Coca-Cola to revise executive pay plan
NEW YORK (AP) — Coca-Cola is revising its pay plan for executives after shareholders including Warren Buffett called it excessive.
The world's largest beverage maker says its long-term incentive program will now distribute the company's shares to a smaller group of executives, while the rest will be rewarded with cash instead. That will mean the total shares authorized to be awarded under the plan will last longer.
The Atlanta-based company also said it would increase transparency about its stock and option awards and formalize its practice of share repurchases to keep stockholders' stakes from being diluted.
Coca-Cola's pay plan came under scrutiny earlier this year after Wintergreen Advisers called it a "raw deal" for shareholders, particularly in light of the company's slowing growth. Wintergreen CEO Dave Winters had said the company's equity plan would transfer roughly $13 billion to management over the next four years.
Buffett, whose Berkshire Hathaway is Coke's biggest shareholder, has been a longtime critic of excessive pay packages. But he said Berkshire Hathaway didn't vote against the plan at Coca-Cola's annual meeting in April because he didn't want to publicly express disapproval of the company's management.
Afterward, however, Buffett said he discussed his concerns about the pay plan with Coca-Cola CEO Muhtar Kent.
Last year, Kent was given a pay package worth $18.2 million, according to an Associated Press calculation. That was down 16 percent from the previous year because Coca-Cola failed to meet its own growth targets.