J. Frank Harrison, III
Coca-Cola ConsolidatedAbout J. Frank Harrison, III
Chairman and CEO of Coca-Cola Consolidated since 1994; Director since 1986; first employed by the Company in 1977. Age 70. He is the controlling stockholder via Class B Common Stock structures and leads a “controlled company” under Nasdaq rules . Pay-versus-performance disclosures show strong shareholder value creation and operating performance during his tenure: cumulative indexed TSR rose from 91.05 (2020) to 447.02 (2024), net income increased to $633.1 million, and income from operations reached $920.4 million in 2024 .
Five-year performance (company-reported measures)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return (index, $100 initial) | 91.05 | 212.36 | 176.08 | 322.05 | 447.02 |
| Net Income ($000s) | 172,493 | 189,580 | 430,158 | 408,375 | 633,125 |
| Income from Operations ($000s) | 313,378 | 439,171 | 641,047 | 834,451 | 920,350 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Coca-Cola Consolidated | Vice Chairman of the Board | 1987–1996 | Board leadership prior to becoming Chairman and CEO |
| Coca-Cola Consolidated | Division Sales Manager; Vice President | Pre-1986 (joined 1977) | Ground-level commercial and operational experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Harrison Family entities (JFH III Harrison Family LLC; JFH Family Limited Partnership—FH1; JFH3 Holdings LLC) | Managing/Control arrangements as described | Ongoing | Structures holding Class B shares; align long-term control and voting power |
Fixed Compensation
- Base salary increased 3.0% from $1,334,607 (2023) to $1,374,645 (effective Mar 18, 2024) .
- 2024 target bonus percentage: 100% of base salary (unchanged vs 2023) .
- 2024 total fixed and other compensation components include executive allowance ($45,000), life insurance ($17,304), tax gross-ups ($78,193), company contributions to defined contribution plans ($58,212), and personal aircraft use ($145,170) .
Select 2024 fixed comp details
| Component | Amount ($) | Notes |
|---|---|---|
| Base Salary | 1,374,645 | Effective 3/18/2024 |
| Executive Allowance | 45,000 | Annual allowance policy |
| Life Insurance | 17,304 | Company-paid premiums |
| Tax Gross-Ups | 78,193 | On certain benefits (incl. aircraft) |
| Company DC contributions | 58,212 | 401(k) and SSIP match/discretion |
| Personal aircraft use | 145,170 | Board requires CEO to use company aircraft; safety/efficiency rationale |
Performance Compensation
- Annual Bonus Plan metrics/weights (2024): EBIT 40%, Free Cash Flow 40%, Revenue 20%; payout curves 0–150% .
- 2024 outcomes: Adjusted EBIT $921.6m (max), Adjusted FCF $440.1m (max), Adjusted Revenue $6.510b (97.6% of target), Overall Goal Achievement Factor 139.5%; Individual Performance Factor 1.43; CEO bonus $2,742,211 .
- Long-Term Performance Equity Plan (LTPEP): 2024–2026 target $7,150,000; metrics match LTPP (EBIT 50%, FCF 30%, EBIT Margin 20%); 2022–2024 LTPEP paid $10,275,000 at 150% factor; CEO elected cash settlement .
2024 Annual Bonus Plan mechanics and results
| Metric | Weight | Threshold | Target | Maximum | Adjusted Achievement | Payout % |
|---|---|---|---|---|---|---|
| EBIT | 40% | 797.0 | 877.0 | 917.0 | 921.6 | 150.0% |
| Free Cash Flow | 40% | 360.0 | 400.0 | 440.0 | 440.1 | 150.0% |
| Revenue | 20% | 6.339 | 6.519 | 6.579 | 6.510 | 97.6% |
| Overall Goal Achievement Factor | — | — | — | — | — | 139.5% |
| Bonus Calculation | Value |
|---|---|
| Base × Target Bonus × Goal Factor × Individual Factor | $1,374,645 × 100% × 139.5% × 1.43 = $2,742,211 |
LTPEP awards
| Period | Target ($) | Performance Factor | Payout ($) | Settlement |
|---|---|---|---|---|
| 2022–2024 | 6,850,000 | 150% | 10,275,000 | Cash (elected) |
| 2024–2026 | 7,150,000 | TBD | TBD (early FY27) | Cash/Class B (CEO election) |
- Achievement Recognition Award: one-time discretionary bonus of $4,250,000 (CEO) granted in Feb 2025, reflecting multiyear performance milestones including income from operations rising from $439.2m (2021) to $920.4m (2024), dividend increases, special dividends (~$180m total), and ~$950m capital investments; supports retention in competitive market .
