Warren Buffett won’t 'go to war' with Coca-Cola
The annual meeting, known as the ‘Woodstock for Capitalists’ was held in Omaha, Nebraska from May 4-5, and attendees grilled Buffett on his decision not to vote on restricting compensation packages for top executives at the beverage company. Berkshire Hathaway owns 9.1 percent of Coca-Cola making it the largest single stockholder.
Buffett reaffirmed he thought the plan, which includes long term equity awards and issuing 340 million new shares and options over the next for years, was too much.
"We made a very clear statement about the excessiveness of the plan and, at the same time, we in no way went to war with Coca-Cola," Buffett said. "I don't think going to war is a very good idea in most situations."
Berkshire chose not to vote because they didn’t want to act directly in defiance of Coke’s management. Buffett has been putting pressure on Coca-Cola to cut back on its excessive salary plan, which will bump executives’ pay starting 2015.
The plan, which Buffett denounced as a "lottery" giveaway, included long-term equity awards as well 340 million new shares and options over four years.
Previously Buffett said the plan wasn’t completely "out of whack" as quality executive performance is very valuable to a company.
Buffett, the world’s third-richest man, with a personal fortune estimated at $65.5 billion, said he talked with Coke’s president and CEO, Muhtar Kent at the investor meeting. Buffett has spoken out against the ‘excessive’ compensation scheme for top executives, but believes the decision for Berkshire to abstain from voting sends and even clearer message.
In the US, pay inequality between employees and top bosses has increased dramatically. In 2012, CEO’s of the S&P 500 companies were on average paid 354 times more than their workers.