A Proxy Battle: Shareholders vs. CEOs by Kevin Kelleher, Special to CorpWatch June 13th, 2006

The atmosphere outside the Hotel du Pont in Wilmington, Delaware, where Coca-Cola was holding its 2006 shareholder meeting, was a festive one. For a company that has worked hard to make its beverages appear ubiquitous in sports stadiums and amusement parks, it was appropriate enough. The trouble was, it wasn’t the kind of festivity Coke ever asked for – or wanted. A circus-like gathering of protesters vied to get the attention of, or steal the spotlight away from Coke CEO E. Neville Isdell: Harvard students beating on plastic barrels with drumsticks, union reps unloading into bullhorns and a blind taste-test daring passers-by to tell the difference between Delaware tap water and the much more expensive variety that Coca-Cola sells under the toney name Dasani. Inside, Isdell, suckling at a plastic bottle of Coke, proclaimed the painfully obvious: “Not everyone in this room is going to agree with everyone's views,” he said. “In the end, we truly want The Coca-Cola Company to be regarded as a great business and recognized as a great corporate citizen." Isdell isn’t alone – hundreds of corporate boards have spent the spring proxy season facing challenges of all kinds from shareholders. From human rights to the environment, to corporate governance, shareholders’ resolutions are garnering more and more votes each year, and corporations are being forced to deal with their gripes face on. The protesters outside were simply pushing Coca-Cola toward becoming that great corporate citizen sooner rather than later. Toward that end, there were three resolutions submitted to shareholders: • One, sponsored by the New York City Employees Retirement System, sought the establishment of an independent committee to examine whether Coca-Cola colluded with Colombian paramilitary forces in anti-union violence against bottlers in the South American country; • Another, sponsored by the As You Sow Foundation, pushed for a report that would come up with a strategy to recover and recycle more used bottles and cans; • A third, sponsored by Harrington Investments and the Sisters of Charity in Cincinnati, sought a report “on the potential environmental and public health damage of each of its plants, affiliates and proposed ventures extracting water from areas of water scarcity in India.” While each proposal promised to take Coca-Cola a step toward the goal of corporate citizenship that Isdell teased at his speech, and while none were asking for the company to put forth onerous costs or to disclose proprietary information that could blunt its competitive edge, each of the three motions failed. One shareholder who labeled such complaints “an attack on capitalism” that diminishes Coca-Cola’s brand won enthusiastic applause from profit-minded shareholders, or what it calls its “share earners.”