When Coca-Cola recently announced plans to tie all its compensation for its board of directors to specific performance targets, Chief Executive Officer Neville Isdell crowed: “This all-or-nothing approach to board compensation aligns the interests of our directors with those of shareowners more closely than any other compensation formula I have seen.”
Other hurrahs from elsewhere in the company followed. James Robinson, chairman of Coke’s committee on directors and corporate governance, said shareholders “understand that they are only rewarded when the company performs … The Board will hold itself to the same standard.” Even Coke’s largest shareholder, famed investor Warren Buffett, endorsed the policy.
