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The New York Times reports on how David Winters, a longtime money manager and founder of Wintergreen Advisers, is criticizing Coca-Cola Co. management for what he sees as an excessive executive compensation program.

According to the story, Winters says that a reading of the company's annual report suggests that "the company planned to award stock worth about $13 billion to its senior managers over the next four years, based on the company’s current stock price. Getting out his calculator, the analyst estimated that between the proposed compensation plan and a previous plan, the company had allocated as much as $24 billion toward stock-based rewards for its senior people."

"We can find no reasonable basis for gifting management 14.2 percent of the share capital of Coca-Cola, worth $24 billion at today’s share price," Winters writes in a letter he made public. "No matter how well a management team performs, it is unfathomable that they would require such astronomical sums of money to provide motivation. This compensation plan appears to place the economic well-being of management far ahead of the interests of the company’s owners."

Coca-Cola has responded to the charges by saying that Winters's analysis “is misinformed and does not reflect the facts," and that the compensation plan “is not limited to senior executives, but extends to a large group of employees and is important for incentive and retention."
KC's View:
The story makes clear that deciding whether this kind of compensation is appropriate is something that shareholders will have to decide. But the very existence of the story suggests the degree to which income and compensation disparity stories continue to gain momentum … and may be a growing cultural and economic issue in the US.