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EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid in 1997 and the two prior fiscal years to the Company's Chief Executive Officer and the Company's four other most highly compensated executive officers. Mr. Goizueta's compensation is also discussed, since he served as Chief Executive Officer until his death in October 1997.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
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SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING ALL OTHER
----------------------------- STOCK OPTIONS/SAR LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS/4/ AWARDS/5/ AWARDS(#) PAYOUTS/8/ SATION/10/
- --------------------------- ---- ---------- ---------- ---------- ----------- ---------- ------------
Roberto C. Goizueta 1997 $1,551,667/3/ $2,500,000 $ 0 0 $3,408,867/9/ $204,616
Chairman of the Board 1996 1,713,333/3/ 3,500,000 0 0 1,848,054 187,640
and Chief Executive 1995 1,680,000/3/ 3,200,000 0 2,000,000/7/ 1,463,616 176,446
Officer until October
18, 1997/1/
M. Douglas Ivester 1997 856,250 2,000,000 8,840,625/6/ 0 1,072,855 102,857
Chairman of the Board 1996 725,000 1,200,000 7,387,500/6/ 0 797,877 85,530
and Chief Executive 1995 646,250 1,000,000 0 500,000/7/ 574,560 67,287
Officer/1/
Jack L. Stahl 1997 452,250 315,000 0 87,000 659,547 61,663
Senior Vice President 1996 422,000 300,000 0 90,000 659,547 54,356
1995 401,583 290,000 0 120,000/7/ 522,288 49,302
Sergio S. Zyman 1997 412,500 305,000 0 80,000 533,020 54,584
Senior Vice President 1996 390,000 300,000 985,000/6/ 85,000 440,568 47,740
1995 370,000 270,000 1,435,000/6/ 100,000/7/ 338,976 43,087
E. Neville Isdell 1997 405,000 305,000 0 80,000 659,547 32,091
Senior Vice 1996 387,500 270,000 0 85,000 440,568 29,804
President/2/ 1995 372,625 267,000 1,076,250/6/ 80,000/7/ 348,864 28,075
Douglas N. Daft 1997 385,000 315,000 0 87,000 440,568 31,941
Senior Vice President 1996 364,583 285,000 0 95,000 440,568 23,070
1995 348,042 230,000 1,076,250/6/ 5
/1/ Mr. Ivester was elected Chairman of the Board and Chief Executive Officer of the Company on October 23, 1997, following the death of Mr. Goizueta on October 18, 1997, and such events are reflected in the compensation amounts disclosed for 1997. Prior to that time, Mr. Ivester served as President and Chief Operating Officer of the Company.
/2/ Mr. Isdell resigned as Senior Vice President and President of the Greater Europe Group of the Company in February 1998.
/3/ Includes $135,000 in deferred compensation. The Company credited $15,000 monthly to a deferred account for Mr. Goizueta on the Company's books through September 1997.
/4/ Under the Executive Performance Incentive Plan approved by the share owners of the Company in 1994, cash awards are made to participants based upon the individual's contributions to the improvement of operating results, growth, profitability and efficient operation of the Company. Awards are paid to participants annually during the year following the Executive Performance Incentive Plan year after certification of performance goals. In the event of a change in control, participants earn the right to receive awards equal to the target percentage of their annual salaries as if their performance goals had been met, prorated to reflect the number of months a participant was employed in the plan year. Under this plan, awards for 1997 were made as follows: an award prorated to the time of Mr. Goizueta's death of $2,500,000, $1,365,000 to Mr. Ivester, $315,000 to Mr. Stahl, $305,000 to Mr. Zyman, $305,000 to Mr. Isdell and $283,000 to Mr. Daft. In consideration of the contributions of certain executive officers, the Compensation Committee also granted discretionary awards for 1997 as follows: $635,000 to Mr. Ivester and $32,000 to Mr. Daft.
/5/ Share owners should be aware that the Company's restriction periods are significantly longer than those customarily found in restricted stock award plans. For example, restrictions on one named executive officer's first award under the 1983 Restricted Stock Award Plan will not lapse, assuming he does not die or become disabled and that no change in control occurs, for a minimum of 22 years and a maximum of 32 years from the date of grant. Under the 1983 Restricted Stock Award Plan, restrictions on awards granted prior to 1991 lapse when the recipient retires, becomes disabled or dies, or upon a change in control. Currently, restrictions on awards granted in and after 1991 pursuant to the 1983 Restricted Stock Award Plan and awards granted pursuant to the 1989 Restricted Stock Award Plan lapse when the recipient retires at or after age 62 on a date which is at least five years from the award date, becomes disabled or dies, or upon a change in control. The shares awarded under these plans have been adjusted, as necessary, to reflect the 2-for-1 stock splits that occurred on May 1, 1996, May 1, 1992 and May 1, 1990, and the 3-for-1 stock split that occurred on June 16, 1986. Under these plans, Mr. Ivester was originally awarded 439,000 shares, which, adjusted for such stock splits, at the end of 1997 aggregated 1,700,000 shares (value at year end equaled $113,368,750, which is 493% of the value at grant dates); Mr. Stahl was originally awarded 72,000 shares, which, adjusted for such stock splits, at the end of 1997 aggregated 366,000 shares (value at year end equaled $24,407,625, which is 585% of the value at grant dates); Mr. Zyman was originally awarded 85,000 shares, which, adjusted for such stock splits, at the end of 1997 aggregated 150,000 shares (value at year end equaled $10,003,125, which is 223% of the value at grant dates); Mr. Isdell was originally awarded 70,000 shares, which, adjusted for such stock splits, at the end of 1997 aggregated 305,000 shares (value at year end equaled $20,339,688, which is 520% of the value at grant dates); and Mr. Daft was originally awarded 55,000 shares, which, adjusted for such stock splits, at the end of 1997 aggregated 160,000 shares (value at year end equaled $10,670,000, which is 277% of the value at grant dates). The restricted stock was awarded pursuant to the 1983 Restricted Stock Award Plan and the 1989 Restricted Stock Award Plan. Dividends on all stock awards are paid at the same rate as paid to all share owners. The 1983 Restricted Stock Award Plan provides for the Company to make cash payments to recipients of awards made under these plans in amounts equal to the recipients' income tax liability on these awards when the restrictions lapse. Receipt of these cash payments also causes recipients to incur income tax liability, but no cash payments are made to the recipients to offset this liability. No cash payments for reimbursement of any income tax liability are provided under the 1989 Restricted Stock Award Plan.
