David M. Katz
Coca-Cola ConsolidatedAbout David M. Katz
David M. Katz, age 56, is President and Chief Operating Officer of Coca-Cola Consolidated (since December 2018) and has served on the Board since 2018, currently sitting on the Executive Committee . He has led finance, product supply, stewardship and HR at COKE and previously held senior roles across the Coca-Cola system (CCE/CCR/BSSS) since 1993, giving him deep operational and financial expertise in bottling and distribution . Under his senior leadership tenure, COKE’s income from operations rose from $439.2 million in 2021 to $920.4 million in 2024, the company doubled its regular dividend and paid two special dividends, and total shareholder return (TSR) reached 447 on a $100 index (2019–2024), reflecting significant value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Coca-Cola Consolidated | President & COO | Dec 2018–present | Enterprise-wide operations leadership; execution on product supply and profitability |
| Coca-Cola Consolidated | EVP & CFO | Jan 2018–Dec 2018 | Finance leadership during step-up in earnings and cash generation |
| Coca-Cola Consolidated | EVP, Product Supply & Culture/Stewardship | Apr 2017–Jan 2018 | Supply chain and culture-focused transformation |
| Coca-Cola Consolidated | EVP, Human Resources | Apr 2016–Apr 2017 | Talent and organization alignment |
| Coca-Cola Consolidated | Senior Vice President | Jan 2013–Mar 2016 | Senior operations oversight |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Coca-Cola Refreshments (CCR) | Senior VP, Midwest Region | Nov 2010–Dec 2012 | Regional P&L and execution for The Coca-Cola Company subsidiary |
| Coca-Cola Enterprises (CCE) | VP, Sales Operations (East BU) | Jan 2010–Nov 2010 | Commercial operations and sales enablement |
| Bottlers’ Sales & Services Company LLC | Chief Procurement Officer; President & CEO | 2008–2010 | System-wide procurement synergy and competitiveness |
| Coca-Cola Enterprises (CCE) | Logistics Consultant | Began 1993 | Early supply chain optimization groundwork |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 885,333 | 959,485 | 1,025,278 |
| Bonus ($) | — | 1,000,000 | 1,000,000 |
| Change in Pension Value & NQDC Earnings ($) | — | 235,061 | 140,297 |
| All Other Compensation ($) | 635,330 | 639,551 | 764,504 |
| Total Compensation ($) | 4,613,479 | 6,748,231 | 7,007,062 |
Notes:
- 2024 base salary increased 6% to improve market competitiveness and retention .
- “Bonus” reflects the discretionary Achievement Recognition Award (paid in 2023 and 2024) recognizing multi-year performance and stockholder value creation .
- Key perquisites in 2024 included executive allowance ($25,000), life insurance premiums, tax gross-ups ($19,678), and personal aircraft use ($17,809) .
Performance Compensation
Annual Bonus Plan (ABP) – FY 2024 Structure and Outcome
| Metric | Weight | Threshold | Target | Maximum | Adjusted Achievement | Payout % |
|---|---|---|---|---|---|---|
| EBIT ($mm) | 40% | 797.0 | 877.0 | 917.0 | 921.6 | 150.0% |
| Free Cash Flow ($mm) | 40% | 360.0 | 400.0 | 440.0 | 440.1 | 150.0% |
| Revenue ($bn) | 20% | 6.339 | 6.519 | 6.579 | 6.510 | 97.6% |
| Overall Goal Achievement Factor | — | — | — | — | — | 139.5% |
| Individual Performance Factor | — | — | — | — | — | 1.43 |
- Target bonus percentage for Katz: 100% of base salary; formula payout = Base × Target% × Overall Factor × Individual Factor; 2024 ABP payout for Katz: $2,072,345 .
- ABP adjustments reconcile to GAAP: 2024 adjusted revenue $6,510.2 million; adjusted FCF $440.1 million .
Long-Term Performance Plan (LTPP)
| Item | Value |
|---|---|
| 2024–2026 LTPP target award | 150% of base; $1,558,272 for Katz |
| Performance measures/weights | EBIT 50%, Free Cash Flow 30%, EBIT Margin 20% |
| Payout curve | 0% < threshold; 50–99% threshold–target; 100–149% target–max; 150% at/above max |
| Payment timing | Early FY 2027; paid in cash (no equity for non-CEO executives) |
| 2022–2024 LTPP (paid early FY 2025) | Long-term performance factor: 150%; Katz award earned: $2,004,638 |
- Non-GAAP adjustments for LTPP period produced adjusted cumulative EBIT of $2,403.0 million and three-year average adjusted EBIT margin of 12.11% .
Equity Ownership & Alignment
| Item | FY 2024 |
|---|---|
| Beneficial ownership – Common Stock (sh) | —; less than 1% of class |
| SSIP aggregate balance ($) | 993,017 |
| SSIP company contributions ($, 2024) | 30,758 |
| LTRP aggregate balance ($) | 3,551,057 |
| LTRP company contributions ($, 2024) | 639,630 |
| ORP present value ($) | 1,214,264 |
| Shares pledged as collateral | Prohibited under Insider Trading Policy for directors/officers; no pledge disclosed for Katz |
Alignment/vesting:
- SSIP company contributions vest 20% annually over five years; all contributions vest upon retirement, death, or change-in-control; pre-2006 fixed accounts earn up to 13% (Katz has post-2005 accounts per table balances) .
