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).
c c c c 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.
c c c c 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.
c c c c
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/
