Campaign to Stop Killer Coke Update

Newsletter June 16, 2004

1. Protest at Gracie Mansion

Campaign supporters in the New York City area: Please join the Campaign for a protest at 5:00 pm on Friday, June 18th at Gracie Mansion (mayors' residence, although Bloomberg does not live there) on East End Ave and 88th Street in Manhattan. There will be a vigil and informational picketing led by NYC Council Member Hiram Monserrate to protest Coke's sponsorship of a reception at the mansion for the New York City Olympic torchbearers.

In a letter to Mayor Bloomberg on June 3, Council Member Monserrate stated: "I join with you in supporting our Olympic team as they prepare to compete in this summer's games…However, I have concerns regarding Coca-Cola's sponsorship of the reception presenting the New York City torchbearers…

"After visiting Coca-Cola's bottling plants in Colombia, I was disturbed by the continuing violence and abuse of union leaders by local paramilitaries and by Coca-Cola's lack of action in their defense. Given the ongoing human rights violations in Coca-Cola's bottling plants as well as a possible upcoming review of Coca-Cola by the Worker Rights Consortium, I ask that you do not accept their offer to sponsor this reception. Furthermore, I ask that you reject all future offers from Coca-Cola until the violence at their plants has ceased and the rights of all of their workers have been fully protected."
Get the protest flyer in pdf format.
Get the protest flyer in html format.

2. New York Times Editorial, published in today's newspaper

"Another Coke Classic"
Wednesday, June 16, 2004
Editorial, The New York Times

Coke, America's most iconic brand, no longer seems to be it, or even the real thing. It isn't just Coca-Cola's lackluster performance that is worrisome. After all the attention placed on corporate governance in the post-Enron world, this blue-chip company's blue-chip board has become a weak guardian of shareholder interests. The board does not seem to have noticed that doling out tens of millions of shareholder dollars for mediocre results is no longer in vogue. The company has paid out more than $200 million in recent years to departing executives, most prominently to its former chief executives Douglas Ivester and Douglas Daft.

Steven Heyer will be the latest executive to leave Coke with a smile after a disappointing tenure. Mr. Heyer, the 51-year-old president and chief operating officer, was passed over in a very public search for a new chief executive. He will receive severance pay of at least $24 million for his three years of service. Mr. Heyer had been considered the heir apparent, but the top job went instead to Neville Isdell, a Coke veteran who now becomes the third chief executive in seven years. Mr. Heyer's imminent departure from the company was announced last week.

Roberto Goizueta, Coke's widely admired boss from 1981 to 1997, made a fortune in stock options back in the days when we were all assured that chief executive pay was pegged to performance, for better or worse. Companies like Coke haven't lived up to that bargain, as top managers get outsized pay packages that bear no relationship to their performance. This lack of oversight raises a question: what else are these directors missing?

For star power, Coke's 17-member board is unparalleled, including such luminaries as Warren Buffett, Herb Allen and Barry Diller. But the brainpower may be offset by the coziness that comes from the directors' long tenure and their business relationships with the company. For instance, Mr. Allen's firm is Coke's investment bank, and one of Mr. Buffett's companies buys fountain syrup from Coke. According to data from the Corporate Library, an independent research company, the average tenure on Coke's board is 11 years, with four members serving more than 20.

Coke's celebrity directors have not hesitated to call for regime change in Atlanta, but at an exorbitant cost. Shareholders may wonder why the entrenched board keeps failing at its main responsibility: picking a strong management team in the first place.

In the past few years, Coke has faced a number of shareholder resolutions aimed at compensation reform. But to achieve that, the shareholders may have to go after the board itself.

3. Canadian Auto Workers Support Campaign

The 2004 Human Rights Conference of Canadian Auto Workers was held in Port Elgin, Canada from June 9 to 11. The CAW is the largest private sector union in Canada, representing 270,000 workers, including 3,000 Coca-Cola workers. Campaign materials were distributed at the conference and the delegates endorsed a letter/petition drive to protest Coca-Cola's human rights abuses at their Colombian bottling plants.

4. Report on Child Labor and Coke

"Turning a Blind Eye: Hazardous Child Labor in El Salvador's Sugarcane Cultivation," exposed the fact that sugar used by The Coca-Cola Company was "the product of child labor that is both hazardous and widespread… Nearly every child interviewed by Human Rights Watch (HRW) in El Salvador said that he or she had suffered machete gashes on the hands or legs while cutting cane…the most dangerous of all forms of agricultural work."

HRW's Michael Bochenek commented that "If Coca-Cola is serious about avoiding complicity in the use of hazardous child labor, the company should recognize that its responsibility to ensure that respect for human rights extends beyond its direct suppliers." (See the report at www.hrw.org)

You can read an article about the report in our "News" section reprinted by commondreams.org from OneWorld.net written by Jim Lobe.

5. www.killercoke.org website changes

We split the "News" section into "News" and "Campaign Reports." "News" now includes only press articles, while "Campaign Reports" includes articles written by the Campaign, communiqués, leaflets and the like. You can get to the "Campaign Reports" menu from the beginning of the "News" menu.

We've added the appendices to the report written by Hiram Monserrate about the April 2004 NYC fact-finding delegation's report on human rights violations by Coke. The report itself can be found on our web page and in the "Campaign Reports" section. The link to the appendices can be found with the report.