Coca-Cola CEO's Pay Cut: What You Need to Know

Coca-Cola CEO Muhtar Kent isn't making as much money as he used to. Kent's salary fell by 16% last year as the beverage giant failed to hit several performance targets that had been set by Coke's board of directors.

In the video below, Fool contributor Demitrios Kalogeropoulos discusses that underperformance, noting that Coke's beverage sales improved by just 2% for the year -- well below the company's long-run 3%-4% growth goal. But the broader metric that Coca-Cola failed to hit was shareholder return: Investors saw an effective return of 17% last year. The S&P 500, meanwhile, logged an almost 30% gain.

Still, the good news for investors is that Kent's pay package seems aligned with their interests, Demitrios argues, as it is dependent on long-run business performance and total shareholder returns.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Coca-Cola and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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