Coca-Cola, the world's largest soft drinks maker, will for the first time pay its directors based on the company's performance, eliminating extra fees for serving on the board and its committees.

The move forms part of the Atlanta-based company's efforts to shake off criticism of its corporate governance and align the interests of board members with shareholders. Under the new system, which will come into effect this year, board members will receive payment for their services only if the company meets certain performance targets over a three-year period.

Coca-Cola, whose board members include billionaire Warren Buffett and media tycoon Barry Diller, said directors would receive share units each year equal to a flat fee of $175,000. If the company meets a goal of 8% compounded annual earnings growth over the next three years, the units would be payable in cash.

However, if the firm misses its target in any three-year period, directors will receive nothing for that year when the equity-share units would have matured.