Coke’s General Counsel Resigns Amid Probe

Deval Patrick, Coca-Cola Co.’s general counsel for the last three years, resigned as federal authorities investigate whether the company artificially boosted sales to meet earnings goals.

Chairman and Chief Executive Douglas Daft said in a memo to employees Sunday that Patrick, 47, was leaving. Coca-Cola directors have criticized Patrick’s handling of probes by the Securities and Exchange Commission and federal prosecutors into whether the company inflated profit by shipping excessive soft-drink syrup to bottlers in Japan.

Patrick’s departure is part of a house cleaning that’s needed to revive sales growth at Coca-Cola, the world’s largest soft-drink maker, analysts and investors said. Board member Warren Buffett is leading a search for a successor to Daft, who plans to retire at year’s end.

“Coca-Cola has not been on a satisfying trajectory,” said Henry Asher, president of New York-based Northstar Group Inc., which holds Coke stock. “Coke needs to reach beyond the pool that it has drawn from. The management changes at the operating entities are more important than the in-house lawyer.”

Executives who have left since Daft was appointed in February 2000 include former President Jack Stahl, who heads Revlon Inc.; Jeff Dunn, who headed North American operations; Tom Moore, president of its soda-fountain business; and Stephen Jones, formerly its top marketing officer.

Geoff Kelly, 59, a 34-year Coca-Cola veteran and chief deputy counsel, was named as interim general counsel, Daft said in the memo.

Spokesman Ben Deutsch declined to comment beyond confirming the memo.

Shares of Coca-Cola fell 39 cents to $50.85 on the New York Stock Exchange.

Investors are concerned about the investigations, an average sales growth of only 2.3% the last five years, the recall of drinks in Europe and a lack of successful new products in key markets such as the U.S. and Japan.

Proxy advisor Institutional Shareholder Services recommended that investors withhold their votes to reelect billionaire Buffett as a director because of his Berkshire Hathaway Inc.’s financial ties to the company.

On Friday, Coca-Cola said Buffett met the New York Stock Exchange standards for independent directors. As the company’s largest shareholder, Buffett’s interests are aligned with all investors, the company said.