Coca-Cola

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#11
As per Buffett, when share prices are weak, company can buy back more shares. (See ibm)
So much bearish news, i am adding at $37 and below.....slowly, the great thing with US stocks is shares are not transacted by lots

=================

https://www.youtube.com/watch?v=qYXXHdnOoUg#t=0


The Coca-Cola Company's $8.5 Billion Cash Returns to Shareholders
By Demitrios Kalogeropoulos | More Articles
February 20, 2014 | Comments (0)

Coca-Cola (NYSE: KO ) disappointed some on Wall Street this week when it announced that revenue slipped last quarter as its soda business stayed flat. Still, the company closed out an incredibly strong year financially by booking a near-record $10.5 billion in operating cash flow. That cash boost allowed the beverage giant to return more than $8 billion to shareholders while still investing heavily in the business.
In the video below, Fool contributor Demitrios Kalogeropoulos breaks down Coke's cash returns over the last year, noting that they were tilted slightly toward dividends, with $3.5 billion, or 40%, coming in the form of share repurchases. As for the year ahead, investors can expect those share buybacks to fall slightly while dividend payments increase.

http://www.fool.com/investing/general/20...ns-to.aspx
Reply
#11
As per Buffett, when share prices are weak, company can buy back more shares. (See ibm)
So much bearish news, i am adding at $37 and below.....slowly, the great thing with US stocks is shares are not transacted by lots

=================

https://www.youtube.com/watch?v=qYXXHdnOoUg#t=0


The Coca-Cola Company's $8.5 Billion Cash Returns to Shareholders
By Demitrios Kalogeropoulos | More Articles
February 20, 2014 | Comments (0)

Coca-Cola (NYSE: KO ) disappointed some on Wall Street this week when it announced that revenue slipped last quarter as its soda business stayed flat. Still, the company closed out an incredibly strong year financially by booking a near-record $10.5 billion in operating cash flow. That cash boost allowed the beverage giant to return more than $8 billion to shareholders while still investing heavily in the business.
In the video below, Fool contributor Demitrios Kalogeropoulos breaks down Coke's cash returns over the last year, noting that they were tilted slightly toward dividends, with $3.5 billion, or 40%, coming in the form of share repurchases. As for the year ahead, investors can expect those share buybacks to fall slightly while dividend payments increase.

http://www.fool.com/investing/general/20...ns-to.aspx
Reply
#12
Gurus average price


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#12
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#13
March 24, 2014 6:24 PM
Coca-Cola executive pay plan stirs David Winters’ wrath

Coca-Cola has stumbled into a very public slug-fest with at least one shareholder over its proposed executive pay package.
David Winters, fund manager of Wintergreen Advisers, LLC, unloaded on the soft-drink company after it submitted its 2014 compensation and equity plan, calling it an “outrageous grab” by management that, if approved, would open a big gap between how much of Coke’s profit goes to shareholders and how much goes to Coke’s top officers. Wintergreen Advisers owns about 2.8 million shares in Coca-Cola, according to FactSet.
Winters, known as a value investor who sometimes takes the role of an activist, said in a statement late Friday:

“Wintergreen Advisers, LLC, on behalf of its clients, expresses its deep disappointment with Coca-Cola’s proposed 2014 Equity Plan. As further detailed in the attached letters to the Coca-Cola board of directors and Berkshire Hathaway CEO Warren Buffett, Wintergreen Advisers believes this plan to be an unnecessarily large transfer of wealth from Coca-Cola’s shareholders to members of the Company’s management team.”

He goes on:
“We can find no reasonable basis for gifting management 14.2% of the share capital of Coca-Cola, worth $24 billion at today’s share price. No matter how well a management team performs, it is unfathomable that they would require such astronomical sums of money to provide motivation.
“Twenty-four billion dollars is a lot of money, by anybody’s standard.”

Coke, on the other hand, isn’t backing down. In a note to CNBC, the company had this to say: “The 2014 Equity Plan incorporates a number of ‘best practice’ and shareowner-friendly provisions, such as no re-pricing of stock options, no liberal share counting and ‘double-trigger’ change in control vesting.”

It adds that its long-term compensation program is tied directly to hitting specific business and financial targets. Failure to hit those targets means the proposed awards would not be earned. “This pay-for-performance philosophy has been a consistent cornerstone of the program through the years and remains unchanged.”

The showdown comes on April 23 in Atlanta, when Coca-Cola’s board convenes its annual shareholder meeting.

– Jim Jelter
Follow him on Twitter @jjelter.
Other must-read stories from MarketWatch:
Reply
#13
March 24, 2014 6:24 PM
Coca-Cola executive pay plan stirs David Winters’ wrath

Coca-Cola has stumbled into a very public slug-fest with at least one shareholder over its proposed executive pay package.
David Winters, fund manager of Wintergreen Advisers, LLC, unloaded on the soft-drink company after it submitted its 2014 compensation and equity plan, calling it an “outrageous grab” by management that, if approved, would open a big gap between how much of Coke’s profit goes to shareholders and how much goes to Coke’s top officers. Wintergreen Advisers owns about 2.8 million shares in Coca-Cola, according to FactSet.
Winters, known as a value investor who sometimes takes the role of an activist, said in a statement late Friday:

“Wintergreen Advisers, LLC, on behalf of its clients, expresses its deep disappointment with Coca-Cola’s proposed 2014 Equity Plan. As further detailed in the attached letters to the Coca-Cola board of directors and Berkshire Hathaway CEO Warren Buffett, Wintergreen Advisers believes this plan to be an unnecessarily large transfer of wealth from Coca-Cola’s shareholders to members of the Company’s management team.”

He goes on:
“We can find no reasonable basis for gifting management 14.2% of the share capital of Coca-Cola, worth $24 billion at today’s share price. No matter how well a management team performs, it is unfathomable that they would require such astronomical sums of money to provide motivation.
“Twenty-four billion dollars is a lot of money, by anybody’s standard.”

Coke, on the other hand, isn’t backing down. In a note to CNBC, the company had this to say: “The 2014 Equity Plan incorporates a number of ‘best practice’ and shareowner-friendly provisions, such as no re-pricing of stock options, no liberal share counting and ‘double-trigger’ change in control vesting.”

It adds that its long-term compensation program is tied directly to hitting specific business and financial targets. Failure to hit those targets means the proposed awards would not be earned. “This pay-for-performance philosophy has been a consistent cornerstone of the program through the years and remains unchanged.”

The showdown comes on April 23 in Atlanta, when Coca-Cola’s board convenes its annual shareholder meeting.

– Jim Jelter
Follow him on Twitter @jjelter.
Other must-read stories from MarketWatch:
Reply
#14
http://www.wintergreenadvisers.com

Wintergreen Fund

Select the below link to view fund information, forms, and documents, for our U.S. mutual fund.
www.wintergreenfund.com

Wintergreen Advisers News

4/15/14
Wintergreen Advisers Urges All Investors to Review Coca-Cola’s 2014 Equity Plan Before Voting

4/11/14
David Winters Discussed the Coca-Cola Compensation Plan with Yahoo Finance

4/10/14
Wintergreen Advisers Welcomes Vote by Calvert Investments Against Coca-Cola Equity Plan

4/8/14
Wintergreen: Pleased That the Ontario Teachers' Pension Plan is Voting Against Coca-Cola's 2014 Equity Compensation Plan

4/3/14
David Winters discusses the Coca-Cola equity compensation plan on CNBC

4/2/14
Wintergreen: Coca-Cola’s Equity Compensation Plan is a ‘Big Grab’ by Management

4/2/14
Wintergreen Advisers to Hold Informational Webcast on Coca-Cola’s Equity Compensation Plan

3/27/14
Wintergreen Advisers Urges Coca-Cola Board of Directors to Withdraw Proposed 2014 Equity Compensation Plan

3/24/14
David Winters appeared on Fox Business to discuss his opposition to Coca-Cola’s equity compensation plan

3/21/14
Wintergreen Advisers, LLC Expresses Disappointment with Coca-Cola’s Proposed 2014 Equity Plan

Current Wintergreen Advisers News:

Wintergreen Advisers Urges All Investors to Review
Coca-Cola’s 2014 Equity Plan Before Voting
Fiduciaries should conduct an independent analysis, not rubber-stamp recommendations of proxy advisors

April 15, 2014 07:00 AM Eastern Daylight Time

NEW YORK -- (BUSINESS WIRE) -- As investors prepare to cast their proxy ballots ahead of the Coca-Cola Company (NYSE:KO) annual shareholders’ meeting on April 23, David Winters, CEO of Wintergreen Advisers, today sent the following letter to Coca-Cola’s top 25 institutional shareholders, urging them to carefully review the Coca-Cola 2014 equity plan before they vote.