Equity Ownership & Alignment
- Beneficial ownership: Harrison group beneficially owns 1,004,394 Class B shares (convertible 1:1 to Common) and 1,004,394 Common shares (assuming conversion), equating to 11.5% of Common and 99.97% of Class B; total votes 20,087,880; 72.2% of total voting power as of 3/17/2025 .
- Holdings via entities: JFH Family Limited Partnership—FH1 (535,178 Class B), a trust (78,596 Class B), and JFH3 Holdings LLC (390,620 Class B); Harrison is sole voting and investment power over these entities; disclaims beneficial ownership except to pecuniary interest .
- Insider trading policy prohibits hedging and short selling; also prohibits directors/officers from using company securities as collateral in margin accounts; the policy is designed to promote compliance with insider trading laws and listing standards .
Beneficial ownership snapshot (as of March 17, 2025)
| Holder/group | Class | Shares | % Class | Total Votes | % Total Votes |
|---|---|---|---|---|---|
| J. Frank Harrison, III group | Common | 1,004,394 (assumes conversion) | 11.5% | — | — |
| J. Frank Harrison, III group | Class B | 1,004,394 | 99.97% | 20,087,880 | 72.2% |
Deferred and retirement balances (alignment/retention)
| Plan | Aggregate Balance at 12/31/2024 ($) |
|---|---|
| SSIP (supplemental deferred comp) | 17,890,310 |
| ORP present value (supplemental defined benefit) | 12,906,293 |
- SSIP vesting/distribution: pre-2006 fixed accounts earn up to 13% (CEO’s fixed account earns 6% since age 60); post-2005 accounts are in mutual fund-like choices; distributions as lump sum or installments, with accelerated vesting/change-in-control provisions .
- Stock pledging: margin pledging prohibited for directors/officers; hedging/short selling prohibited—reduces hedging/pledging risk signals .
Employment Terms
- No employment agreement; severance/change-in-control benefits are through existing plans (ABP, LTPP, LTPEP, SSIP, ORP); CEO ceased ORP accruals at age 60 .
- Non-compete: ORP imposes a 3-year non-compete after termination (not applicable after both termination and a change in control) .
- Change in control definition (ORP/SSIP/LTRP): loss of Harrison Family voting control or sale/merger scenarios (detailed triggers), with lump sum or accelerated installments .
CEO potential payments (assuming event on 12/31/2024)
| Scenario | Total ($) |
|---|---|
| Voluntary resignation / termination without cause | 51,994,511 |
| Termination for cause | 17,890,310 |
| Death | 51,994,511 |
| Disability | 51,994,511 |
| Retirement | 51,994,511 |
| Change in control | 51,994,511 |
Board Governance
- Dual role: Chairman and CEO; Board retains flexibility to separate roles; Lead Independent Director (Dennis A. Wicker) reappointed March 2025 to balance governance (executive sessions, liaison role) .
- Independence: Controlled company under Nasdaq; more than half of the Board is independent; Audit and Compensation Committees entirely independent .
- Committees: Harrison chairs Executive Committee; other committees include Audit (Chair: James H. Morgan) and Compensation (Chair: Dennis A. Wicker) .
- Attendance: Board met five times in 2024; all incumbents attended ≥75% of meetings; 11 of 12 attended 2024 annual meeting .
- Executive sessions: independent directors meet at least twice annually .
- Director compensation: Employee directors (Harrison, Katz, Everett) receive no director fees .
- Clawback: Incentive-Based Compensation Recovery Policy effective Aug 1, 2023 (Section 10D, Nasdaq 5608) .
Director Service, Roles, and Dual-role Implications
- Harrison has served on the Board since 1986; CEO since 1994; Chairman since 1996; controlling stockholder status informs governance structure .
