2025 Reunion - CEO Conversation: Tom Gayner & Jennifer Mann, Coca Cola

Please welcome to the stage Managing Executive of Markel Investments and Investor Relations, Tyler Brown.

Welcome to the 2025 Markel Group reunion, and thank you for the trust you place in us. We do not take it lightly. There's a quote I love, and it goes like this: Watch your thoughts, for they become your words. Watch your words, for they become your actions. Watch your actions, for they become your habits. Watch your habits, for they become your character. Watch your character — it becomes your destiny. Now, this sounds like something that Marcus Aurelius or Aristotle or Epictetus might have said, but no — it was a businessman, an owner and operator of a grocery store chain in the 1970s, a one Frank Outlaw.

I wish Frank Outlaw were still alive, because if he were, I think he'd be sitting right here with us as a Markel Group shareholder. I really do. And if he wasn't, well, I'd pay him a call, because I think he'd want to be one. And the reason I think he'd want to be one — and the reason I love that quote — is because to me, it reads like a manifesto of the magic of compounding. Embedded in that quote is the idea that something small, like a mere thought, with time and persistence can grow into something profound, like what we become or what we build. People often ask me, what is Markel Group? How does it work? Does it work? And seemingly, at first glance, it's pretty complicated. You've got insurance businesses and construction businesses and manufacturing businesses and consumer businesses, a couple dozen other legal entities, and many moving parts. But take a step back, spend some time with the leaders of the businesses, as all of you are doing here today as participants in the Markel Group reunion experience. Visit some of the businesses, and I think you'll start to notice a more common, pervasive rhythm: steady, intentional, long-term, while never losing a healthy sense of urgency around the need to execute and deliver.

I want to end with a brief story to convey the point. So, not too long ago, Tom and I were down in St. Louis visiting some investors, and we had the opportunity to spend some time with the outgoing CEO of our Havco business, Bruce Bader. That's where Bruce lives, and so we said, let's take Bruce out to dinner. Why don't we spend some time with him, just to listen and to hear his stories and to say thank you. And that night, Bruce shared some stories. First, he shared stories of what it was like to run and lead the Havco business before joining the Markel Group, when the business was under private equity ownership. Then he shared stories of what it was like to lead the Havco business as part of Markel Group. He talked about autonomy and empowerment. He talked about what it was like to serve his customers and his people, who he loved so dearly. He talked about when freed from the relentless pressure of short-term expectations and the next interest bill, something in the business started to change. It was able to breathe. It was able to build. And that's what compounding feels like.

But I don't need to tell all of you that, because you're here today. You get it. Spend some time around the businesses of Markel Group, and something else you'll come to realize is we're all part of a tribe in a way. And you're a part of that tribe. We're part of a tribe who has seen firsthand and up close how the meek and minute, with time, can grow into the strong and enduring. We're Frank Outlaw people. We're Bruce Bader people. And we're compounders. And empowered and emboldened with that insight, the question of what is Markel Group starts to become a little more straightforward to answer. It starts to look a little bit more like a home — a home that houses the likes of Havco and Bruce Bader and our specialty insurance businesses and all of our other businesses. That's the answer. Markel Group is a home designed to relentlessly compound your capital over decades. So, thank you. Thank you for being here. Thank you for being part of our tribe. Thank you for being part of our home. And thank you for joining us collectively and pushing us in our zealous pursuit together. We hope you have a wonderful day.

Please welcome to the stage Tom Gayner, Jennifer Man, and Richard Coglin.

Good morning to all of you, and on behalf of the faculty and staff here at the University of Richmond, welcome. I know many of you have come to our campus a few times before, and many of you, like Jennifer Man, are coming for the first time ever. Welcome. We hope you'll continue to visit the University of Richmond. Tom, thank you for this opportunity to sit on stage with Jennifer. Jennifer, I thought I'd begin with you. You are a native of Atlanta, grew up in Coca-Cola's backyard, but one of your first jobs was with another Georgia institution, Chick-fil-A. When did you join Chick-fil-A? And what do you remember from those days?