“Every fiduciary has a responsibility to consider the impact of Coca-Cola’s proposed equity plan,” Mr. Winters said. “Proxy advisers will make recommendations, but ultimately it is up to the fiduciaries or other executives of each institutional investor to vote based on what they think is best for their investors. I urge these executives not to outsource their fiduciary responsibility: Read the plan, read our analysis and reach your own conclusions.”

The letter is being sent to the following individuals, listed in order of share ownership in The Coca-Cola Company, are:

Warren E. Buffett, CEO, Berkshire Hathaway (NYSE: BRK.B)
F. William McNabb III, Chairman & CEO, Vanguard
Laurence D. Fink, Chairman & CEO, BlackRock (NYSE: BLK)
Joseph L. Hooley, President & CEO, State Street Corporation (NYSE: STT)
Edward Johnson III, Chairman & CEO, Fidelity Investments
James Rothenberg, Chairman, Capital Group
Frederick H. Waddell, Chairman & CEO, Northern Trust Co. (NASDAQ: NTRS)
Gerald L. Hassell, Chairman & CEO, Bank of NY Mellon (NYSE: BK)
Donald Yacktman, President, Yacktman Asset Management
Brad Hilsabeck, CEO, Grantham Mayo Van Otterloo
Jeff Raikes, CEO, The Bill & Melinda Gates Foundation
Anshu Jain, Co-CEO, Deutsche Bank (NYSE: DB)
Yngve Slyngstad, CEO, Norges Bank Investment Management
Fayez Sarofim, Chairman, Fayez Sarofim & Co.
Vince Gubitosi, President & Chief Investment Officer, Geode Capital Management
James Dimon, Chairman & CEO, J.P. Morgan Chase (NYSE: JPM)
Brian T. Moynihan, CEO, Bank of America (NYSE: BAC)
Edward B. Rust, Jr. Chairman & CEO, State Farm Mutual Auto Insurance Co.
Richard Rossi, President, Eagle Asset Management
Roger W. Ferguson Jr, President & CEO, TIAA-CREF
Mark Zinkula, CEO, Legal & General Investment Management (LSE: LGEN)
James Kennedy, President & CEO, T Rowe Price Group (NYSE: TROW)
Sergio Ermotti, CEO, UBS AG (NYSE: UBS)
Gregory E. Johnson, Chairman & CEO, Franklin Resources (NYSE: BEN)
Contacts:
Wintergreen Advisers, LLC
David J. Winters
973-263-4500
press@wintergreenadvisers.com

Bryant Park Financial Communications
212-719-7535
Richard Mahony (rmahony@bryantparkfc.com)
Claire Currie (ccurrie@bryantparkfc.com)

Wintergreen Advisers, LLC Letter to Institutional Shareholders of Coca Cola

April 15, 2014

To My Fellow Institutional Shareholders:

At this moment, Coca-Cola shareholders are being asked to approve Coca-Cola’s 2014 Equity Plan, which we believe is deeply flawed and contrary to shareholders’ interests.

Wintergreen Advisers, LLC’s clients own more than 2.5 million shares of Coca-Cola and we have expressed our concerns about the Plan by writing letters to Coca-Cola’s Board of Directors, its largest shareholder, Berkshire Hathaway, and certain other institutional investors. We have also communicated our concerns in our presentation earlier this month.¹

We urge all institutional investors to review Coca-Cola’s proposed plan for themselves before they decide how they will vote.

I am writing today to urge you, the institutional shareholders in Coca-Cola, as fiduciaries for many thousands of individual investors, retirement funds, union and other pension plans to undertake a careful, thorough and independent review of Coca-Cola’s proposed plan before casting your vote.

Existing equity plans at the Coca-Cola Company are more than adequate to meet the Company’s needs. There are 66,948,651 awards remaining under existing Coca-Cola equity plans, enough to last another year at the recent pace of 65 million awards per year.²

It has become a common practice in recent years for institutional investors to rely on the recommendations of proxy advisory firms when voting on shareholder matters, the largest being Institutional Shareholder Services (“ISS”). Following these recommendations to award shares as part of a new Coca-Cola equity plan without performing your own due diligence would, in our view, be a disservice to the investors that you represent and serve.

We believe the methodology described in the ISS publicly available proxy guidelines understates the true cost to shareholders of Coca-Cola’s equity plan.

The ISS proxy-voting guidelines state that ISS, while reviewing each plan on its own merits, will generally vote against plans in which the total cost is “unreasonable” and which have a three-year burn rate exceeding the burn rate cap of its industry peers.³

ISS uses what it calls “shareholder value transfer” (SVT) to assess the cost of a plan, and will consider a plan “reasonable” if it does not exceed a threshold ISS calculates based on other companies in the industry.

The use of peer-group comparisons as a fundamental analytical tool carries an embedded bias that can result in increasingly expensive plans. To the extent every board wants to be in the top half or third of its peer group, equity plan costs will continue to rise.

Warren Buffett of Berkshire Hathaway, Coca-Cola’s largest shareholder, has warned against this trend:

“The drill is simple: Three or so directors – not chosen by chance – are bombarded for a few hours before a board meeting with pay statistics that perpetually ratchet upwards. Additionally, the committee is told about new perks that other managers are receiving. In this manner, outlandish “goodies” are showered upon CEOs simply because of a corporate version of the argument we all used when children: “But, Mom, all the other kids have one. When comp committees follow this “logic,” yesterday’s most egregious excess becomes today’s baseline.”⁴

The ISS guidelines support equity plans that have a “burn rate” (a measure of how rapidly shares are issued under the plan) that is within peer-group norms. The guidelines also include a minimum burn rate cap of 2%, which essentially rubber-stamps any equity plan that dilutes shareholders by “only” 2% per year.⁵ Wintergreen believes that 2% annual dilution from management equity awards is excessive for a slow-growth company such as Coca-Cola.

In addition, the level of SVT determined by ISS is an unacceptably high cost for shareholders to bear. For Coca-Cola and others in its sector, ISS sets the acceptable SVT threshold at 9 percent, according to published reports,⁶ which in Wintergreen’s view is an excessively high transfer of shareholder wealth.

There are many different ways of calculating the true cost shareholders pay for equity plans. Investors need to be cognizant of not only the share dilution caused by equity plans, but also the cash cost of repurchasing these shares to offset dilution. There is also the opportunity cost of not using that cash for more productive purposes, such as reinvesting it in the business.

In Coca-Cola’s case, we believe that the company may need to spend $2 billion per year to offset dilution. The failure to use that $2 billion more productively could mean billions of dollars in future earnings will never be realized. Over the past three years, Coca-Cola’s average return on equity has been 27%.⁷ This means that if Coca-Cola retained that annual $2 billion, it could potentially grow earnings by $540 million each year. These are real costs that need to be considered by investors.

