NLPC presented a shareholder proposal today at The Coca-Cola Company‘s 2025 annual meeting of shareholders that asked the company to drop diversity, equity, and inclusion goals from its executive pay incentives.
NLPC argued that these goals are discriminatory, deprioritize merit in hiring and promotions, and increase legal and reputational risk. The company’s board of directors opposed our proposal, as explained on page 97 of its proxy statement.
Shortly after NLPC submitted the proposal last fall, Coca-Cola sought permission from the Securities and Exchange Commission to exclude it from the proxy statement and annual meeting, claiming the company had already “substantially implemented” the proposal’s request. The SEC disagreed with Coca-Cola, clearly stating that in its view, the proposal had not been implemented. The company made the exact same claim to shareholders in the proxy statement anyway. Consequently, NLPC filed a complaint with the agency against Coca-Cola for disseminating materially false and misleading information to shareholders.
NLPC’s response to the board’s opposition statement, published in the proxy statement, was filed with the Securities and Exchange Commission last month. Presenting the proposal at the meeting was Paul Chesser, director of NLPC’s Corporate Integrity Project. An audio recording of his presentation can be found here, and a transcript of his three-minute remarks follows:
Good morning.
Coca-Cola’s Board and legal team tried extremely hard to keep our Proposal, which is Item 7 on the proxy statement, from being considered at this meeting.
The Proposal calls upon the Board’s Compensation Committee to re-examine and consider eliminating the portion of its executive pay that is incentivized by pursuing diversity, equity and inclusion – or DEI – goals.
Nearly all of Corporate America has recognized that DEI policies have become toxic and rejected by most consumers in the United States, but Coca-Cola still clings to these discriminatory practices.
For example Coke’s top competitor, PepsiCo, eliminated DEI-based executive incentives, and we withdrew our proposal there.
You would think that Coca-Cola would proudly and outwardly boast that it is holding on to DEI, but board quietly downplays it, and then misleads shareholders about it.
Our proposal, Item 7, explains why the Company should look hard at removing DEI-based incentives from top executives’ compensation formulas.
Rather than just admit that they don’t want to do that, instead Coca-Cola states in its opposition response to the Proposal that, in so many words, that “they already do that.”
In its attempt to convince the Securities and Exchange Commission to allow the Company to exclude our Proposal, Coca-Cola made that very argument – that they have already QUOTE “substantially implemented” the Proposal, and therefore it should not be allowed at this annual meeting.
There’s just one problem.
You, my fellow shareholders, are hearing me present this proposal, Item 7, because the SEC told the Company that in its expert view, Coca-Cola absolutely has NOT already implemented the Proposal.
That is clear in the compensation discussion of the proxy statement.
You see, all the non-financial goals of what Coca-Cola calls the “Business Performance Factor” for its executives’ annual compensation are based on one consideration, and that is “inclusion.”
They are called “non-financial,” because basically the Compensation Committee can award however much bonus money it wants, just as long as executives demonstrate to Committee members that they have made QUOTE “progress” on “inclusion.”
But here’s possibly the worst part.
In its opposition to our Proposal, Item 7, Coca-Cola tells you, fellow shareholders, the exact same thing that it told the SEC – that it has already implemented our Proposal.
As I told you moments ago, the SEC thoroughly rejected Coca-Cola’s claim, yet the Board repeated that same information to you anyway in the proxy.
That’s why my organization has filed a complaint with the SEC against Coca-Cola for disseminating materially false information to shareholders.
Please vote FOR Item 7.
Following Chesser’s presentation, Chairman/CEO James Quincey (pictured above) told annual meeting attendees that despite what they just heard, that the Company’s Compensation Committee did do what the proposal calls for — except when it came to the part of the proposal’s request to “consider eliminating” DEI from executive pay incentives, he omitted the word “eliminating” (nor did he replace it with any synonym for it). Thus it’s clear Coca-Cola still won’t even consider ridding the company of DEI rot. Therefore Quincey doubled-down on making materially false and misleading statements to shareholders.
Read NLPC’s shareholder proposal for the Coca-Cola annual meeting here.
Listen to Paul Chesser’s presentation of the proposal at the meeting here.
Read NLPC’s response, filed with the SEC, to the company’s opposition to our shareholder proposal, here.
Read NLPC’s complaint against Coca-Cola for making materially false and misleading statements here.
