Coca-Cola, bowing to pressure, amends employee equity plan

Wed Oct 1, 2014 4:57pm EDT
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By Devika Krishna Kumar and Anjali Athavaley

(Reuters) - Coca-Cola Co, facing criticism from Warren Buffett and other investors for its outsized employee share rewards, said it had adopted new guidelines that would limit its stock compensation plan and improve transparency.

The company said its new guidelines would extend the number of years award shares will last, formalize its practice of share repurchases to minimize dilution and renew commitments to open dialogue with shareholders on compensation matters.

About 83.16 percent of shareholders voted for the company's 2014 equity plan when it came up for renewal in April, according to a Coca-Cola filing following the company's annual meeting.

However, the approval figure included a significant number of shareholders who had abstained from the vote, according to Reuters calculations.

Buffett, whose Berkshire Hathaway Inc holds 9.1 percent of Coca-Cola and is the company's biggest shareholder, was among those who abstained.

The billionaire said in an interview with Bloomberg that while he considered the plan to be "excessive" he did not vote against it out of loyalty to the company.

But it has been Wintergreen Advisers, which owns less than 1 percent of Coca-Cola on behalf of clients, which has been the most vocal critic of the company's equity plan, saying it greatly diluted the holdings of current shareholders.   Continued...

A bottle of Coca-Cola is shown in this photo illustration in Encinitas, California October 10, 2013. REUTERS/Mike Blake