Coca-Cola Revises Executive-Equity Plan On Investor Pressure

(RTTNews) - Beverages giant Coca-Cola Co. (KO), Wednesday announced changes to its compensation plan for executives, after being termed as excessive by investors including Warren Buffet.

Coca-Cola said under the new guidelines fewer shares will be issued to management each year, transparency about equity plan will be provided, will formalize the company's existing practice of share repurchases to minimize dilution and replace equity awards with cash bonuses for lower-level executives.

"Shareowner input on this important topic has directly led to the development of these new Guidelines, which are in line with the long-term interests of shareowners," said Maria Elena Lagomasino, Chair of the Company's Compensation Committee.

Some shareholders had voiced their concern regarding the Atlanta-based beverage giant's executive-compensation plan approved in April. The investors indicated the executive equity plans as excessive and were diluting the stock unnecessarily, amidst some weak financial performance due to weak soda sales in the US and international markets.

Coca-Cola investor Wintergreen Advisers LLC had criticized the company's equity plan openly. Warren Buffett, Coca-Cola's largest shareholder, had also criticized the company for the excessive pay packages. However, in April, Buffet's Berkshire Hathaway had abstained from voting against the equity plan program.

In April, Wintergreen had claimed that the equity plan of issuing of 340 million new shares and options over four years to executives would dilute shareholders by up to 16.6 percent. Wintergreen had also send a letter to Warren Buffet voicing strong disapproval of Coca-Cola's equity plan. Warren Buffet's Berkshire Hathaway is the biggest shareholder of Coca-Cola with 9 percent stake.

Chief Executive Muhtar Kent said, "Further to the approval of the 2014 Equity Plan in April of this year, we have developed Guidelines that further align compensation to the long-term interests of shareowners. We will continue to provide long-term incentive awards to a broad-based group of employees with performance metrics that drive line-of-sight accountability directly to business results."

KO is currently trading at $42.56, down $0.10 or 0.23%, on the NYSE.