Warren Buffett was sending mixed messages Tuesday.  While expressing dissatisfaction with the “excessive” The Coca-Cola Company (NYSE:KO) executive compensation program, Buffett chose to sit on his hands when it came to opposing the The Coca-Cola Company (NYSE:KO) board on the issue.

Buffett on CNBC

 

The The Coca-Cola Company (NYSE:KO) board was quick to praise Buffett for abstaining in the proxy battle brought by activist hedge fund David Winters, who must be scratching his head.  In an interview with ValueWalk last week Winters said: “If management is going to hijack the value of the company investors should be aware.” Ironic it must be that Winters might have been correct – the Coke compensation package was “excessive” – but his views were not vindicated where it mattered.  He lost the vote, 2,192,692,667 shares voting in favor of the executive compensation proposal with 444,087,921 against with almost an equal number of shares abstaining, 407,773,514 and 641,901,782 broker non-votes.

Buffett says it would be “un-American” to vote against Coke management despite thinking compensation plan is “excessive”

When explaining why he didn’t vote against the compensation plan, in a CNBC interview Buffett said it would be “un-American” to vote against the The Coca-Cola Company (NYSE:KO) management despite saying he “disapproved” of the compensation plan.  In the interview Buffett said it is unusual for a corporate board to vote against a plan brought forth by the compensation committee.

Votes against compensation plans could lead to not being invited to serve on board

“I’ve never heard of a vote against the compensation plan voted by compensation committee,” Buffett said, then made a statement that board members seldom question compensation plans in board meetings but might complain against them outside the official meeting. Voting against an executive compensation plan is “a little bit like belching at the dinner table. You can’t do it too often or you will find you’re eating in the kitchen pretty soon,” he said with a laugh, implying that voting against an executive compensation program would lead to not being recommended for the company’s board of directors.

Buffett has voted for board proposals he disagrees with, some “that didn’t make any sense”

While sitting on a board, did Buffett ever vote for a proposal he disagreed with?  “Sure,” Buffett said with a laugh. “I’ve voted for compensation plans I haven’t agreed with.  I’ve even muttered yes on some things that didn’t make any sense,” said the board member who has a fiduciary obligation to protect shareholder interests and hold company management responsible.

In a humorous moment that reveals truth, CNBC’s Becky Quick’s response might speak for many. “I’m still trying to get my head around this,” she quipped.  David Winters is likely saying the same thing.