(Updates with additional vote results in last paragraph.)
April 23 (Bloomberg) -- Coca-Cola Co. won investor approval for its plan to award employees with stock, overcoming an argument from money manager David Winters that lavish pay packages are diminishing returns for shareholders.
Eighty-three percent of votes cast supported the equity plan, according to preliminary results in an e-mailed statement today from the company. The annual meeting was held in Atlanta, the city where Coca-Cola is based.
Winters had waged a campaign since March to persuade investors to reject the soft-drink maker’s proposal. The new plan, in addition to ones already enacted, could transfer $29.8 billion to the managers, he said. Investors such as the Ontario Teachers’ Pension Plan and Calvert Investments had sided with Winters, who runs the firm Wintergreen Advisers LLC. Coca-Cola said its board was pleased with the vote.
“The company’s compensation programs are performance-based and the equity plan is fair, competitive and consistent with shareowners’ interests and our pay for performance philosophy,” according to the statement.
In making his case, Winters appealed directly to Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett, who controls the biggest stake in Coca-Cola. Buffett, the world’s third-richest person, used to be on Coca-Cola’s board, and his son is a director.
“His fiduciary duty is to all of the Berkshire shareholders,” Winters said in an interview yesterday. Buffett shouldn’t vote based on “any other extraneous factors.”
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.
Coca-Cola said a separate advisory vote on executive compensation won 90 percent support. Investors also voted against a measure that called for an independent board chairman.