Fat cat stories 

Doug Daft: Coke + fiasco = mo' money

Atlanta's top CEOs can immerse their companies in scandal, drive business into the ground, watch stock values plummet and still live like kings. We should all be so lucky.

The numbers don't add up. At least not to us common folk.

CEOs made 71 times what the average worker earned in 1989, according to the Economic Policy Institute. By 2003, chief executives took home 185 times more than the average worker.

And the disparity gets worse every year. In 2004, average CEO pay jumped 12 percent to $9.84 million, according to a report by Pearl Meyer & Partners, a leading compensation consulting firm.

But who are we to complain?

We're just average Joes and Janes. We don't fly in corporate jets. We don't have shareholders fork out for our country club memberships. We don't get allowances for our four mansions, and we pay our own income taxes.

We certainly don't get multimillion-dollar pension plans after just eight months on the job. We sure as hell don't get bonuses when we screw up. And when we leave a job, there's no $80 million golden parachute.

It's like we're different species from those guys. They've ascended into a separate society where the usual rules of success and failure don't apply, where you can flop miserably and still get handed millions.

Silly us. We thought the rules were the same for everyone. We had no idea you could skate through life with all ups and no downs. So, to learn a bit from our betters, we've taken a look at the careers of four current and former Atlanta CEOs. Take notes. Maybe, we can all learn how to get filthy rich in today's screwed-up corporate world.

On Feb. 17, 2000, the day Douglas Daft took the reins of the Coca-Cola Co., he was led into a high-security vault at SunTrust's corporate headquarters in downtown Atlanta. There, as is tradition, he was shown the original top-secret recipe for Coca-Cola.

That was pretty much the pinnacle of Daft's career.

A former math teacher, Daft joined the soft drink giant at age 26 at its Sydney, Australia, offices in 1969. He rose to upper management in 1982, as vice president of Coke's Far East division. By 1991 he'd moved to headquarters in Atlanta as president of the Pacific Group. In December 1999, Coke's board of directors elected him chairman, CEO and all around numero uno, replacing Douglas Ivester, who had an even shorter tenure in Coke's top office.

It's the kind of promotion that changes somebody's lifestyle forever. Beyond tens of millions in salary, bonuses and stocks options, Daft and his wife were given use of the corporate jet, which cost the company more than $100,000 a year to operate.

Daft's reign saw the Securities and Exchange Commission and the Department of Justice launch two investigations into allegedly shady accounting practices in Coke's Japan unit. He'd been the head of the Japan business when the accounting irregularities began.

While Daft was CEO, Coke also was embroiled in controversy over the following accusations: rigging a Burger King marketing test; hiding losses on a failed computerized fountain drink system; selling drinks that contained traces of dangerous heavy metals and pesticides; soaking up drinking water supplies for thousands of villagers in India; and turning a blind eye to nine union-related murders in Colombia.

Meanwhile, company revenues slid. And in 2001, his first full fiscal year as CEO, Coke stock dropped from $61 to $47 a share.

Daft responded by telling shareholders and investment analysts that things were just fine and dandy. For that, he and Coke were hit with a class-action lawsuit from shareholders. The suit, which is still in the courts, claims he misled investors by painting a rosy picture of the company's finances.

You'd think Coke's governing board would hold Daft accountable. Maybe it would have in the last century, back in the days of muckrakers and monopoly busters. But we're living in the new millennium, where corporate boards are manned by other CEOs.

In Daft's case, the Coke board gave him $69 million in salary, bonuses, stock options and other perks in fiscal 2001, the same year that Coke shares were dropping, according to the Atlanta Journal-Constitution. Based on a differing estimate of stock option values, USA Today computed his compensation as even higher - around $200 million!

In fiscal 2002, the Coke board increased Daft's bonus by half a million bucks, to $4 million, and retroactively lowered Daft's performance targets so he could be given company stock worth an additional $86.3 million.

But the capper is that last year, when Daft was pretty much forced into retirement, the board paid him a golden parachute - a farewell present of more than $36 million.



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