When Warren Buffett said that The Coca-Cola Company (NYSE:KO)’s compensation plan was excessive (seemingly siding with David Winters of Wintergreen Advisers) but that he wouldn’t vote against it, it surprised a lot of people. Joe Nocera at the New York Times wrote an op-ed sharply criticizing Buffett. Then, a week later, he wrote another one calling Buffett “cowardly and hypocritical,” but he didn’t get all of his facts right.
Nocera’s op-eds made multiple factual mistakes
“The whole column is based on an incorrect fact – one that could easily have been checked, and wasn’t,” Buffett wrote, prompting a response from NY Times public editor Margaret Sullivan.
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Nocera returned to the topic because he read a second interview on Fortune that he believed showed Buffett was changing his stance on the The Coca-Cola Company (NYSE:KO) compensation plan, but the Fortune interview didn’t happen later, it just came out later because it was for a print magazine instead of television. Add in a couple of other incorrect assertions in Nocera’s first op-ed, and the whole thing starts to look like a poorly reported diatribe on executive compensation. Sullivan thought that Nocera should directly address these mistakes in a future op-ed, but he didn’t think there was much point.
Both columns do have corrections at the end (although, oddly, Nocera’s statement that Buffett is on the The Coca-Cola Company (NYSE:KO) board isn’t part of the correction), but it doesn’t look like Nocera is going to explain how the errors came about.
Buffett’s abstention, and relationship with the board, got results
Even if you look past these factual mistakes, Nocera also dismissed Buffett’s explanation that an abstention from your largest shareholder is meaningful, arguing that Buffett should have made his opinion known by voting against it.
But it turns out that The Coca-Cola Company (NYSE:KO) got the message loud and clear. They have already said that the compensation plan is flexible, and they might scale back the plan. It was surprising to hear that Buffett has never seen a compensation plan voted down in his decades of investing, and that he has often voted in favor of plans that he disagreed with, but both of those things happened alongside what is arguably the most impressive investment track record in history. He didn’t accomplish that by doing what people expected.