-term incentive programs and adopting Equity Stewardship Guidelines. In 2016, we did not make material changes to the design of the compensation programs, but have taken important steps that we want to share with you. We also want you to know what is top of mind for this Committee now and going forward.

Aligning compensation and strategy: Our Company is undergoing an important evolution to refocus on our core business model of building strong global brands and leading a dedicated franchise bottling system. The Company is taking clear strategic actions to drive long-term growth for the future. This transformation will cause the Company to look different, both financially and in terms of the number of employees, as territories are refranchised to independent bottlers around the world. As the Company’s strategy evolves, so must our compensation programs. This Committee will be focused on fostering a high-performance culture and continuing to align pay and performance against the key strategic drivers of long-term growth.

Target setting: As we highlighted last year, the Compensation Committee enhanced the process by which we set performance goals and test the rigor of incentive targets and performance curves. We devoted an additional in-person meeting in 2016 to this topic, which will become an additional standing meeting each year. 

Role of non-financial results in pay programs: We believe an important component of driving long-term value creation is considering the broad range of our Company’s stakeholders, including our shareowners. While we believe the majority of incentive pay should be based on financial metrics tied to our long-term business strategy, progress toward non-financial goals that are critical to our business, including our sustainability focus areas, also adds value for our shareowners and other stakeholders. We have started to take these areas into account in a more structured way in 2016 as part of the annual incentive program and will continue to work on this concept in the coming years.

You will see in the Compensation Discussion & Analysis of our Proxy Statement the details of our compensation programs, including the specific decisions we made for the 2016 Named Executive Officers and the rationale for them. We remain committed to listen to your feedback as we continue to refine and evaluate the Company’s compensations programs.

Ms. Lagomasino, Dr. Gayle and Ms. Herman are members of the Compensation Committee of The Coca-Cola Company’s Board of Directors, chaired by Ms. Lagomasino. Lagomasino is the Chief Executive Officer and Managing Partner of WE Family Offices. Gayle is the Chief Executive Officer of McKinsey Social Initiative and a former President and CEO of CARE USA. Herman is Chair and Chief Executive Officer of New Ventures LLC and a former U.S. Secretary of Labor.