“Warren Buffett says he disapproves of Coca-Cola’s highly contested pay plan for its executives.
Buffet, whose company is the beverage maker’s largest shareholder, called the plan ‘excessive’ in an interview on CNBC after it was approved at the company’s annual meeting. But he said Berkshire Hathaway abstained from voting against the pay because he did not want to express disapproval of the company’s management.” (Dominion Post, hard copy 25.4.2014 and on Stuff here)
This seems odd to me, coming from someone who is well known for his views on ridiculously high wages for senior executives. Perhaps the fact that his son is on the Coca-Cola board may have influenced him not to truly voice his disapproval. Or was it the fact that the higher the money paid to Chief Executives, the better the fees for directors?
There didn’t seem to be much in the way of disagreement about all this. What there was came for a shareholder advisory firm, Wintergreen, who were concerned that this plan was a ‘raw deal’ for the shareholders as US$13 billion would be transferred to managers over the next four years.
But hold on. The poor CEO of Coca-Cola had his income cut by US$2.4 million (from US$21.6 million!) this year because he failed to meet the company’s long-term growth targets. How will he survive?
This is a common scenario at this level of business and fails miserably to take into account the people who actually do the hands-on work and make the profits for the senior managers and shareholders.
Isn’t it time this was changed to share the rewards more equitably and improve the distribution of wealth across our societies so that all benefit?