Coca-Cola’s 2014 proposed equity plan appears to fall short of publicly available ISS guidelines in a number of areas.

Although the ISS report on Coca-Cola’s 2014 proxy is not available to the public, an analysis of ISS standards as stated on its website suggests the Coca-Cola plan falls short in several important respects

We believe that

The Coca-Cola plan fails to meet the ISS standard for linking pay to performance, because Coca-Cola has lowered its performance targets for management over the past two performance periods. While the targets were modestly raised for the current performance period, they are still below historical levels.⁸
The fact that every named officer at Coca-Cola has received more equity option grants over each of the past two years,⁹ even as Coke’s performance has failed to meet targets, demonstrates that Coke is not properly linking pay to performance.
The proposed plan fails to meet the publicly available ISS standard for investors that manage union pension plans under the Taft-Hartley Act. The proposed equity plan far exceeds the maximum acceptable voting power dilution under ISS Taft-Hartley guidelines of 10% over ten years.¹⁰
The proposed Plan may also fall short of Taft-Hartley guidelines that discourage excessive pay practices because it does not have a cap on the amount of equity that can be awarded to an individual. Prior Coca-Cola equity plans limited the maximum award to any single employee to 5% of the plan.
Coca-Cola’s compensation practices have been given a poor grade by ISS.

Publicly available information from ISS gives Coke’s compensation practices a low ranking.¹¹ On a range of 1 to 10, where 1 is the best and 10 the worst, Coca-Cola earned an 8, close to the bottom of the ISS scale. A detailed evaluation of Coke’s governance policies that lead to this ranking by ISS is available only to ISS customers and Coca-Cola.

It is difficult to see how ISS can give Coke a near-failing grade on its compensation policy yet still recommend to investors that they vote for an equity plan that could produce a windfall for management and huge dilution for owners.

Sincerely,

David J. Winters, CEO
Wintergreen Advisers, LLC



Notes:

The presentation is available at: http://wintergreenadvisers.com/pdf/Winte...040214.pdf
Coca-Cola 2014 proxy statement, page 87.
ISS U.S. Proxy Voting Summary Guidelines, March 2014, page 42.
2005 Berkshire Hathaway annual report
ISS U.S. Proxy Voting Summary Guidelines, March 2014, page 44.
Coca-Cola’s Stock Handouts get New Coke Reaction,” Reuters BreakingViews, April 9, 2014.
Return on equity figure sourced from Bloomberg
See page 57 of the 2014 Coca-Cola proxy statement.
See page 68 of the 2014 Coca-Cola proxy statement, page 71 of the 2013 Coca-Cola proxy statement, and page 61 of the 2012 Coca-Cola proxy statement.
ISS 2014 Taft-Hartley U.S. Proxy Voting Guidelines, page 28.
https://link.issgovernance.com/qs/free/31989
Reply
#14
http://www.wintergreenadvisers.com

Wintergreen Fund

Select the below link to view fund information, forms, and documents, for our U.S. mutual fund.
www.wintergreenfund.com

Wintergreen Advisers News

4/15/14
Wintergreen Advisers Urges All Investors to Review Coca-Cola’s 2014 Equity Plan Before Voting

4/11/14
David Winters Discussed the Coca-Cola Compensation Plan with Yahoo Finance

4/10/14
Wintergreen Advisers Welcomes Vote by Calvert Investments Against Coca-Cola Equity Plan

4/8/14
Wintergreen: Pleased That the Ontario Teachers' Pension Plan is Voting Against Coca-Cola's 2014 Equity Compensation Plan

4/3/14
David Winters discusses the Coca-Cola equity compensation plan on CNBC

4/2/14
Wintergreen: Coca-Cola’s Equity Compensation Plan is a ‘Big Grab’ by Management

4/2/14
Wintergreen Advisers to Hold Informational Webcast on Coca-Cola’s Equity Compensation Plan

3/27/14
Wintergreen Advisers Urges Coca-Cola Board of Directors to Withdraw Proposed 2014 Equity Compensation Plan

3/24/14
David Winters appeared on Fox Business to discuss his opposition to Coca-Cola’s equity compensation plan

3/21/14
Wintergreen Advisers, LLC Expresses Disappointment with Coca-Cola’s Proposed 2014 Equity Plan

Current Wintergreen Advisers News:

Wintergreen Advisers Urges All Investors to Review
Coca-Cola’s 2014 Equity Plan Before Voting
Fiduciaries should conduct an independent analysis, not rubber-stamp recommendations of proxy advisors

April 15, 2014 07:00 AM Eastern Daylight Time

NEW YORK -- (BUSINESS WIRE) -- As investors prepare to cast their proxy ballots ahead of the Coca-Cola Company (NYSE:KO) annual shareholders’ meeting on April 23, David Winters, CEO of Wintergreen Advisers, today sent the following letter to Coca-Cola’s top 25 institutional shareholders, urging them to carefully review the Coca-Cola 2014 equity plan before they vote.

“Every fiduciary has a responsibility to consider the impact of Coca-Cola’s proposed equity plan,” Mr. Winters said. “Proxy advisers will make recommendations, but ultimately it is up to the fiduciaries or other executives of each institutional investor to vote based on what they think is best for their investors. I urge these executives not to outsource their fiduciary responsibility: Read the plan, read our analysis and reach your own conclusions.”

The letter is being sent to the following individuals, listed in order of share ownership in The Coca-Cola Company, are:

Warren E. Buffett, CEO, Berkshire Hathaway (NYSE: BRK.B)
F. William McNabb III, Chairman & CEO, Vanguard
Laurence D. Fink, Chairman & CEO, BlackRock (NYSE: BLK)
Joseph L. Hooley, President & CEO, State Street Corporation (NYSE: STT)
Edward Johnson III, Chairman & CEO, Fidelity Investments
James Rothenberg, Chairman, Capital Group
Frederick H. Waddell, Chairman & CEO, Northern Trust Co. (NASDAQ: NTRS)
Gerald L. Hassell, Chairman & CEO, Bank of NY Mellon (NYSE: BK)
Donald Yacktman, President, Yacktman Asset Management
Brad Hilsabeck, CEO, Grantham Mayo Van Otterloo
Jeff Raikes, CEO, The Bill & Melinda Gates Foundation
Anshu Jain, Co-CEO, Deutsche Bank (NYSE: DB)
Yngve Slyngstad, CEO, Norges Bank Investment Management
Fayez Sarofim, Chairman, Fayez Sarofim & Co.
Vince Gubitosi, President & Chief Investment Officer, Geode Capital Management
James Dimon, Chairman & CEO, J.P. Morgan Chase (NYSE: JPM)
Brian T. Moynihan, CEO, Bank of America (NYSE: BAC)
Edward B. Rust, Jr. Chairman & CEO, State Farm Mutual Auto Insurance Co.
Richard Rossi, President, Eagle Asset Management
Roger W. Ferguson Jr, President & CEO, TIAA-CREF
Mark Zinkula, CEO, Legal & General Investment Management (LSE: LGEN)
James Kennedy, President & CEO, T Rowe Price Group (NYSE: TROW)
Sergio Ermotti, CEO, UBS AG (NYSE: UBS)
Gregory E. Johnson, Chairman & CEO, Franklin Resources (NYSE: BEN)
Contacts:
Wintergreen Advisers, LLC
David J. Winters
973-263-4500
press@wintergreenadvisers.com

Bryant Park Financial Communications
212-719-7535
Richard Mahony (rmahony@bryantparkfc.com)
Claire Currie (ccurrie@bryantparkfc.com)

Wintergreen Advisers, LLC Letter to Institutional Shareholders of Coca Cola

April 15, 2014

To My Fellow Institutional Shareholders:

At this moment, Coca-Cola shareholders are being asked to approve Coca-Cola’s 2014 Equity Plan, which we believe is deeply flawed and contrary to shareholders’ interests.