/6/ These restricted stock awards were made pursuant to the 1989 Restricted Stock Award Plan. Thus, as was discussed in footnote 5, all income taxes resulting from these awards are the responsibility of the recipient.
/7/ Adjusted for the 2-for-1 stock split that occurred on May 1, 1996.
/8/ Includes the entire amount of the awards for the three-year periods ending December 31, 1997, 1996 and 1995, respectively, although one-half of each such amount is subject to forfeiture if the recipient leaves the employ of the Company prior to December 31, 1999, and December 31, 1998, respectively, except by reason of retirement, death or disability or unless pursuant to a change in control. Mr. Zyman's award for 1995 and a portion of his awards for 1996 and 1997 reflect theoretical participation and are meant to reimburse him for loss of income incurred upon joining the Company.
/9/ For 1997, includes an award prorated to the time of Mr. Goizueta's death of $1,719,717 for the performance period ending December 31, 1997 and awards prorated to the time of his death of $1,108,594 and $580,556 for plans in progress for the 1996-1998 and 1997-1999 performance periods, respectively. /10/ For 1997, includes: for Mr. Goizueta: $4,800 contributed by the Company to The Coca-Cola Company Thrift & Investment Plan (the "Thrift Plan", described below), $196,298 accrued under The Coca-Cola Company Supplemental Benefit Plan (the "Supplemental Plan", described below), and $3,518 in above- market interest credited on amounts deferred under the Company's 1986 Compensation Deferral and Investment Program (the "CDIP", described below); for Mr. Ivester: $4,800 contributed by the Company to the Thrift Plan, $76,689 accrued under the Supplemental Plan, and $21,368 in above-market interest credited on amounts deferred under the CDIP; for Mr. Stahl: $4,800 contributed by the Company to the Thrift Plan, $35,495 accrued under the Supplemental Plan, and $21,368 in above-market interest credited on amounts deferred under the CDIP; for Mr. Zyman: $4,800 contributed by the Company to the Thrift Plan, $28,416 accrued under the Supplemental Plan, and $21,368 in above-market interest credited on amounts deferred under the CDIP; for Mr. Isdell: $4,800 contributed by the Company to the Thrift Plan and $27,291 accrued under the Supplemental Plan; and for Mr. Daft: $4,800 contributed by the Company to the Thrift Plan and $27,141 accrued under the Supplemental Plan.
The Thrift Plan is a tax-qualified defined contribution plan intended to satisfy the requirements of Section 401(k) of the Internal Revenue Code of 1986. The Company contributes to each participant's account maintained under the Thrift Plan an amount of Company stock equal to 100% of the participant's contributions to the Thrift Plan but not more than 3% of (a) the participant's earnings or (b) $160,000 for 1997, whichever is lower.
The Supplemental Plan provides a benefit to any eligible individual for whom the 3% matching contribution would otherwise be in excess of the maximum permitted under the Thrift Plan. The difference between the theoretical Company matching contribution under the Thrift Plan for each participant, without regard to the legally imposed maximum, and the maximum contribution permitted under law is used to determine the number of theoretical shares of Company Common Stock which would have been purchased for the participant's account in the absence of the IRS limitation on participant earnings of $160,000 for 1997. The value of the accumulated theoretical shares, including dividends, is paid in cash to the individual at termination of employment. A participant will forfeit all rights to future benefits under the Supplemental Plan if the participant engages in competition with the Company following termination of employment.
The CDIP permitted salaried employees of the Company and certain of its subsidiaries whose base annual salary was at least $50,000, to defer, on a one-time basis, up to $50,000 of the compensation earned between May 1986 and April 1987. The rate for the period from May 1997 through December 1997 was 16% and effective January 1, 1998 has been set at 14% per annum. At enrollment, each participant elected a method of distribution either (a) as a level annuity payable from the date of retirement until attainment of age 80, or (b) split between pre-retirement payments commencing no earlier than 1993 and a level annuity payable from the date of retirement until attainment of age 80. Participants are allowed to make a one-time election to defer the commencement of monthly annuity payments until the earlier of age 65 or death. This election is, generally, only effective if the participant terminates employment at least one year after making the election and after reaching early retirement age under the Company's pension plan. If a participant terminates employment prior to early retirement age, the amounts credited, generally, will be paid out in a lump sum in cash when the participant no longer is an employee of the Company or of any participating subsidiary.