Yeah, I think I have to start with a little bit of context. As I was growing up, you couldn't get your first job until you were 14. So, my grandmother was a huge influence on my life. She actually taught me how to clean houses before I was 14. And I didn't know to call it zealous pursuit, but I knew what she demanded in terms of excellence. She would come behind me and tell me, 'You missed a detail. Did you pull every book off the shelf and dust?' So, I learned this work ethic from her. And so, when I turned 14, she said, 'Great. Now you can go get your first job.' I applied at Chick-fil-A. She said, 'When you go in for that interview, I want you to have a mindset of thinking about how if they ask you to clean a toilet, you're going to do it better than anybody. If they ask you to paint the lines in the parking lot, you're going to say, Yes, sir. Yes, ma'am. And go do it with excellence.' And so, she was such a huge encourager of me when I got that job at Chick-fil-A. I brought that attitude into it. I, of course, had to develop my work ethic for myself over time. But it was an amazing experience at a very young age. And this is maybe a theme of my career — I've had people see something in me that maybe I didn't see in myself. The operator I worked for at Chick-fil-A, again at 14, promoted me into a management position at 15. I was the youngest people leader they had ever put in place, which was a little scary because I was managing people that were in their 40s and 50s. And oh my gosh, did I make mistakes. But he took me under his wing. He taught me how to hire and fire. He taught me how to manage back room inventory, how to take a look at the P&L and understand: are we driving enough traffic in? Are we making enough money? Here are our levers to do more. And it was an amazing experience for me. I mean, I've now had a very long career, but when I think back on those experiences, I learned more in my six years at Chick-fil-A than probably any other job I've had so far.

I saw a former executive of Chick-fil-A speak here in town just several months ago, and he described a conversation he had with an operator decades ago. It was an operator in Georgia, as a matter of fact, and he said to the operator, 'What is this business all about, in your view?' And he said, 'I'm running a training academy for 16 to 18 year olds.' You sense that right away.

Absolutely.

And it provided great grounding. And in the 10 years since then, she's accomplished so much. It's a rich story that we're going to bring to life together. You studied accounting — good, good move, right, Tom? Great. Yeah. Georgia State, you're an accounting major. You come out in '97. I think you take a position with the Coca-Cola company. First job with Coke was what?

First job was in operations. You look at Coca-Cola and you say, 'What's complicated about this?' And then you join the company and you go, 'Oh my gosh, we do so many things and we play a role and we have bottling partners.' Frank Harrison, who is one of my best supporters and sponsors, is somewhere out here — Frank? But people look at our business at Coke and think, 'What's the problem? You're just putting the liquid into the bottle.' But it's a lot more than that. So I started in operations, which for me gave me a great view into the detail of the business — how do we call on customers? How do we serve customers, again with that mindset of excellence? So I rotated about for the first 10 years through a lot of different jobs in North America and got to see a lot of different viewpoints, which I also appreciated.

Eventually, you're going to take on a position in Global Ventures, which is really about Costa Coffee and the investment in Monster Beverages. That leap from North America to global — what was that like for you? What did you learn through exposure to those brands?

Yeah, it was really interesting. When you live in a big organization, a global organization with big brands like Coca-Cola, and then you take on a smaller set of companies who need a different set of capabilities at the time — I had four businesses, 170 countries, but they were all much smaller and they needed to be developed. And it was really a great leadership challenge for me to think about how do I come in and out of the Coca-Cola company and get the resources and expertise I need and bring it back to these smaller organizations, but also don't kill them and don't let their individual cultures get killed in the process. And so it was a really interesting leadership challenge. Those businesses have now grown. We've just embedded them back into the operating units. But it was kind of a protect, but also learn how to navigate smaller things inside of the big thing without getting killed.

Tom, in some ways this resembles what goes on at Ventures within Markel. You've served as a board member now at Coca-Cola since 2023. When you think about big brands and small brands, there must be some parallels in your mind between Markel Group, the insurance business, and then the ventures businesses.

Jennifer, before we get to the position that you took on in 2015, I want to pull on this theme of zealous pursuit. If one were to look at your career at Coca-Cola, there's a promotion every two years, pretty much from '97 to 2015. Were you zealously pursuing more responsibilities during that period? What was your mindset about the job that you occupied and the next one?

