US: Coca-Cola Co responds as Buffett abstains on exec pay vote
The Coca-Cola saw its pay plan voted through by shareholders yesterday, despite some concerns
The Coca-Cola Co has spoken out after its biggest shareholder, Warren Buffett, branded the group's new executive pay plan as “excessive”.
At the group's annual meeting in Atlanta yesterday (23 April), 83% of shareholders voted in favour of the equity plan, which laid out how much will be awarded in shares to around 6,400 Coca-Cola employees on a performance-related basis. However, Buffett's Berkshire Hathaway, Coke's biggest shareholder with a 9.1% stake, abstained from the vote.
Buffett told CNBC in an interview yesterday: “We abstained because we didn't agree with the plan. We thought it was excessive.”
He added: “The plan compared to past plans was a significant change.”
Investor David Winters had led a campaign against the equity scheme, arguing it was an “outrageous grab” by Coca-Cola's management, which would create a gap between how much goes to the company's shareholders and the amount that its top employees recieve.
However, in a statement sent to just-drinks today (24 April), Coca-Cola's board of directors said: "The company’s compensation programmes are performance-based and the equity plan is fair, competitive and consistent with shareowners’ interests and our pay for performance philosophy.
“The Coca-Cola Co board respects Mr Buffett’s philosophical stance on equity-based compensation. As our largest shareowner, Mr Buffett is an avid supporter of the company and its management team, and has been a wonderful counselor through the years.
"We greatly respect his views and look forward to continuing our productive relationship with him for many years to come.”
Last week, Coca-Cola reported dipping sales and profits for the first three months of 2014.
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