- Dual role considerations: Lead Independent Director structure and independent committees mitigate concentration of power; still a controlled company—stockholder rights shaped by Class B voting power .
Compensation Committee Analysis
- Committee uses Korn Ferry peer review (2024) covering 13 food/beverage peers (e.g., Keurig Dr Pepper, Molson Coors, Monster); aims for compensation within 50th–75th percentile while emphasizing retention and succession .
- Program balances fixed pay, short-term, and long-term performance awards; CEO’s long-term equity plan can settle in cash or Class B stock at CEO’s election .
Related Party Transactions and Red Flags
- Headquarters lease with Beacon Investment Corporation (majority owned by Harrison; minority owned by Everett): $4.0 million total payments in 2024; principal outstanding $19.3 million; approved by Audit Committee and special committee .
- Family compensation: Everett (Vice Chair) total compensation $1,990,197 (2024); Glenn (son-in-law) $690,339; Compensation Committee reviewed and approved; Harrison has no financial interest in their employment relationships .
- Stock rights and restrictions agreement with The Coca-Cola Company updated May 6, 2024—governance rights include board designee, preemptive/registration rights, and exchange option to preserve Harrison Family control .
- Insider policy prohibits hedging and short selling; prohibits margin pledging for directors/officers .
- Pay ratio disclosure: CEO total compensation $19,033,392; median employee $58,839; ratio 323:1 .
Director Compensation (context for governance quality)
| Element | Amount |
|---|---|
| Base Annual Retainer | $190,000 |
| Audit Chair Retainer | $20,000 |
| Compensation Chair Retainer | $15,000 |
| Lead Independent Director Retainer | $20,000 |
| Committee Meeting Fee | $1,600 per meeting |
Performance & Track Record
- 2021–2024 milestones: income from operations up from $439.2m to $920.4m; regular quarterly dividend increased (to $2.50), two special dividends (~$180m), ~$950m capital investments in automated distribution centers/facilities/fleet, contributing to >2x share price increase over the period .
- Significant capital allocation: Dutch auction, open market repurchases, structured repurchase from CCCBI; detailed non-GAAP FCF adjustments reflect large capital and shareholder returns .
Equity Ownership & Alignment (detailed balances)
| Plan/Asset | 2024 Activity/Balance |
|---|---|
| SSIP earnings | $2,311,683 aggregate earnings; balance $17,890,310; above-market interest portion $45,756 |
| ORP estimated annual benefit | $1,624,991 annually for 15 years at retirement (already fully accrued) |
| LTPEP shares availability | 300,000 Class B shares reserved for plan awards; subject to anti-dilution adjustments from stock split |
Employment & Contracts (key terms)
- Severance and CIC: Pro-rata ABP bonus for disability/retirement/death; pro-rata target under CIC; LT plans pro-rata based on completed portion; SSIP/LTRP vesting accelerated under CIC .
- Non-compete: 3 years post-termination under ORP (except after both termination and CIC) .
Investment Implications
- Alignment: Harrison’s 72.2% voting power via Class B creates strong strategic continuity; policy bans on hedging/short selling/margin pledging reduce misalignment risk; large SSIP/ORP balances suggest retention with minimal near-term selling pressure (historically elected cash settlement for LTPEP) .
- Pay-for-performance: Robust linkage to EBIT, FCF, and EBIT margin; 2024 ABP paid at high factors on profitability and cash generation; LTPEP historically at 150% with cash election—signals confidence in operational performance without equity distribution dilution .
- Governance: Controlled company with dual CEO/Chair; Lead Independent Director and independent Audit/Compensation Committees mitigate concentration risk; related party HQ lease is a structural governance watchpoint but was committee-approved .
- Trading signals: No disclosed hedging or pledging; LTPEP settlement flexibility and significant cash-based awards limit forced equity sales; watch capital allocation moves (repurchases/special dividends) and stock split effects on liquidity and retail participation .
Note: All data cited above is drawn from Coca-Cola Consolidated’s 2025 DEF 14A and accompanying tables; non-GAAP adjustments and ABP/LTPP definitions/reconciliations are in Appendix A .