FORTUNE — Warren Buffett called Coca-Cola’s (KO) controversial compensation plan excessive, but said he declined to vote against it.
The plan — which will pay Coke managers generously with shares of the company if they achieve specific performance goals — passed on Wednesday at Coke’s annual meeting, but without Buffett’s help. Buffett said he abstained in the vote. Berkshire Hathaway (brka), Buffett’s insurance conglomerate, is one of the largest owners of Coke’s stock, with a little over 9% of the company’s shares.
The fact that Buffett didn’t vote against Coke’s plan, though, is noteworthy. Over the years in his annual letters, Buffett has called various stock option plans unfair. In his 1985 annual letter, Buffett called stock options a fundamentally unfair deal for shareholders, “equitable only by accident,” and a compensation plan for “managerial Rip Van Winkles looking to take a doze.”
In 1994, Buffett called stock options “free lottery tickets.”
And in 2006, he said that the only way to change excessive executive compensation was for large shareholders like himself to demand a “fresh” start.
Yet, Buffett’s lack of a no vote on Coke’s plan is unlikely to achieve that. Coke’s plan boosted the number of options granted to top executives by 20%. Coke has countered that those options would only be paid out if the company hits tough performance measures. But by my math, Coke’s returns could fall by 10% a year for the next three years, and the company’s executives would still be entitled to collect billions under the plan. David Winters, another large Coke shareholder, had pushed for the plan to be rejected and lobbied Buffett to vote against it as well.
All told, including Buffett’s abstain, a little over a third of Coke’s shareholders did not approve the option plan, which is high level of disapproval as proxy votes go. (UPDATE: It’s actually worse. Once you count in absentee votes less than 50% of shareholders voted for the plan.)
In an interview with CNN’s Poppy Harlow, Buffett said he told Coke’s management that he disagreed with the plan but only after it was approved by the board and set to shareholders. Buffett said that his son Howard, who is on Coke’s board, voted with the rest of the board to approve the pay plan, but that didn’t surprise him. He said corporate boards, which are supposed to be pay watchdogs, generally are not. “The [compensation committee] comes in and says here’s what we did, and they don’t give you any details it’s just an overall,” Buffett told Harlow. “And does anyone stand up and say no no I object? I have never seen it happen.”
A Coke spokesperson said in a statement.“The Coca-Cola Company Board respects Mr. Buffett’s philosophical stance on equity-based compensation. As our largest shareowner, Mr. Buffett is an avid supporter of the Company and its management team, and has been a wonderful counselor through the years.”
Speaking after a charity lunch on Wednesday at New York steakhouse Smith & Wollensky — which raised money for the GLIDE foundation, an organization that fights poverty and homelessness in San Francisco — Buffett said he disagreed with Coke’s options plan, but declined to vote against it because he still likes the company and believes in its management. He said he had no plans to sell the stock.