The company that to research was Coca Cola Corporation. There is no specific reason
why I chose this company. There are federal laws that require clear understanding about
how compensation is paid to CEO’s. In today’s economy, the corporate executives often
are paid bason on how the companies that the lead perform: things like revenue and
profits. (SEC Emblem, 2021.) I was able to assess the annual proxy statement for CEO,
James Quincey. His annual salary for 2022 is $1.575 million. In the year of 2021, James
made $24.5 million in total compensation. This information is a combination o f base pay
and bonuses. He had $1.6 million learned as salary and $6.4 million was earned as a
bonus. There were stock options that were received and awarded that totaled $16.4
million. There were additional types of compensation that was around $117,000. (S. built
by: Gensler, 2021) These other compensations are awards that do not have any change
with the value of the earnings. The earnings that James Quincey continues to make every
year is 100 times the average blue-collar employee. (Erier., 2022).
b b b By awarding stocks, companies provide het shareholders with apart of ownership
in the company. This is from the executive’s personal incentive that betters the
company’s performance. The hard work that James invests into the company, the higher
stock prices that allow him to have cash. It’s a direct relationship between the value of the
aware and the performance of company’s stock price. CEO’s can take advantage of voting
rights and dividends when having stock ownership on the business. There are stock
options that offer CEO’s lucrative benefits. The main disadvantage of stock options is that
the profit per share is reduced from exiting shares. Shareholders are not a huge fan when
this happens which ends up driving the price of individual shares downwards. When
executives have a large portion of compensation in stock, they tend to take extravagant
risks.
b b b When thinking about audit procedures, ones of the main procedures that I feel is
important is performing risk assessment procedure. This is when an auditor would
perform a risk assessment on identifying whether the material that is presented is a
misstatement due to error of fraud. The auditor is required to identify and ascertain the
amount of risk involved and accordingly develop an audit plan. This is a detailed plan that
provide audit evidence. (J, P., 2022.). It is important to understand the company’s
environment, including the nature of the company and external factors. The company
might have a significant effect on risk material misstatement. Aside from the external
factors, the internal controls regarding financial reporting that identify potential
misstatements. There are policies and actions that management will have concerns about
the company’s control environment. Overall, the auditor will need to evaluate risk factors
as well as misstatements that are presented by the company. b
b b b
Sources:
Salary.com, S. built by: (n.d.). Compensation information for James Quincey, chairman
of the Board and chief executive officer of Coca-Cola Co. Salary.com. Retrieved
September 29, 2022, from https://www1.salary.com/James-Quincey-Salary-Bonus-
Stock-Options-for-COCA-COLA-CO.html
Statement. SEC Emblem. (2021, October 14). Retrieved September 29, 2022, from
https://www.sec.gov/news/public-statement/gensler-clawbacks-2021-10-14
Institute, E. R. I. E. R. (n.d.). Blue Collar Worker salary the United States. Salary Expert.
Retrieved September 29, 2022, from https://www.salaryexpert.com/salary/job/blue-
collar-worker/united-states
Jain, P. (2022, June 18). Audit procedures. WallStreetMojo. Retrieved September 29,
2022, from https://www.wallstreetmojo.com/audit-procedures/
