Coca-Cola — Proxy Access
RESOLVED: Shareholders of Coca-Cola ask the board of directors to amend the bylaws to adopt a “proxy access” procedure whereby Coca-Cola shall include in any proxy materials prepared for a shareholder meeting at which directors are to be elected, the name, the Disclosure and the Statement (as defined herein) of any person nominated for election to the board of directors by a shareholder or group thereof (the “Nominator”) that meets the criteria appearing below, and Coca-Cola shall allow shareholders to vote on such nominee on Coca -Cola’s proxy card. The number of shareholder-nominated candidates in proxy materials shall not exceed one-quarter of the number of directors then serving. This bylaw should provide that a Nominator must:
(a) have beneficially owned 3% or more of Coca-Cola’s outstanding common stock continuously for at least three years before submitting the nomination;
(b) give Coca Cola written notice within the time period identified in Coca-Cola’s bylaws of information required by the bylaws and rules of the Securities and Exchange Commission about (i) the nominee, including his or her consent to being named in the proxy materials and to serving, if elected; and (ii) the Nominator, including proof of ownership of the required shares (the “Disclosure”); and
(c) certify that (i) it will assume liability stemming from any legal violation arising out of its communications with (company) shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable laws if it uses soliciting material other than Coca-Cola’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business and not to change or influence control at Coca-Cola.
The Nominator may submit with the Disclosure a statement not exceeding 500 words in support of the nominee (the “Statement”). The board shall adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaws and any applicable federal regulations, and the priority to be given to multiple nominations exceeding the one-quarter limit.
We advocate enhanced Board accountability and believe long-term shareholders should have a meaningful voice in nominating directors. The case for proxy access at Coca-Cola is compelling: Over the last decade, the company has been embroiled in numerous controversies alleging degradation in worker safety, the violation of human rights, misleading marketing tactics and worsening water conditions for farmers in many countries, including India and Mexico. Furthermore, proxy access has the potential to enhance board performance with little cost or disruption to companies.[i]
By ignoring these issues, the Board has failed to insulate the company from regulatory pressure and reputational risks.
[i] Chiara Trabucchi et al, “Proxy access in the United States: Revisiting the Proposed SEC Rule”. CFA Institute (2014): 8