Wintergreen Advisers, LLC’s clients own more than 2.5 million shares of Coca-Cola and we have expressed our concerns about the Plan by writing letters to Coca-Cola’s Board of Directors, its largest shareholder, Berkshire Hathaway, and certain other institutional investors. We have also communicated our concerns in our presentation earlier this month.¹

We urge all institutional investors to review Coca-Cola’s proposed plan for themselves before they decide how they will vote.

I am writing today to urge you, the institutional shareholders in Coca-Cola, as fiduciaries for many thousands of individual investors, retirement funds, union and other pension plans to undertake a careful, thorough and independent review of Coca-Cola’s proposed plan before casting your vote.

Existing equity plans at the Coca-Cola Company are more than adequate to meet the Company’s needs. There are 66,948,651 awards remaining under existing Coca-Cola equity plans, enough to last another year at the recent pace of 65 million awards per year.²

It has become a common practice in recent years for institutional investors to rely on the recommendations of proxy advisory firms when voting on shareholder matters, the largest being Institutional Shareholder Services (“ISS”). Following these recommendations to award shares as part of a new Coca-Cola equity plan without performing your own due diligence would, in our view, be a disservice to the investors that you represent and serve.

We believe the methodology described in the ISS publicly available proxy guidelines understates the true cost to shareholders of Coca-Cola’s equity plan.

The ISS proxy-voting guidelines state that ISS, while reviewing each plan on its own merits, will generally vote against plans in which the total cost is “unreasonable” and which have a three-year burn rate exceeding the burn rate cap of its industry peers.³

ISS uses what it calls “shareholder value transfer” (SVT) to assess the cost of a plan, and will consider a plan “reasonable” if it does not exceed a threshold ISS calculates based on other companies in the industry.

The use of peer-group comparisons as a fundamental analytical tool carries an embedded bias that can result in increasingly expensive plans. To the extent every board wants to be in the top half or third of its peer group, equity plan costs will continue to rise.

Warren Buffett of Berkshire Hathaway, Coca-Cola’s largest shareholder, has warned against this trend:

“The drill is simple: Three or so directors – not chosen by chance – are bombarded for a few hours before a board meeting with pay statistics that perpetually ratchet upwards. Additionally, the committee is told about new perks that other managers are receiving. In this manner, outlandish “goodies” are showered upon CEOs simply because of a corporate version of the argument we all used when children: “But, Mom, all the other kids have one. When comp committees follow this “logic,” yesterday’s most egregious excess becomes today’s baseline.”⁴

The ISS guidelines support equity plans that have a “burn rate” (a measure of how rapidly shares are issued under the plan) that is within peer-group norms. The guidelines also include a minimum burn rate cap of 2%, which essentially rubber-stamps any equity plan that dilutes shareholders by “only” 2% per year.⁵ Wintergreen believes that 2% annual dilution from management equity awards is excessive for a slow-growth company such as Coca-Cola.

In addition, the level of SVT determined by ISS is an unacceptably high cost for shareholders to bear. For Coca-Cola and others in its sector, ISS sets the acceptable SVT threshold at 9 percent, according to published reports,⁶ which in Wintergreen’s view is an excessively high transfer of shareholder wealth.

There are many different ways of calculating the true cost shareholders pay for equity plans. Investors need to be cognizant of not only the share dilution caused by equity plans, but also the cash cost of repurchasing these shares to offset dilution. There is also the opportunity cost of not using that cash for more productive purposes, such as reinvesting it in the business.

In Coca-Cola’s case, we believe that the company may need to spend $2 billion per year to offset dilution. The failure to use that $2 billion more productively could mean billions of dollars in future earnings will never be realized. Over the past three years, Coca-Cola’s average return on equity has been 27%.⁷ This means that if Coca-Cola retained that annual $2 billion, it could potentially grow earnings by $540 million each year. These are real costs that need to be considered by investors.

Coca-Cola’s 2014 proposed equity plan appears to fall short of publicly available ISS guidelines in a number of areas.

Although the ISS report on Coca-Cola’s 2014 proxy is not available to the public, an analysis of ISS standards as stated on its website suggests the Coca-Cola plan falls short in several important respects

We believe that

The Coca-Cola plan fails to meet the ISS standard for linking pay to performance, because Coca-Cola has lowered its performance targets for management over the past two performance periods. While the targets were modestly raised for the current performance period, they are still below historical levels.⁸
The fact that every named officer at Coca-Cola has received more equity option grants over each of the past two years,⁹ even as Coke’s performance has failed to meet targets, demonstrates that Coke is not properly linking pay to performance.
The proposed plan fails to meet the publicly available ISS standard for investors that manage union pension plans under the Taft-Hartley Act. The proposed equity plan far exceeds the maximum acceptable voting power dilution under ISS Taft-Hartley guidelines of 10% over ten years.¹⁰
The proposed Plan may also fall short of Taft-Hartley guidelines that discourage excessive pay practices because it does not have a cap on the amount of equity that can be awarded to an individual. Prior Coca-Cola equity plans limited the maximum award to any single employee to 5% of the plan.
Coca-Cola’s compensation practices have been given a poor grade by ISS.

Publicly available information from ISS gives Coke’s compensation practices a low ranking.¹¹ On a range of 1 to 10, where 1 is the best and 10 the worst, Coca-Cola earned an 8, close to the bottom of the ISS scale. A detailed evaluation of Coke’s governance policies that lead to this ranking by ISS is available only to ISS customers and Coca-Cola.

It is difficult to see how ISS can give Coke a near-failing grade on its compensation policy yet still recommend to investors that they vote for an equity plan that could produce a windfall for management and huge dilution for owners.

Sincerely,

David J. Winters, CEO
Wintergreen Advisers, LLC



Notes:

The presentation is available at: http://wintergreenadvisers.com/pdf/Winte...040214.pdf
Coca-Cola 2014 proxy statement, page 87.
ISS U.S. Proxy Voting Summary Guidelines, March 2014, page 42.
2005 Berkshire Hathaway annual report
ISS U.S. Proxy Voting Summary Guidelines, March 2014, page 44.
Coca-Cola’s Stock Handouts get New Coke Reaction,” Reuters BreakingViews, April 9, 2014.
Return on equity figure sourced from Bloomberg
See page 57 of the 2014 Coca-Cola proxy statement.
See page 68 of the 2014 Coca-Cola proxy statement, page 71 of the 2013 Coca-Cola proxy statement, and page 61 of the 2012 Coca-Cola proxy statement.
ISS 2014 Taft-Hartley U.S. Proxy Voting Guidelines, page 28.
https://link.issgovernance.com/qs/free/31989
Reply
#15
David Winters Sends Another Letter To Warren Buffett About Coke
ValueWalk / by VW Staff / 56min ago
As investors continue to prepare to cast their proxy ballots ahead of The Coca-Cola Company (NYSE:KO)-0.22% annual shareholders’ meeting on April 23, David Winters, CEO of Wintergreen Advisers, sent a second letter to Coca-Cola’s largest shareholder, Warren Buffett , CEO of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) +0.24%.



Winters wrote, “We do not believe it would be consistent with Berkshire’s long ingrained culture to support such a plan at any of your equity holdings, much less one worth nearly $16 billion. If the proposed 2014 Coca Cola Equity Plan were to be approved by its shareholders, the implication for investment returns in our country may be devastating.”

The full text of the letter is included below.

Wintergreen Advisers, LLC Letter to Warren Buffett

Warren E. Buffett

Berkshire Hathaway Inc.

