Coca-Cola is expected to give in to pressure from its biggest shareholder, Warren Buffett, and revise its controversial equity compensation plan for executives.
Mr Buffett’s Berkshire Hathaway, which owns 9.1 per cent of Coca-Cola’s shares, actually abstained in a recent shareholders’ vote on the compensation plan, which was approved by 83 per cent of votes cast. But privately Mr Buffett has been successful in agitating against the options plan after conversations with Coca-Cola’s chief executive, Muhtar Kent, according to The Wall Street Journal.
Another Coca-Cola shareholder, David Winters, has argued that the equity compensation plan, including the issuing of about 340 million new shares and options over four years, could dilute shareholders by up to 16.6 per cent. Coca-Cola disputes Mr Winters’ figures.
Possible revisions to the plan could involve awarding fewer options per executive each year, having a longer vesting period for options, or changing the mix of stock options and “performance units” in the plan.