Annual Meeting Offers No Clues on CEO Succession

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CHICAGO ( -- Aside from a tussle with an angry shareholder, Coca-Cola Co.'s annual meeting yesterday offered few surprises, nor did
Photo: AP
Outgoing Coke chairman-CEO Douglas N. Daft downplayed the succession controversy at yesterday's annual meeting.
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it quiet the intrigue around its CEO succession.

'Very little fact'
Outgoing chairman-CEO, Douglas N. Daft, opened the meeting in Wilmington, Del., and sought to downplay the public controversy currently swirling around the company as something "fueled by a lot of speculation and very little fact."

Mr. Daft's February announcement that he would step down at the end of this year and that the company's president and chief operating officer, Steve Heyer, was not necessarily his successor, set off a whirlwind of publicity that greatly raised the expectation level coming into this annual meeting.

But attendees left with no additional information about who would be in charge of the beverage giant in eight months, when Mr. Daft vacates his post.

'Ill informed speculation'
"You've read a lot about the succession question and the search committee," he told the meeting. "The board of directors is currently engaged in a thorough and professional process to identify my successor, which has led to understandable but and ill-informed speculation."

He called on Don Keough, the board member heading the CEO search committee, to further explain the search effort.

Mr. Keough, chairman of Allen & Co. and a former Coke president and chief operating officer, said "dozens and dozens" of candidates had been considered and "several" were interviewed.

"We're right in the middle of the process," he said. "There's been a media frenzy about this, it just goes with the territory. With all deliberate speed we'll be presenting a candidate to this board. To say anything more than that would be

UPDATE 04.22.2004 -- No sooner had the Coca-Cola meeting ended when new speculation cropped up that Gillette CEO Jim Kilts and the other reported leading candidates had turned down the job, according to a story in today's Wall Street Journal.

The Journal said Carlos Gutierrez, chairman-CEO of Kellogg Co., also declined and that Robert Eckert, chairman-CEO of Mattel Inc., and R. Kerry Clark, vice chairman of Procter & Gamble Co., are still being pursued. An executive close to the marketer said nobody has yet been offered a job.

The report also named Robert L. Nardelli, chairman-CEO of Home Depot Inc. and a Coke director for the past two years as a possible candidate.
totally inappropriate."

'Unbelievably important'
Industry analyst turned consultant Manny Goldman said he wasn't surprised the board had no CEO announcements. "This is so unbelievably important to them that the last thing they want to do is risk it by talking about their candidates," he said. "They don't want to blow this one."

There has been much speculation in recent weeks that Gillette Co.'s CEO, Jim Kilts, is the leading candidate for the post. As rumors about such outside candidates have grown louder, observers have suggested Mr. Heyer's odds for getting the position have declined. Few industry observers believe he would stay at Coke if he is not named CEO.

Either way, "He'll come out of this OK," said Mr. Goldman. "He's not a wilting violet."

Human rights issue
Addressing other meeting issues, Mr. Daft tried to calm concerns over allegations that the company was violating the human rights of Colombian workers. "The charges linking our company to atrocities in Colombia are outrageous and false," he said. "The Coca-Cola Co. has nothing to do with it. It's a fact corroborated by numerous third parties including the Colombian attorney general."

Those allegations were raised by shareholder Ray Rogers in the question-and-answer period. Mr. Rogers was subdued and forcibly removed from the meeting at the Hotel du Pont after he refused to end his commentary, even though his microphone had been turned off. Later in the meeting civil rights leader Jesse Jackson said security guards may have been excessive in their attempt to restrain Mr. Rogers.

Withheld votes
Another potential drama was quashed after shareholders overwhelmingly approved the board nominees despite scrutiny by corporate governance groups. In the weeks leading up to the meeting, some groups recommended withholding votes for several board members, including Warren Buffett, claiming those incumbents weren't independent enough.

California Public Employees' Retirement System, which owns 12.7 million Coke shares, warned it would withhold its votes for Mr. Buffett and eight other board members. However, Mr. Buffett, the chairman of Berkshire Hathaway, won 84% of shareholder votes. That was reportedly the largest percentage ever withheld for a board member, but it was not enough to oust him.

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