2000-2001 Shareholder Resolution Campaign

Coca-Cola

Executive Severance Pay Review

WHEREAS, when Coca-Cola’s CEO Ken Ivester took early retirement in late 1999 following a series of sales and earnings disappointments, Coca-Cola’s Board of Directors rewarded the CEO’s disappointing performance with a severance package valued at more than $30 million (source: Cable News Network);

WHEREAS, in addition to receiving the standard retirement benefits granted all Coca-Cola executives, the Board awarded Mr. Ivester an additional payment of $66,300 per month through March 2002. Starting in April 2002, this monthly payment will be reduced to $56,300 and will continue for the life of Mr. Ivester and his wife;

WHEREAS, the Board also granted Mr. Ivester three annual payments of $1,500,000 in lieu of payments forgone from the long-term incentive plan, despite the fact that during his two years as CEO Mr. Ivester failed to meet the mid-range sales and earnings targets that would have been required to reach that level of long-term performance award;

WHEREAS, the Board also granted Mr. Ivester title to his company car and agreed to pay for his home security service and club fees through May, 2001;

WHEREAS, while the Board was in the process of lavishing Mr. Ivester with these parting gifts, Coca-Cola was in the process of laying off 5,200 employees representing 18% of the company’s workforce;

WHEREAS, recent academic research links wide disparities between executive pay and the pay of other employees to a decline in employee morale;

WHEREAS, in May 2000, employee morale had deteriorated to the point that Coca-Cola’s new CEO Douglas Daft added an additional employee holiday and promised pay raises for many employees;

RESOLVED, that the Board conduct a special review of its policy on severance pay for executives. This review shall include answers to the following questions: 1) Under what circumstances would the Company grant departing executives severance benefits that significantly exceed the benefits available to all departing officers? 2) Should the Company take into consideration the impact of executive severance packages on the morale of other employees? 3) Does the Committee consider the effect of rewarding executives who have failed to meet their objectives with large severance packages on their ability to create appropriate incentives for replacement executive leadership? 4) Has the Board’s experience with Mr. Ivester’s severance package altered it philosophy on executive severance pay? A summary of the findings of this special review shall be included in next year’s report of the Compensation Committee to shareholders.

SUPPORTING STATEMENT: Executive compensation committees structure CEO pay with significant incentive components to induce the executive to take personal risks in pursuit of company profitability. However, the logic of such incentive pay is undermined when such payments are awarded in spite of poor performance.

We do not believe that Coca-Cola’s implementation of its CEO severance pay policy has served the interests of the corporation or its shareholders. The review called for in this resolution will allow shareholders to more clearly understand the Compensation Committees thinking on this important issue. Please vote YES.

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