3555 Farnam St.

Omaha, NE 68131

April 16, 2014

Dear Warren,

Over the years your conviction and passion for corporate diligence and responsibility has echoed through the American consciousness. Like Jiminy Cricket you sit on our shoulders reminding us to do what is right. Work hard, be fair, save for our future, stand up for what is right, and think like an owner. Now the United States and investors are at a crossroads. People of all political persuasions recognize the enormous disparity in financial wealth between the vast majority of Americans and the very top ranks of the corporate elite.

Millions of investors depend upon Coca-Cola as a staple in their financial security planning. Some invest directly in Coca-Cola, others invest in index or actively managed equity funds, and some invest indirectly through the investment vehicle most near and dear to your heart, Berkshire Hathaway. Whether in the initial formative years of saving, in the midst of their careers or in the payout period of a well-deserved retirement, there are millions of people who worked hard for their money and believed the promise that their money would work hard for them.

Later this month at the company’s annual meeting, shareholders will vote to determine whether they will transfer a meaningful portion of Coca-Cola’s intrinsic value from the shareholders to the top five percent of the company’s employees. The proposed equity plan, when combined with existing plans, could dilute all Coca-Cola shareholders by taking up to 16.6% of the value of each share, worth $6.67 per Coca-Cola share at last night’s closing price of $40.18, and handing it to the top 5% of Coke management. If Coke uses the share repurchase program to offset the issuance of these shares as they have done in recent years, shareholders will be further damaged. The company may have to divert approximately $2 billion per year (one-quarter of its free cash flow) from productive uses to offsetting dilution. To a business with a 27% return on equity, the opportunity cost of spending $2 billion per year to offset dilution is enormous.

As you stated in your 2013 letter to Berkshire shareholders,

Meanwhile, stock repurchases at Coca-Cola and American Express raised our percentage ownership. Our equity in Coca-Cola grew from 8.9% to 9.1%…And, if you think tenths of a percent aren’t important, ponder this math: For the four companies in aggregate, each increase of one-tenth of a percent in our share of their equity raises Berkshire’s share of their annual earnings by $50 million.

Coca-Cola repurchased 121 million shares in 2013, but turned around and issued 54 million shares and options to management, reducing the share count by only 67 million shares. Now realize that if Coca-Cola hadn’t issued those 54 million shares to executives, Berkshire’s ownership of Coca-Cola would now be 9.2% instead of 9.1% and Berkshire’s share of Coca-Cola’s earnings would be $10 million larger. We agree with you – one tenth of a percent IS a big deal to Berkshire! With the proposed 2014 Equity Plan potentially issuing more shares in fewer years than previous equity compensation plans, this dilution headwind to Berkshire and all Coca-Cola shareholders will likely only grow worse.

In the 52 years you have been Chairman and CEO, you have not implemented such a dilutive compensation plan at Berkshire Hathaway, and it is unthinkable that you ever will. We do not believe it would be consistent with Berkshire’s long ingrained culture to support such a plan at any of your equity holdings, much less one worth nearly $16 billion. If the proposed 2014 The Coca-Cola Company (NYSE:KO) Equity Plan were to be approved by its shareholders, the implication for investment returns in our country may be devastating.

We believe that approval of the proposed Coca-Cola plan will harm the returns of all Coca-Cola shareholders, including Berkshire. If the proposed plan becomes the model for subsidiaries within Berkshire, the financial returns for all Berkshire shareholders would be dramatically diminished. Similar plans implemented by more companies in theS&P 500 Index could starve index fund owners of their expected returns. Investors who vote for these excessively dilutive plans risk becoming enablers in the spiral of ever-higher executive pay.

With enough shares remaining under existing plans to function well for another year, Coca-Cola does not need a new plan at this time. Coca-Cola’s board of directors should take the time to rethink and refine the proposed equity plan in a manner that will be fair and reasonable from the perspective of both shareholders and employees.

We believe that Coca-Cola’s proposed 2014 Equity Plan is bad for Berkshire Hathaway, bad for Coca-Cola, and bad for the investment outlook for U.S. companies. This is a moment in time when America again looks to you to continue to stand up for what is best for our corporations and our country, just as you have talked about and done for decades. The Coca-Cola Company (NYSE:KO) and Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) shareholders, and in reality all of America, are counting on you to demand that shareholders be treated as partners instead of piggy banks. This is an opportunity to champion the true owners of American businesses – the shareholders.

Regards,

David J. Winters, CEO

Wintergreen Advisers, LLC

973-263-4500
THIS IS NOT A SOLICITATION OF DIRECT OR INDIRECT AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND US YOUR PROXY CARD; WINTERGREEN ADVISERS, LLC AND ITS AFFILIATES ARE NOT ABLE TO VOTE YOUR PROXIES AND THIS COMMUNICATION DOES NOT CONTEMPLATE SUCH AN EVENT.

THIS LETTER INCLUDES INFORMATION BASED ON DATA FOUND IN FILINGS WITH THESECURITIES AND EXCHANGE COMMISSION, INDEPENDENT INDUSTRY PUBLICATIONS AND OTHER SOURCES. ALTHOUGH WE BELIEVE THAT THE DATA ARE RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS LETTER. MANY OF THE STATEMENTS IN THIS LETTER REFLECT OUR SUBJECTIVE BELIEF.

THE INFORMATION CONTAINED HEREIN IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF THE COCA-COLA COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING THE COCA-COLA COMPANY AND ITS PROSPECTS BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. NEITHER WINTERGREEN ADVISERS, LLC, NOR ANY OF ITS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED HEREIN.

The post David Winters Sends Another Letter To Warren Buffett About Coke appeared first on ValueWalk.

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"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#15
David Winters Sends Another Letter To Warren Buffett About Coke
ValueWalk / by VW Staff / 56min ago
As investors continue to prepare to cast their proxy ballots ahead of The Coca-Cola Company (NYSE:KO)-0.22% annual shareholders’ meeting on April 23, David Winters, CEO of Wintergreen Advisers, sent a second letter to Coca-Cola’s largest shareholder, Warren Buffett , CEO of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) +0.24%.



Winters wrote, “We do not believe it would be consistent with Berkshire’s long ingrained culture to support such a plan at any of your equity holdings, much less one worth nearly $16 billion. If the proposed 2014 Coca Cola Equity Plan were to be approved by its shareholders, the implication for investment returns in our country may be devastating.”

The full text of the letter is included below.

Wintergreen Advisers, LLC Letter to Warren Buffett

Warren E. Buffett

Berkshire Hathaway Inc.

3555 Farnam St.

Omaha, NE 68131

April 16, 2014

Dear Warren,

Over the years your conviction and passion for corporate diligence and responsibility has echoed through the American consciousness. Like Jiminy Cricket you sit on our shoulders reminding us to do what is right. Work hard, be fair, save for our future, stand up for what is right, and think like an owner. Now the United States and investors are at a crossroads. People of all political persuasions recognize the enormous disparity in financial wealth between the vast majority of Americans and the very top ranks of the corporate elite.

Millions of investors depend upon Coca-Cola as a staple in their financial security planning. Some invest directly in Coca-Cola, others invest in index or actively managed equity funds, and some invest indirectly through the investment vehicle most near and dear to your heart, Berkshire Hathaway. Whether in the initial formative years of saving, in the midst of their careers or in the payout period of a well-deserved retirement, there are millions of people who worked hard for their money and believed the promise that their money would work hard for them.

Later this month at the company’s annual meeting, shareholders will vote to determine whether they will transfer a meaningful portion of Coca-Cola’s intrinsic value from the shareholders to the top five percent of the company’s employees. The proposed equity plan, when combined with existing plans, could dilute all Coca-Cola shareholders by taking up to 16.6% of the value of each share, worth $6.67 per Coca-Cola share at last night’s closing price of $40.18, and handing it to the top 5% of Coke management. If Coke uses the share repurchase program to offset the issuance of these shares as they have done in recent years, shareholders will be further damaged. The company may have to divert approximately $2 billion per year (one-quarter of its free cash flow) from productive uses to offsetting dilution. To a business with a 27% return on equity, the opportunity cost of spending $2 billion per year to offset dilution is enormous.

