Coke Reigns in Pay Plan

Beverage giant Coca-Cola is going to curtail its executive pay plan after shareholders – including billionaire investor Warren Buffett – say that it is too excessive.

Coca-Cola, the largest maker of beverages in the world, said on Wednesday that the long-term incentive plan of the company is now going to distribute shares to a much smaller group of executives, while the rest are going to be rewarded with cash bonuses.

This means that the authorized total shares being awarded under the plan are going to last longer. Additionally, Coca-Cola said the mix of equity awards for the long-term are going to be adjusted to more heavily weighted to performance shares, instead of issuing stock options.

The pay plan at Coca-Cola became scrutinized earlier this year after Wintergreen Advisers said that it was a “raw deal” for the beverage giant shareholders, and this is particularly in light of the slow growth of the company as it faces declining soda consumption in the United States plus other parts of the world.

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