Today.Az » Weird / Interesting » Coke CEO to resign
18 March 2013 [11:30] - Today.Az
Coca-Cola Amatil has announced that its chief executive Terry Davis will step down next year after more than 12 years running the beverage group.
Chairman David Gonski said Mr Davis will retire on August 31 next year.
“Over the last 18 months there has been much speculation concerning the tenure of our long serving Group Managing Director, Terry Davis. I am therefore very pleased to confirm that Terry will remain as Group Managing Director until 31 August 2014.
The next 18 months will be crucial for CCA in the further development of its alcoholic beverage strategy and the accelerated plans for growth of the Indonesian business and the Board felt it was prudent to provide the market with certainty as to Terry’s tenure," he said.
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CCA sold its Pacific Beverage’s joint venture to Foster’s and is prevented from re-entering the Australian beer market until December this year.
The company has already been preparing for its re-entry. Last year it added signed up to distribute Sweden's Rekorderlig cider from January 1, 2014, giving it exposure to the fastest growing category in Australia's alcoholic beverages sector.
CCA has also loaned $46 million to a joint venture vehicle, Australian Beer Company, that will acquire what it describes as the world-class brewery operation recently set up by Yellow Tail's owner, the Casella group.
This loan will convert to a 50 per cent share in the business on December 16 next year when CCA's non-compete clause with Foster’s new owner, SABMiller, expires.
"This new agreement with Casella will give CCA the opportunity to access a world class, low-cost brewery which will enable us to re-enter the premium beer market in Australia after December 16, 2013," Mr Davis said at the time.
But speculation has been building for some time that Mr Davis is looking to step down.
Every November, Davis meets chairman David Gonski to discuss renewing his contract for another 12 months. A spokeswoman said last month that: "They did that in 2012 and Terry will be group managing director at least until the end of 2013. However, he has said that after 11 years ... he is nearer the end of his career here than at the beginning."
The CCA board will form a subcommittee to commence the search process for a new group MD is expected to include internal and external candidates.
His most likely successor is tipped to be Warwick White, the head of the Australasian business, who has spent more than 28 years in the global Coca-Cola system.
Other contenders are believed to include John Murphy, a former CEO of beer giant CUB, who joined Coca-Cola Amatil to help it develop its alcohol strategy. In July, he was appointed managing director of Australian beverages.
Mr Gonski praised the accomplishments of Mr Davis during his tenure at CCA.
“In his 11 years so far as Group Managing Director, Terry has made a significant and lasting contribution in transforming CCA into a world-class, premium multi-beverage business.
The market capitalisation of CCA has increased from $3.5 billion to $11.4 billion, Group return on capital has increased from just over 7% in 2001 to 24% today, generating total shareholder returns of nearly 400%,” Mr Gonski said.
Mr Davis remained among Australia's best-paid executives last year, earning a total pay package worth $7.8 million. His salary was $2.3 million. The rest of his package came from superannuation and performance-related incentive payments and other perks.
CCA said that, it is antcicpated Mr Davis will not be entitled to any payment in lieu of notice on his departure.
He will not participate in the company’s long term incentive plan for 2013 and 2014 but will instead receive an increase in his target short term incentive of $750,000 for each of these years.
His STI will be reduced pro-rata for 2014 as he will not be serving for the full year and the board will use its discretion on whether to grant a pro-rata award - or cash - in relation to the 2012 - 2014 LTISP.
/smh.com.au/
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