From the ridiculous to the sublime…

March 12, 2004

The 3 pages devoted to related party transactions in the proxy filed yesterday by Coca-Cola Enterprises (CCE) was quite an interesting mix: there was everything from millions moving between the company and Coca-Cola Co. (KO) , which owns about 37% of CCE’s stock, to the $115,000 paid last year to utility AGL Resources, whose CEO serves on CCE’s board. Disclosure is a good thing, but there is such a thing as too much information. It’s highly unlikely that most CCE investors need to know (or care) what the company’s gas and electric bill was last year, or about the $210,000 the company paid United Parcel Service (UPS) , just because a UPS board member began serving on CCE’s board in January. Much more interesting was the $775,000 paid to the Chairman of CCE’s Executive Committee, Summerfield Johnston Jr., last year, the bulk of which was for a consulting contract. Johnston is a longtime CCE exec who once served as CEO and continues to receive money for serving as a director, as well as stock options and family health insurance. Also interesting was the nearly $1 million that Summerfield Johnston III will receive over the next 27 months, after resigning from the company as an executive vice president in January. In the proxy, the Teamsters union challenges such lucrative severance agreements and is requesting that other investors have a chance to vote on such deals first.

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