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Warren Buffett Boosts IBM Stake, Calls Coca-Cola Equity Plan 'Excessive'

NEW YORK (TheStreet) - Warren Buffett told CNBC on Wednesday he has increased his investment in IBM (IBM - Get Report) and he abstained from supporting a multi-year compensation plan floated by Coca-Cola (KO - Get Report) in the soda giant's 2013 annual proxy.

Buffett said he has increased his investment in IBM to a little over $13 billion, after the IT software and services giant continues to post declining revenue and lackluster earnings. "I have never sold a share in IBM," Buffett told CNBC when asked to comment on a rumor that he'd soured on one of Berkshire Hathaway's (BRK.A) so-called 'big four' investments.

When Buffett took an over $10 billion stake IBM in late 2011, the billionaire investor said he was supportive of a multi-year share buyback plan put in place, and would benefit if the company's share performance stagnated. That's proven to be the case.

After exceeding $200 a share, IBM's stock performance has tailed off. Shares have gained less than 1% in the past 12-months, excluding dividends, under-performing the Dow Jones Industrial Average.

Must Read: David Einhorn Closes Chipotle Short After Losses

No Vote on Coke's Comp

Buffett also told CNBC he abstained from voting in favor of a four year compensation plan put forward by Coca-Cola, another large investment of Berkshire Hathaway.

Because Buffett supports Coca-Cola CEO Muhtar Kent and his son, Howard Buffett, sits on the company's board of directors, Berkshire did not vote against the compensation plan.

Wintergreen Advisors, a little known investment fund, criticized the equity plan and stated in March it amounted to 14.2% of Coca-Cola's equity capital. In April, the fund wrote a letter addressed to Buffett advising him to vote against the plan.

In a press release sent via Berkshire-owned BusinessWire, Wintergreen said "if the proposed 2014 Coca Cola Equity Plan were to be approved by its shareholders, the implication for investment returns in our country may be devastating."

Buffett, on Wednesday, called the plan "excessive" and said he hopes that such stock payments would last far longer than four years.

-- Written by Antoine Gara in New York.

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KO $41.08 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%

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