As you stated in your 2013 letter to Berkshire shareholders,

Meanwhile, stock repurchases at Coca-Cola and American Express raised our percentage ownership. Our equity in Coca-Cola grew from 8.9% to 9.1%…And, if you think tenths of a percent aren’t important, ponder this math: For the four companies in aggregate, each increase of one-tenth of a percent in our share of their equity raises Berkshire’s share of their annual earnings by $50 million.

Coca-Cola repurchased 121 million shares in 2013, but turned around and issued 54 million shares and options to management, reducing the share count by only 67 million shares. Now realize that if Coca-Cola hadn’t issued those 54 million shares to executives, Berkshire’s ownership of Coca-Cola would now be 9.2% instead of 9.1% and Berkshire’s share of Coca-Cola’s earnings would be $10 million larger. We agree with you – one tenth of a percent IS a big deal to Berkshire! With the proposed 2014 Equity Plan potentially issuing more shares in fewer years than previous equity compensation plans, this dilution headwind to Berkshire and all Coca-Cola shareholders will likely only grow worse.

In the 52 years you have been Chairman and CEO, you have not implemented such a dilutive compensation plan at Berkshire Hathaway, and it is unthinkable that you ever will. We do not believe it would be consistent with Berkshire’s long ingrained culture to support such a plan at any of your equity holdings, much less one worth nearly $16 billion. If the proposed 2014 The Coca-Cola Company (NYSE:KO) Equity Plan were to be approved by its shareholders, the implication for investment returns in our country may be devastating.

We believe that approval of the proposed Coca-Cola plan will harm the returns of all Coca-Cola shareholders, including Berkshire. If the proposed plan becomes the model for subsidiaries within Berkshire, the financial returns for all Berkshire shareholders would be dramatically diminished. Similar plans implemented by more companies in theS&P 500 Index could starve index fund owners of their expected returns. Investors who vote for these excessively dilutive plans risk becoming enablers in the spiral of ever-higher executive pay.

With enough shares remaining under existing plans to function well for another year, Coca-Cola does not need a new plan at this time. Coca-Cola’s board of directors should take the time to rethink and refine the proposed equity plan in a manner that will be fair and reasonable from the perspective of both shareholders and employees.

We believe that Coca-Cola’s proposed 2014 Equity Plan is bad for Berkshire Hathaway, bad for Coca-Cola, and bad for the investment outlook for U.S. companies. This is a moment in time when America again looks to you to continue to stand up for what is best for our corporations and our country, just as you have talked about and done for decades. The Coca-Cola Company (NYSE:KO) and Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) shareholders, and in reality all of America, are counting on you to demand that shareholders be treated as partners instead of piggy banks. This is an opportunity to champion the true owners of American businesses – the shareholders.

Regards,

David J. Winters, CEO

Wintergreen Advisers, LLC

973-263-4500
THIS IS NOT A SOLICITATION OF DIRECT OR INDIRECT AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND US YOUR PROXY CARD; WINTERGREEN ADVISERS, LLC AND ITS AFFILIATES ARE NOT ABLE TO VOTE YOUR PROXIES AND THIS COMMUNICATION DOES NOT CONTEMPLATE SUCH AN EVENT.

THIS LETTER INCLUDES INFORMATION BASED ON DATA FOUND IN FILINGS WITH THESECURITIES AND EXCHANGE COMMISSION, INDEPENDENT INDUSTRY PUBLICATIONS AND OTHER SOURCES. ALTHOUGH WE BELIEVE THAT THE DATA ARE RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS LETTER. MANY OF THE STATEMENTS IN THIS LETTER REFLECT OUR SUBJECTIVE BELIEF.

THE INFORMATION CONTAINED HEREIN IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF THE COCA-COLA COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING THE COCA-COLA COMPANY AND ITS PROSPECTS BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. NEITHER WINTERGREEN ADVISERS, LLC, NOR ANY OF ITS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED HEREIN.

The post David Winters Sends Another Letter To Warren Buffett About Coke appeared first on ValueWalk.

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"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#16
Buffett Says He Opposes Coke Pay Plan, Abstained in Vote
By Zachary Tracer and Noah Buhayar
April 24, 2014 12:00 AM EDT 24 Comments
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Warren Buffet
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (BRK/A), said he opposes Coca-Cola Co.’s plan to pay employees with stock and abstained from a vote on the proposal out of loyalty to the soft-drink maker.

“I could never vote against Coca-Cola, but I couldn’t vote for the plan either,” Buffett said yesterday in an interview with Bloomberg Television’s Betty Liu in New York. “That’s just the way I feel about the people there.”

Eighty-three percent of investor votes cast at the company’s annual meeting yesterday supported the equity plan, according to preliminary results in an e-mailed statement from Atlanta-based Coca-Cola. David Winters, a money manager who invests in both the soft-drink maker and Berkshire, had called on Buffett to oppose the pay plan, saying it violates the billionaire’s principles on stock dilution.

Buffett, who controls the largest stake in Coca-Cola, said it was proper for Winters to go public with his criticism. And while Buffett said he disagrees with some of the figures used by Winters, he shares the thought that the company plans to give out too much stock.

“I think it’s a great company, it’s run by great people, and I think it’s got a great future,” Buffett said. “I just think the plan is excessive.”
Berkshire’s Coca-Cola holding has climbed more than 12-fold since Buffett began accumulating the stake in the 1980s. It’s now valued at about $16.3 billion.

Coke Drinker
Buffett often drinks Coca-Cola beverages at public appearances and told Liu that he’s good friends with Muhtar Kent, the company’s chief executive officer. Howard G. Buffett, the billionaire’s son, sits on Coca-Cola’s board.

Winters had said the latest equity plan, in addition to ones already enacted, could transfer $29.8 billion to the Coca-Cola managers. Coca-Cola said it granted long-term equity compensation to about 6,400 employees in 2013.
Winters’s Wintergreen Advisers LLC said after the vote that it was pleased with the level of opposition and welcomes further discussion about executive pay -- even if Buffett only voiced his concerns after the fact.

“We are surprised that Warren Buffett had the opportunity to take a stand against excessive management compensation and failed to seize it,” Wintergreen said in a statement.

Coca-Cola has said that stock repurchases, including $4.8 billion of buybacks in 2013, cushion the dilution tied to employee awards. Dilution related to equity plans has been less than 1 percent annually over the past three years, “and is expected to be in this range going forward,” the company said in a presentation.
Coca-Cola also said that the link of the pay to performance means that all the potential awards may not be earned.

“The equity plan is fair, competitive and consistent with share owners’ interests and our pay for performance philosophy,” according to a statement from Coca-Cola.

Coca-Cola shares have declined 1.4 percent this year, trailing the 1.5 percent gain of the Standard & Poor’s 500 Index.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Noah Buhayar in New York at nbuhayar@bloomberg.net
Reply
#16
Buffett Says He Opposes Coke Pay Plan, Abstained in Vote
By Zachary Tracer and Noah Buhayar
April 24, 2014 12:00 AM EDT 24 Comments
Facebook Twitter LinkedIn Save

Warren Buffet
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (BRK/A), said he opposes Coca-Cola Co.’s plan to pay employees with stock and abstained from a vote on the proposal out of loyalty to the soft-drink maker.

“I could never vote against Coca-Cola, but I couldn’t vote for the plan either,” Buffett said yesterday in an interview with Bloomberg Television’s Betty Liu in New York. “That’s just the way I feel about the people there.”