Yeah, I think that again because I had had some good experiences early, I created a repeatable model that I used for every position I took. And what I would do is, when I started in operations or when I started in customer-facing roles, I would learn as much as I could about every facet of the job I had. The second thing I would do is create capacity. How can I get my work done fast and create capacity to then go to my boss and say, 'What can I take off your plate? How can I help you be successful?' And there's always more work than we can get to. And those two steps, repeating over and over, job after job, really became for me a very unique experience where people said, 'Gosh, I know I gave her this job, but she took on more, and she can take on more.' And it just became a self-fulfilling prophecy for me. And the second thing I did was I tried to — and I'm nowhere near perfect — but I try to use a mental model of what is my personal brand. And I've always wanted to be somebody that got great results in a way that people wanted to work with me again, whether that was for me, my peers, or people wanting me to work for them. And I use that filter in every conversation to try to use it as my true north of being a positive influence on people. But it's not about — there's a lot of nice people who can't get things done, and there's a lot of people who get a lot done and you never want to work with them again. And so it was that idea of, I'm not going to leave dead bodies in my wake. I'm going to be a positive influence, but I'm going to get to good results, and then I want my brand to be something that people say, 'Gosh, I really want to work with her again.'

Creating capacity — is that mostly about saying no to certain things? How do you create capacity?

Yeah, I think again early on in my career, I got to the concept that you're never going to finish the to-do list. So, it's not any longer about getting it all done. It's about doing the right things. And then also the concept of: am I doing the things that really only I should do, and I'm delegating almost everything else? And that's very hard, especially as you come up — if you haven't led people yet, you come up with your value is what you got accomplished. Figuring out how to influence and get work done through others — it's such a skill that you have to — I mean, I'm still working on it. But it's a muscle that you have to build as a leader, and you have to say no to a lot. That's for sure.

So it now makes sense why after a bunch of operational roles, a few customer-facing roles, in 2015 you become Chief of Staff to James Quincey, who at the time was President and COO, now CEO. That Chief of Staff role eventually led you to being named Chief People Officer at Coca-Cola. This would have been a huge departure from the kinds of roles that you'd had, and the culture of the company was what at the time that you were invited to become Chief People Officer?

Well, I think maybe a little context would help. When James and I started working together in 2015, really the board and our CEO at the time, Muhtar Kent, had told James, 'You've got to have somebody who can help you navigate both the US dynamics and the corporate headquarters,' because he had never worked in either. So when we came together, it was really about how can I help him navigate coming out from the field into the headquarters. He and I spent the first year working on what's his chapter, what is his strategy going to be for the corporation as he goes from COO to CEO. And we focused our first year on launching what we ended up calling the total beverage strategy. Meaning, yes, we love Brand Coke, and it will always be the most cherished brand in our portfolio, but none of us are drinking eight Cokes a day. I mean, James and I looked at our — we're not having eight Cokes a day. So, if we have a breakfast program and we're telling everybody, well, the best thing to go with that is Coke, we're missing opportunities. People might want to have a juice or a coffee or a water or tea. And so the total beverage strategy was really about: it's going to be Coke and what consumers want, and how are we going to provide choices, and recognizing it was going to take a lot of new capabilities for us to get into some of these newer categories like coffee and tea, etc., for the future. So that was the first year.

Then, to your question, we sat and said, 'Well, wait a minute — this isn't a new idea. We've been trying to get into more of these adjacent categories for a long time. What has prevented us?' And that was the culture. So we spent the second year working on a real bottoms-up: what were we hearing from the organization were the barriers? And we picked a couple of areas that we said, if we just focus on these three or four things for the next three years, we think we can start to make a change in our culture. And the culture at the time was mostly: the boss had all the answers. So your people — they didn't need to think, they just needed to do what you told them to do. That's really dangerous in a very large organization. It was also a culture of leaders not being very accessible. People used to come up through a private elevator entrance, eat in the executive dining room, be protected by lots of people outside their corner office. And so we started to just try to break down those kind of things. And then on the business side, we had years and years and years of experience of doing big pieces of research on a new brand and thinking about a mass launch across all of our markets at once. And we were failing more than we should. And we said, we're going to stop doing it that way. We're going to think about progress over perfection. We're going to think about starting things small, finding how they work, and then scaling them big. And so it was a journey to get there. This was not an attempt to put the poster on the wall of what we're going to do around culture, but we embedded it in our hiring practices, our performance review practices, and we made those elements something that we said, we're looking for these behaviors, and we're going to reward those people that deliver on those behaviors.

When you start messing with compensation, you're really getting into potential messes, but you went ahead and did that because you thought it was necessary.

