Coca-Cola Amatil Ltd boss departs, but is it a buy?

Group managing director Terry Davis left his post with iconic bottler Coca-Cola Amatil Ltd (ASX: CCL) on Monday, to make way for incoming CEO Alison Watkins, former boss of grain-handler Graincorp Ltd (ASX: GNC).

Having spent 12 successful years at the helm, Davis certainly didn’t walk away from the transition empty handed. He received a generous $2.9 million cash payout on his short and long-term incentive packages while he will also receive $450,000 in non-compete payouts.

The non-compete payout will be spread over three years ($150,000 annually), which will stop him from being able to join forces with any other local food and beverage business until at least 2017. It also effectively ends recent speculation that he may look to take up a position at Treasury Wine Estates Ltd (ASX: TSE) as a board member, while it remains unlikely that he will move towards Woolworths Limited (ASX: WOW) or Coles, owned by Wesfarmers Ltd (ASX: WES).

The company also stated that he will continue to work out his notice period until the end of August, where he will remain available to assist Watkins with advice and special projects as required.

While there is always an element of risk involved when a new CEO takes over a company, Watkins has extensive experience in international operations. This will benefit the company no-end as it continues its push into the highly lucrative market that is Indonesia.

Foolish takeaway

Although its brands remain amongst the most popular in the world, the company struggled last year due to mounting pressures from the supermarket chains and key rival Schweppes. While it will be a challenge for Watkins to steady the ship, the task will be made much simpler thanks to the non-compete arrangement.

Coca-Cola is one of Australia’s strongest companies and its shares are trading near a 52-week low at just $11.39, giving you an incredible opportunity to buy shares in a quality company at an attractive price.

The top ASX pick you've never heard of...

Top Motley Fool analysts just identified their #1 ASX pick for 2014, a small-cap stock that could be poised for big gains (and offers a fat, fully franked dividend!). Discover all the details now, including the name and code, in this FREE investment report, "The Motley Fool's Top Stock for 2014."

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.