Coca-Cola is engaged in an aggressive campaign to counter statements made by activist investor David Winters. The firm contacted ValueWalk to counter statements made by Winter, saying Winters has overstated his case and pointing out the goal of the Coke board fully backs the compensation plan and the goal is to “encourage employees to act like owners.”

Coca Cola Coke

As reported Tuesday morning, Activist investor David Winters’ fight with The Coca-Cola Company (NYSE:KO)’s board of directors over management compensation just received a new ally in the Ontario Teachers Pension Plan.  Winters had said that Coca-Cola was engaged in an “informational shell game.”

Winters takes facts “out of context”

For its part, Coke points out that Winters has “taken out of context” facts used to support his claim that the plan will dilute shareholders by 16.6% of the company value, ignoring the company’s share repurchase program in the calculation. In 2013 they note that they repurchased $4.8 billion of stock, $1.3 billion of which was related to employee stock options, facts they had previously noted.

Company says calculation inaccurate

Coke also points out that Winters did not calculate the number of employees who do not take stock options, which are granted in 10 year terms.  Employees who do not stay with the company for the term of the contract to receive options are not included in the dilutive impact, and the plan is in line with past plans approved by the board and shareholders.

“We can find no reasonable basis for gifting management 14.2% of the share capital of The Coca-Cola Company (NYSE:KO), worth $24 billion at today’s share price,” Winters said in a statement last week. “No matter how well a management team performs, it is unfathomable that they would require such astronomical sums of money to provide motivation.  Twenty-four billion dollars is a lot of money, by anybody’s standard.”

Incentive plan not just for senior management

A key issue with Winter’s attack on the beverage company is that the plan is not limited to senior management, as Coke says approximately 6,400 employees throughout the organization are eligible to participate.  Coke had initially responded on March 28 to Winter’s statements.