Coca-Cola pours cold water on executive stock plan by Phil Wahba @FortuneMagazine 12:31 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Coca-Cola KO has given in to criticism from investors, including Warren Buffett, and is scaling back its executive equity compensation plan. The beverage company’s new guidelines for a plan already approved by shareholders at the annual meeting earlier this year mean it will issue fewer stock awards each year, addressing concerns that the plan would dilute their investments and was too generous. Coke will also replace equity awards for lower-level executives with cash bonuses, and replace stock options with shares tied to performance as the main form of long-term equity compensation for its executives. The change is a win for Wintergreen Advisers LLC, a firm run by activist investor David Winters, who despite a tiny stake in Coke, has loudly agitated against the stock-compensation plan, saying it was a “raw deal” for investors. Winters, whose firm holds 2.5 million Coke shares, or 0.06%, had said that Coke’s plan could could dilute shareholders by up to 16.6%. Warren Buffett’s Berkshire Hathaway BRK.A , Coke’s largest shareholder, also criticized the plan, saying in April, it was “excessive,” but abstained from voting on the plan at Coca-Cola’s annual meeting in April, citing loyalty to the company. The plan breezed through but with all the abstentions, fewer than half of Coke’s outstanding shares were voted. Buffett owns 9.1% of Coke’s shares. (Wintergreen sold its shares in Berkshire in August in anger at Buffett’s inaction on the Coke compensation plan. Many were surprised at Buffett’s stance given that he has often slammed executive stock plans as being tantamount to giving away winning lottery tickets.) The number of shares Coke will grant as a percentage of total outstanding stock will be no more than 0.8 percent in 2015 and an average of 0.4 percent for the remainder of the 10-year plan. (That compares to 1.4% so far in 2014, according to the Wall Street Journal.) Coke also said it would formalize its current practice of share repurchases to lower the impact of dilution, and that it was renewing its commitments to “an open dialogue” with investors on compensation issues. “Further to the approval of the 2014 Equity Plan in April of this year, we have developed Guidelines that further align compensation to the long-term interests of shareowners,” said Muhtar Kent, Coke’s CEO, in a statement. Coke will give performance-related shares (stock given to an executive for meeting certain goals) more weight in the long term awards, moving the ratio to two-thirds shares, one-third stock options, by 2016, compared to 60% in options and 40% in performance-shares now.