- LTRP vests 50% by age 51 and ratably to age 60; fully vests on death, disability, or change-in-control; payout in lump sum or installments .
- ORP normal retirement age 60; estimated annual retirement benefit for Katz: $359,573 for 10 years; non-compete for 3 years post-termination (except after both termination and change-in-control) .
Employment Terms
| Scenario (as of 12/31/2024) | Amounts for Katz ($) |
|---|---|
| Voluntary resignation or termination without cause | ORP 1,289,063; LTRP 1,963,260; SSIP 993,017; ABP 2,072,345; LTPP 2,004,638; Total 8,322,323 |
| Termination for cause | SSIP 993,017; Total 993,017 |
| Death | ORP 1,718,750; LTRP 3,551,057; SSIP 993,017; ABP 2,072,345; LTPP 3,327,223; Total 11,662,392 |
| Disability | ORP 1,718,750; LTRP 3,551,057; SSIP 993,017; ABP 2,072,345; LTPP 3,327,223; Total 11,662,392 |
| Change in control | ORP 2,500,000; LTRP 3,551,057; SSIP 993,017; ABP 2,072,345; LTPP 3,327,223; Total 12,443,642 |
Additional terms:
- No individual employment agreements; severance/change-in-control benefits flow through ORP, LTRP, SSIP, ABP and LTPP as defined by plan terms (e.g., pro-rata ABP/LTPP for change-in-control, post-vesting payouts, lump-sum options) .
Board Governance
- Director since 2018; Executive Committee member; employee-directors (including Katz) receive no additional director fees .
- Controlled company status under Nasdaq; Board not required to be majority independent; Katz is not listed as an independent director .
- Lead Independent Director (Dennis A. Wicker) provides independent oversight; Board held 5 meetings in 2024, with directors meeting attendance ≥75% and 11 of 12 attending the 2024 annual meeting .
Compensation Committee Analysis
- Committee comprised of independent directors; uses Korn Ferry and market surveys; aims for compensation within 50th–75th percentile range for similar-sized food/beverage peers; peer group includes Keurig Dr Pepper, McCormick, Monster, Molson Coors, Campbell Soup, etc. .
- Pay-for-performance metrics emphasize EBIT, Free Cash Flow, and EBIT Margin across annual and long-term programs; clawback policy effective August 1, 2023 compliant with Exchange Act Section 10D/Nasdaq 5608 .
Director Compensation (Katz-specific)
- As an employee-director, Katz received no separate cash retainers or equity for board service in 2024; director fees are only paid to non-employee directors .
Performance & Track Record
- TSR on $100 initial investment grew to 447 by 2024; net income and income from operations strengthened materially through 2024 .
- Company achievements 2021–2024: income from operations increased from $439.2 million to $920.4 million; doubled regular dividend; paid two special dividends totaling nearly $180 million; ~ $950 million capex into distribution centers, facilities, fleet; share price more than doubled over the period .
Risk Indicators & Red Flags
- Hedging/short selling prohibited; certain insiders barred from using COKE securities as collateral in margin accounts (reduces alignment concerns related to pledging) .
- Tax gross-ups are paid on certain benefits (e.g., insurance premiums, aircraft use, Social Security/Medicare on ORP vesting), which some investors may view unfavorably .
- Controlled company governance (limited independence requirements) and combined CEO/Chair structure are mitigated by Lead Independent Director role and committee independence .
Compensation Structure Insights
- Year-over-year: 2024 vs 2023 shows higher salary and “All Other” (retirement plan contributions), with ABP and LTPP continuing to drive most variable pay; discretionary Achievement Recognition Award maintained ($1,000,000) aligned to multi-year performance .
- Shift profile: Executive LT incentives are cash-settled (no RSUs/options for non-CEO), limiting forced stock sales or option-driven selling pressure; CEO participates in a performance equity plan with Class B availability, but non-CEO cash structure reduces dilution risk and insider selling pressure .
Equity Ownership & Pledging Policy
- Beneficial ownership of COKE common stock by Katz is immaterial (<1%); no option awards; equity plan share reserve limited to Class B for the CEO’s performance equity plan; Insider Trading Policy prohibits hedging/short selling and margin pledging .
Say-on-Pay & Shareholder Feedback
- Clawback policy implemented; compensation risks assessed as not likely to have a material adverse effect; the proxy does not disclose say-on-pay vote results for 2024 .
Investment Implications
- Pay-for-performance alignment is strong: ABP/LTPP targets on EBIT/FCF/EBIT Margin, with 2022–2024 LTPP hitting maximum payout and ABP 2024 above target, suggesting robust execution under Katz’s operational leadership; discretionary achievement awards underscore multi-year value creation .
- Retention risk appears manageable: substantial vested/unvested retirement balances (LTRP/ORP/SSIP) plus above-market total comp provide strong retention incentives; non-compete for three years post-termination in ORP further mitigates flight risk .
- Trading signals: absence of equity grants/options for Katz reduces near-term insider selling pressure; watch for continued overachievement on EBIT/FCF metrics, dividend actions, and any extraordinary cash awards as indicators of confidence and momentum .
- Governance considerations: controlled company status and Katz’s dual role (executive plus director) warrant monitoring of independent oversight; the presence of a Lead Independent Director and independent committees partially offset independence concerns .