Boston, MA 10/06/2014 (wallstreetpr) – The Coca-Cola Company (NYSE:KO) has yielded to sharp criticism from shareholders and moved with speed to address concerns about its compensation plan. Shareholders have consistently argued that the company’s stock compensation plan only goes to dilute stock’s value in the market instead of guaranteeing shareholders value.
Shareholders discontent
Focus now shifts to whether the newly initiated compensation plan will be enough to calm the uproar coming even from billionaire Warren Buffet, who owns some stakes in the company. The Coca-Cola Company (NYSE:KO) compensation plan was unanimously approved earlier in the year by 83% of the shareholders, but there was still some discontent on how it was being carried out.
One of the contentious issues was that the company was issuing too many shares that consequently diluted the value of existing shares in the market. Some critics also argued that stakes allocation sidelined most of the company’s employees who are working tirelessly to grow the company’s value. The Coca-Cola Company (NYSE:KO) has not been performing well in the market to justify any stock allocation with many investors remaining pessimistic about the company’s ability to post solid sales in the current quarter.
Changing Customer preferences
The main struggle at the moment for The Coca-Cola Company (NYSE:KO) is that customer’s preference has shifted away from sugary drinks, which form the core business for the company. Warren Buffet had not initially voted against the compensation plan but described it as excessive. The Coca-Cola Company (NYSE:KO) has stated that it will not reduce the amount of shares it offloads in the market but essentially increased the period in which it will offload any additional shares
The Coca-Cola Company (NYSE:KO) has also stated that it will be reducing the amount of stock-based compensation that it is to carry out in the future. Stock-based compensation on employees will be carried out on a limited basis. The original plan was to compensate up to 6,500 employees with a new plan now expected to cover less than 1,000 employees.
