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In this May 8, 2013 file photo, Coca-Cola CEO Muhtar Kent speaks during a news conference in Atlanta.

David Goldman/The Associated Press

Coca-Cola Co., facing criticism from Warren Buffett and other investors for its outsized employee share rewards, said it had adopted new guidelines that would limit its stock compensation plan and improve transparency.

The company said its new guidelines would extend the number of years award shares will last, formalize its practice of share repurchases to minimize dilution and renew commitments to open dialogue with shareholders on compensation matters.

About 83.16 per cent of shareholders voted for the company's 2014 equity plan when it came up for renewal in April, according to a Coca-Cola filing following the company's annual meeting.

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However, the approval figure included a significant number of shareholders who had abstained from the vote, according to Reuters calculations.

Mr. Buffett, whose Berkshire Hathaway Inc. holds 9.1 per cent of Coca-Cola and is the company's biggest shareholder, was among those who abstained.

The billionaire said in an interview with Bloomberg that while he considered the plan to be "excessive" he did not vote against it out of loyalty to the company.

But it has been Wintergreen Advisers, which owns less than 1 per cent of Coca-Cola on behalf of clients, which has been the most vocal critic of the company's equity plan, saying it greatly diluted the holdings of current shareholders.

"Coca-Cola has finally conceded that the equity compensation plan it put to a vote of shareholders in April was outrageously excessive and inconsistent with past plans," Wintergreen Chief Executive David Winters said in an emailed statement on Wednesday.

"No amount of backtracking by the Coca-Cola board of directors can hide the fact that we believe it tried to sneak one by shareholders in Coca-Cola's proxy materials and statements at the April shareholder meeting," he added.

Wintergreen said in September that proxy filings with the Securities and Exchange Commission showed that funds managed by State Street Corp., Fidelity Investments and Capital Group voted against the plan.

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"It looks to be a very unique approach to tell shareholders how the shares under this equity plan will be used with a great deal of responsibility, while addressing the criticisms about the plan from Berkshire as well as the other shareholders," Frank Glassner, chief executive of Veritas Executive Compensation Consultants, told Reuters.

Under the new guidelines, Coke's compensation committee will limit the grants under the equity plan to an annual "burn rate" of no more than 0.8 per cent in 2015. The burn rate refers to the number of shares granted as a percentage of outstanding shares.

The guidelines will also facilitate a shift towards performance shares and be less heavily weighted toward stock options.

"We consider the shift positive in that it means lower "automatic" payout of equity," Stifel analysts wrote in a note.

Coca-Cola said it expected shares authorized under the equity plan to last the full term of 10 years.

Coca-Cola shares were down 0.3 per cent at $42.55 in early afternoon trading on the New York Stock Exchange.

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