Eighty-three percent of investor votes cast at the company’s annual meeting yesterday supported the equity plan, according to preliminary results in an e-mailed statement from Atlanta-based Coca-Cola. David Winters, a money manager who invests in both the soft-drink maker and Berkshire, had called on Buffett to oppose the pay plan, saying it violates the billionaire’s principles on stock dilution.

Buffett, who controls the largest stake in Coca-Cola, said it was proper for Winters to go public with his criticism. And while Buffett said he disagrees with some of the figures used by Winters, he shares the thought that the company plans to give out too much stock.

“I think it’s a great company, it’s run by great people, and I think it’s got a great future,” Buffett said. “I just think the plan is excessive.”
Berkshire’s Coca-Cola holding has climbed more than 12-fold since Buffett began accumulating the stake in the 1980s. It’s now valued at about $16.3 billion.

Coke Drinker
Buffett often drinks Coca-Cola beverages at public appearances and told Liu that he’s good friends with Muhtar Kent, the company’s chief executive officer. Howard G. Buffett, the billionaire’s son, sits on Coca-Cola’s board.

Winters had said the latest equity plan, in addition to ones already enacted, could transfer $29.8 billion to the Coca-Cola managers. Coca-Cola said it granted long-term equity compensation to about 6,400 employees in 2013.
Winters’s Wintergreen Advisers LLC said after the vote that it was pleased with the level of opposition and welcomes further discussion about executive pay -- even if Buffett only voiced his concerns after the fact.

“We are surprised that Warren Buffett had the opportunity to take a stand against excessive management compensation and failed to seize it,” Wintergreen said in a statement.

Coca-Cola has said that stock repurchases, including $4.8 billion of buybacks in 2013, cushion the dilution tied to employee awards. Dilution related to equity plans has been less than 1 percent annually over the past three years, “and is expected to be in this range going forward,” the company said in a presentation.
Coca-Cola also said that the link of the pay to performance means that all the potential awards may not be earned.

“The equity plan is fair, competitive and consistent with share owners’ interests and our pay for performance philosophy,” according to a statement from Coca-Cola.

Coca-Cola shares have declined 1.4 percent this year, trailing the 1.5 percent gain of the Standard & Poor’s 500 Index.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Noah Buhayar in New York at nbuhayar@bloomberg.net
Reply
#17
Buffett Says Abstaining Beats War in Dispute Over Coke Pay Plan
By Duane D. Stanford and Noah Buhayar May 03, 2014

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (A:US), said a private conversation with Coca-Cola Co. CEO Muhtar Kent was better than publicly rebuking him over the company’s compensation plan.

“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 today at Berkshire’s annual meeting at the CenturyLink Center in Omaha, Nebraska. “I don’t think going to war is a very good idea in most situations.”

Buffett abstained from voting against the pay proposal at Coca-Cola’s shareholder meeting on April 23, then began criticizing the plan after it passed. Buffett, whose company is the largest shareholder in Atlanta-based Coca-Cola, said at the time that his loyalty to the soft-drink maker kept him from voting against the measure.

“The best result for the Coca-Cola Company was achieved by our abstention,” Buffett said today.

David Winters, an investor in both Coca-Cola and Berkshire, had called on Buffett to oppose the pay plan, saying it violates the billionaire’s principles on stock dilution. The measure passed with 83 percent of the votes cast.

“No matter how you slice it or dice it, Buffett reached the same conclusion that we did -- the plan is excessive,” Winters said this week.
Video: Buffett: I Could Never Vote Against Coca-Cola

Winters has said that the equity plan, in addition to ones already enacted, could transfer $29.8 billion to the Coca-Cola managers, harming shareholders. Coca-Cola granted long-term equity compensation to about 6,400 employees in 2013.
‘Wildly Inaccurate’

“We did not endorse some calculations that were wildly inaccurate and join forces” with Winters, Buffett said today.

Coke declined to say what discussions it had with shareholders on the equity plan.
Story: Greg Abel: The Next Oracle of Omaha?

“The company routinely interacts with shareowners both large and small in order to receive feedback on any number of matters, including about the 2014 equity plan,” the Atlanta-based company said in a statement yesterday. “We do not, however, share specific details of those interactions.”

Coca-Cola shares have declined 0.9 percent this year, trailing the 1.8 percent gain of the Standard & Poor’s 500 Index.
Reply
#17
Buffett Says Abstaining Beats War in Dispute Over Coke Pay Plan
By Duane D. Stanford and Noah Buhayar May 03, 2014

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (A:US), said a private conversation with Coca-Cola Co. CEO Muhtar Kent was better than publicly rebuking him over the company’s compensation plan.

“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 today at Berkshire’s annual meeting at the CenturyLink Center in Omaha, Nebraska. “I don’t think going to war is a very good idea in most situations.”

Buffett abstained from voting against the pay proposal at Coca-Cola’s shareholder meeting on April 23, then began criticizing the plan after it passed. Buffett, whose company is the largest shareholder in Atlanta-based Coca-Cola, said at the time that his loyalty to the soft-drink maker kept him from voting against the measure.

“The best result for the Coca-Cola Company was achieved by our abstention,” Buffett said today.

David Winters, an investor in both Coca-Cola and Berkshire, had called on Buffett to oppose the pay plan, saying it violates the billionaire’s principles on stock dilution. The measure passed with 83 percent of the votes cast.

“No matter how you slice it or dice it, Buffett reached the same conclusion that we did -- the plan is excessive,” Winters said this week.
Video: Buffett: I Could Never Vote Against Coca-Cola

Winters has said that the equity plan, in addition to ones already enacted, could transfer $29.8 billion to the Coca-Cola managers, harming shareholders. Coca-Cola granted long-term equity compensation to about 6,400 employees in 2013.
‘Wildly Inaccurate’

“We did not endorse some calculations that were wildly inaccurate and join forces” with Winters, Buffett said today.

Coke declined to say what discussions it had with shareholders on the equity plan.
Story: Greg Abel: The Next Oracle of Omaha?

“The company routinely interacts with shareowners both large and small in order to receive feedback on any number of matters, including about the 2014 equity plan,” the Atlanta-based company said in a statement yesterday. “We do not, however, share specific details of those interactions.”

Coca-Cola shares have declined 0.9 percent this year, trailing the 1.8 percent gain of the Standard & Poor’s 500 Index.
Reply
#18
I post the article here, since Coca-Cola is highlighted as example...

Pay disclosure fuels jealousy, harms investors, says Buffett

NEW YORK — Mr Warren Buffett, the world’s third-richest man, said requiring disclosure of more executives’ salaries could hurt shareholders.

Managers who find that their colleagues make more may become jealous and press for higher awards, Mr Buffett said at the annual meeting of his firm, Berkshire Hathaway.

“That’s a good reason for us not publishing the salaries,” he said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”

Mr Buffett was responding to a question about whether Berkshire, where he is chairman and chief executive officer, would disclose the pay of more executives. Publicly-traded United States companies must reveal certain compensation information in filings with the Securities and Exchange Commission (SEC), and some state insurance regulators collect pay data.

Berkshire’s energy business said in its annual report that Mr Greg Abel, the CEO of the unit, got US$10.7 million (S$13.4 million) in compensation last year, including a US$9.5 million bonus and US$1 million base salary. Mr Buffett, who has a net worth of about US$65.6 billion, takes a US$100,000 annual salary.

The US Census Bureau said median household income was US$51,017 in the US in 2012, an 8.3 per cent decline from 2007 when adjusted for inflation.

Mr Buffett, who is Berkshire’s largest shareholder, said company leaders as a group would see their pay decline if compensation data were kept private.

“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less’,’’ he said on Saturday. “American shareholders are paying a significant price because they get to look at that proxy statement each year.’’

Compensation has come under scrutiny for fostering risk-taking and amid worsening inequality. The Financial Crisis Inquiry Commission said in 2011 that stock-option bonuses motivated financial firms to use leverage to boost returns.

