Coca-Cola Trims Stock Compensation Plan After Criticism

Oct. 1 (Bloomberg) -- Coca-Cola Co., whose employee stock-compensation plan was called excessive by billionaire Warren Buffett and other investors, agreed to rein in the program.
Fewer shares will be issued to employees, and more transparency will be provided into how the program works, the Atlanta-based company said today in a statement. The number of shares granted will be no more than 0.8 percent of total outstanding stock in 2015 and an average of 0.4 percent for the remainder of the plan.
Coca-Cola investor Wintergreen Advisers LLC, run by David Winters, railed against the compensation plan this year, calling it a “raw deal” for shareholders that was too generous and diluted the stock. Buffett, Coca-Cola’s largest shareholder, also spoke out against the program, though only after the plan passed. He abstained from voting on it at Coca-Cola’s annual meeting in April.
“By approving the equity plan in April, our shareowners authorized the compensation committee to manage something precious –- shares of the Coca-Cola company,” Maria Elena Lagomasino, chairman of Coca-Cola’s compensation committee, wrote in a letter to shareholders today. “The existing equity plan was designed to provide significant flexibility in how and to whom long-term equity awards are made. These guidelines are designed to be clear and simple, driven by our desire to enhance transparency with our shareowners.”
Board ‘Backtracking’
Winters said the move was an admission by Coca-Cola that the stock-compensation program was “outrageously excessive and inconsistent with past plans.” The beverage company still needs to do more to restore the trust of investors, he said.
“No amount of backtracking by the Coca-Cola board of directors can hide the fact that we believe it tried to sneak one by shareholders in Coca-Cola’s proxy materials