The Real Reason Warren Buffett Didn't Stand Up Against Coca-Cola

By Matt Koppenheffer and David Hanson – Apr 30, 2014 at 7:30AM

NYSE: KO

Coca-Cola

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Buffett may have disapproved of Coca-Cola's controversial executive pay plan, but actions speak louder than words, and he didn't speak up against it. Why did he hold his tongue?

Coca-Cola's (KO 0.15%) recent controversial compensation plan for its executives could cost shareholders billions over the next four years, and Warren Buffett's Berkshire Hathaway (BRK.A -0.34%) (BRK.B -0.01%) is the company's largest shareholder. Buffett himself has expressed his lack of agreement with the plan, but when it came time for a vote, he and Berkshire stayed silent, and abstained.

In the following video segment from the show Where the Money Is, Motley Fool financial analysts Matt Koppenheffer and David Hanson look at Berkshire's relationship with Coca-Cola, and whether or not Buffett is deserving of some criticism for the move. Matt admits that he is disappointed not to see Buffett take a more critical stance. However, Matt understands that because Coca-Cola is one of Berkshire Hathaway's largest holdings, any fight with Coca-Cola indirectly impacts his shareholders at Berkshire.

David Hanson owns shares of Berkshire Hathaway. Matt Koppenheffer owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway and Coca-Cola. The Motley Fool owns shares of Berkshire Hathaway and Coca-Cola and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.