Carl Icahn has a piece up in Barron’s blasting Warren Buffett.
At issue is a compensation plan at Coca-Cola — which is a longtime Berkshire Hathaway holding — that transfers billions to company management over the next several years.
You can see some details here, but even by modern standards of executive pay, the plan is thought to be egregious.
Buffett has said that while he doesn’t approve of the package, he nonetheless wouldn’t vote against it.
Icahn’s piece slams Buffett for not standing up for what’s right:
My colleagues and I have fought long and hard to change fellow board members’ attitudes and beliefs concerning their responsibility to shareholders, even if this change angers the CEO and some of his cronies sitting on the board. But if a man of Warren Buffett’s stature openly states he abstains from voting on plans he doesn’t agree with because he “loves” management and he doesn’t want to “express any disapproval,” how can we expect other board members in this country to voice their opinions, especially if they are opposed to the CEO’s interest?
In Thursday’s Wall Street Journal, Buffett reiterated, “I am against the plan,” but went on to state he wanted to make clear he wasn’t attacking Coke’s management or directors. But if this is taken to its logical conclusion, you should not vote no, even if you are diametrically opposed to what the CEO and certain of his crony board members want.
This week it came out that Coca-Cola would likely change its comp plan under pressure from Buffett, so it seems that Buffett’s strategy is to exert influence through ways other than a public vote, which seems reasonable. In fact, Buffett had a quick reply at Barron’s stating there are multiple ways to affect change.
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