In 2006, the Coca-Cola Company announced a major change in company policy regarding the compensation of its board of directors. Under the new director compensation

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In 2006, the Coca-Cola Company announced a major change in company policy regarding the compensation of its board of directors. Under the new director compensation plan, nonexecutive directors would be paid an annual director’s fee of \($175,000\) only if the soft drink company met its target of eight percent compounded annual earnings growth over a three-year period. If the target was missed, directors would receive nothing. Coca-Cola director Warren Buffett hailed the program as “pioneering,” noting that the new policy would align the interests of the board of directors and Coke’s shareholders more closely than in any other large company. Discuss whether you think Coke’s new director compensation scheme will achieve its intended goal.