Mr Buffett said compensation disclosures led to trouble when he was interim chairman of Salomon in 1991 and 1992, as the firm worked to recover from a Treasury debt auction scandal. Almost everybody was dissatisfied with their pay at Salomon “because they looked at somebody else in the place and it drove them crazy”, he said.

The SEC proposed in September that public companies provide more information about CEO pay. The commissioners voted 3-to-2 to seek comment on a requirement that businesses disclose the ratio of CEO compensation to median worker pay.

Mr Buffett has been criticised for not doing his part to rein in compensation, after he abstained last month from voting on a pay plan at Coca-Cola that he opposed. He told Bloomberg: “I could never vote against Coca-Cola, but I couldn’t vote for the plan either.”

Mr Buffett said he had a private conversation with Coca-Cola CEO Muhtar Kent, rather than rebuke the firm publicly. Berkshire is the largest owner of the soda-maker’s shares, and Mr Buffett’s son sits on the firm’s board. Bloomberg
http://www.todayonline.com/business/pay-...epage=true
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
#18
I post the article here, since Coca-Cola is highlighted as example...

Pay disclosure fuels jealousy, harms investors, says Buffett

NEW YORK — Mr Warren Buffett, the world’s third-richest man, said requiring disclosure of more executives’ salaries could hurt shareholders.

Managers who find that their colleagues make more may become jealous and press for higher awards, Mr Buffett said at the annual meeting of his firm, Berkshire Hathaway.

“That’s a good reason for us not publishing the salaries,” he said. “It’s very seldom that publishing compensation accomplishes much for the shareholders.”

Mr Buffett was responding to a question about whether Berkshire, where he is chairman and chief executive officer, would disclose the pay of more executives. Publicly-traded United States companies must reveal certain compensation information in filings with the Securities and Exchange Commission (SEC), and some state insurance regulators collect pay data.

Berkshire’s energy business said in its annual report that Mr Greg Abel, the CEO of the unit, got US$10.7 million (S$13.4 million) in compensation last year, including a US$9.5 million bonus and US$1 million base salary. Mr Buffett, who has a net worth of about US$65.6 billion, takes a US$100,000 annual salary.

The US Census Bureau said median household income was US$51,017 in the US in 2012, an 8.3 per cent decline from 2007 when adjusted for inflation.

Mr Buffett, who is Berkshire’s largest shareholder, said company leaders as a group would see their pay decline if compensation data were kept private.

“No CEO looks at a proxy statement and comes away saying, ‘I should be paid less’,’’ he said on Saturday. “American shareholders are paying a significant price because they get to look at that proxy statement each year.’’

Compensation has come under scrutiny for fostering risk-taking and amid worsening inequality. The Financial Crisis Inquiry Commission said in 2011 that stock-option bonuses motivated financial firms to use leverage to boost returns.

Mr Buffett said compensation disclosures led to trouble when he was interim chairman of Salomon in 1991 and 1992, as the firm worked to recover from a Treasury debt auction scandal. Almost everybody was dissatisfied with their pay at Salomon “because they looked at somebody else in the place and it drove them crazy”, he said.

The SEC proposed in September that public companies provide more information about CEO pay. The commissioners voted 3-to-2 to seek comment on a requirement that businesses disclose the ratio of CEO compensation to median worker pay.

Mr Buffett has been criticised for not doing his part to rein in compensation, after he abstained last month from voting on a pay plan at Coca-Cola that he opposed. He told Bloomberg: “I could never vote against Coca-Cola, but I couldn’t vote for the plan either.”

Mr Buffett said he had a private conversation with Coca-Cola CEO Muhtar Kent, rather than rebuke the firm publicly. Berkshire is the largest owner of the soda-maker’s shares, and Mr Buffett’s son sits on the firm’s board. Bloomberg
http://www.todayonline.com/business/pay-...epage=true
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#19
Coca-Cola Co profit falls; company expands cost-cutting

Coca-Cola Co said on Tuesday that its quarterly profit fell 14 percent as sales of carbonated beverage volumes in North America declined.

The company, whose shares fell 4 percent, also said it expected to miss its long-term earnings growth target in 2014, due in part to currency fluctuations. It forecast a 6 percentage point impact from currency on full-year operating income, which is on the high end of the outlook the company gave last quarter.

The world's largest beverage maker said net income for the third quarter ended Sept. 26 declined to $2.1 billion, or 48 cents a share, from $2.4 billion, or 54 cents a share, a year earlier.

Excluding charges for refranchising some North American bottling operations and other special items, earnings per share were 53 cents, in line with analysts' expectations.

The company said it would refranchise the majority of its company-owned North American bottling territories by the end of 2017 and a substantial portion of the remaining territories no later than 2020.

Overall revenue was flat at $11.97 billion. Analysts were expecting $12.12 billion.

Coke said it was targeting an annual savings of $3 billion per year by 2019 through an expansion of its productivity initiatives.

Shares of Coke fell 4 percent to $41.55 in premarket trading. REUTERS
http://www.todayonline.com/business/coca...st-cutting
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#19
Coca-Cola Co profit falls; company expands cost-cutting

Coca-Cola Co said on Tuesday that its quarterly profit fell 14 percent as sales of carbonated beverage volumes in North America declined.

The company, whose shares fell 4 percent, also said it expected to miss its long-term earnings growth target in 2014, due in part to currency fluctuations. It forecast a 6 percentage point impact from currency on full-year operating income, which is on the high end of the outlook the company gave last quarter.

The world's largest beverage maker said net income for the third quarter ended Sept. 26 declined to $2.1 billion, or 48 cents a share, from $2.4 billion, or 54 cents a share, a year earlier.

Excluding charges for refranchising some North American bottling operations and other special items, earnings per share were 53 cents, in line with analysts' expectations.

The company said it would refranchise the majority of its company-owned North American bottling territories by the end of 2017 and a substantial portion of the remaining territories no later than 2020.

Overall revenue was flat at $11.97 billion. Analysts were expecting $12.12 billion.

Coke said it was targeting an annual savings of $3 billion per year by 2019 through an expansion of its productivity initiatives.

Shares of Coke fell 4 percent to $41.55 in premarket trading. REUTERS
http://www.todayonline.com/business/coca...st-cutting
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#20
The slimming exercise has started...

Coca-Cola cuts up to 1,800 jobs to pare cost as sales slump

ATLANTA (Jan 9): Coca-Cola will cut as many as 1,800 jobs, or about one percent of its global workforce, as the world’s largest beverage company reduces costs amid a sales slump.

The first employees to be fired were notified yesterday and more jobs will be eliminated in the coming months, the company said in an e-mailed statement.

The cuts will stretch across Coke’s corporate headquarters and North American operations, both based in Atlanta, as well as its international units.

“We are redesigning our operating model to streamline and simplify our structure and accelerate the growth of our global business,” Coca-Cola said.

“We will continuously look for ways to streamline our business and drive growth as our business and our operating model evolve.”
...
http://www.theedgemarkets.com/sg/article...ales-slump
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#20
The slimming exercise has started...

Coca-Cola cuts up to 1,800 jobs to pare cost as sales slump

ATLANTA (Jan 9): Coca-Cola will cut as many as 1,800 jobs, or about one percent of its global workforce, as the world’s largest beverage company reduces costs amid a sales slump.

The first employees to be fired were notified yesterday and more jobs will be eliminated in the coming months, the company said in an e-mailed statement.

The cuts will stretch across Coke’s corporate headquarters and North American operations, both based in Atlanta, as well as its international units.

“We are redesigning our operating model to streamline and simplify our structure and accelerate the growth of our global business,” Coca-Cola said.

“We will continuously look for ways to streamline our business and drive growth as our business and our operating model evolve.”
...
http://www.theedgemarkets.com/sg/article...ales-slump
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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