Yes, I did. I mean, again, all of these things for me were a sequence of: we've set what strategy we want, we've said we have some behaviors to work on, now we got to complete the play with how we reward people. And our board was more conservative at that point, Tom, than you all are today. And they were really nervous about making a global change to compensation. But again, this journey of we're coming from a feeling of more family to a high-performing team — and the family, you don't get rid of people, and the high-performing team, you're starting to say, I am demanding excellence. I am asking for you to cycle yourself and have better results this year than you had last year. So we went through a process to reset all of our elements. We took base pay and said it's going to be based on the market for your job. We said your annual incentive, which is a cash payout, is going to be based on your one-year contribution, and it's going to be on a scale — so it's all relative to how everybody else did. And then we're going to take your long-term incentive and we're going to make it based on our projected view of your capacity to grow. And we brought in a third party and we did some serious assessments of people to have a data-driven approach. And all of that's scary, because again we were coming from — it felt better to say everybody was a good performer than to really have to differentiate performance.

And when I think about businesses that are of significant size but have maintained their family feel, I think about the Markel Group. Tom, as Jennifer's talking about this tension — potential tension that exists between maintaining a family feel and achieving high performance — some of this must resonate with you, especially given the growth over the last decade or so at Markel.

Thinking about the importance of actions to back up some of the words, I'm recalling an internship I had at the Marriott headquarters in 1986, and I watched Bill Marriott push his tray through the cafeteria line, thinking he was heading to some executive dining room, and he wasn't. He was just going to sit among eight or 10 employees. James Quincey made a decision in his first leadership meeting about what he was going to wear and what he was going to drink. I suspect you might have had an influence on that. What did James wear and what did he drink?

He decided out of the gates that he was going to start wearing blue jeans and a white button-down. Not on Fridays — every day. And well, first of all, the suit companies in Atlanta called me and said, 'What are you doing? You are killing our business.' Because what happened is James started wearing jeans and a white button-down. So did everybody. Every other man in the Coca-Cola company started wearing the same outfit. So the suit companies were like, 'You're just absolutely killing our business.' But he did that, and he had a backpack, and he wore some funky bracelets, and all these little things said to people, 'It's going to be different now. It's not going to be so formal. This leader is going to be accessible. This is somebody I can talk to.' And I know it can sound crazy, but it is the small things that people noticed at the beginning. And he also said at our first town hall, 'Coke doesn't have to be your favorite beverage in our portfolio. It's okay to like Topo Chico. It's okay to like Fairlife Milk. It's okay to like Sprite.' And again, these small things went a very long way in defining what's now been a 10-year run for him as leader of our organization.

And in the middle of that run, heading into the pandemic, Coca-Cola had 400 brands — 400 brands aiming to manage. And a decision — you all made a decision to cull that down to 200. Some of the ones you got rid of at the time would have been Tab, Odwalla, and a whole bunch of others. This idea of zealous pursuit but with discipline, zealous pursuit but with focus, really came to life in the decision to go from 400 brands to 200 brands in the midst of the pandemic. Can you describe some of the process there, and maybe some of the angst around getting rid of brands that I guess you'd call those zombie brands?

Yeah, I mean, it looks practical on paper, but when you take a brand that is, you know, in Turkey and it's somebody at a region level — like it's a big part of their portfolio — you're taking away people's things. It's very hard. It was a very emotional process. But we did cut our brands in half. And what we used as a discipline process was: where do we make the money? Where do we make the money? Secondly, how many of these more local regional brands do we think have potential to scale? And recognizing we can't be everything to everybody — we're going to have to make some tough choices. Obviously, at the beginning of the pandemic, none of us knew how long is this going to last, but we need to be creating reserves of time — our people's time, our dollars — and the smallest brands and the largest brands. You'd be...

I'm surprised there's not that much difference in how much work you have to do. Somebody's looking for a new formula. Somebody's looking for a new set of graphics. Somebody's looking for a marketing campaign. So, we went through a pretty disciplined process. It was very emotional. It took us a couple of years to get everybody to unleash the last few of those in the process. But then I think the other thing is we're also looking back now and saying where did we make mistakes in that? And we were laughing ahead of time because there is an entire organization dedicated to bringing back Tab. They have an association. They write me at least 10 letters a week, handwritten multi-page notes about this brand. The last one I got two weeks ago said, 'I'm down to my last case. What am I going to do? You got to help me.' So you know we are also reflecting on did we make some mistakes in some areas and how might we want to tap into the passion of some of our consumers.