US: Coca-Cola Co responds as Buffett abstains on exec pay vote

The Coca-Cola Co has spoken out after its biggest shareholder, Warren Buffett, branded the group's new executive pay plan as “excessive”. 

//i4.progressivedigitalmedia.com/1/coca-cola-script-logo.jpg

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.

---