Warren Buffett on Coca-Cola Compensation, IBM, and Activist Investing

Buffett explains his abstention on Coca-Cola's compensation plan, calling the 500 million share authorization (or 340 million adjusted for non-option shares on 5:1 basis) excessive compared to historical precedent. Previous plans: 240M shares in 2002 (lasted 6 years), 280M shares in 2008 (lasted 6 years). This plan was for only 4 years. He spoke privately with management before abstaining, emphasizing his love for Coke while maintaining his voting responsibility as an owner.

Buffett defends IBM's Q1 results, noting they weren't surprising as they matched guidance given 3 months earlier: ~$2.50 earnings, ~$1B charge for layoffs, 2% revenue decline (currency neutral). Hardware division remains a drag. On cloud computing shift, Buffett acknowledges it's affecting everyone in tech and the outcome is uncertain. IBM is competing but it's 'not over with yet.' He won't invest directly in cloud - feels he doesn't 'bring anything to' that game, though he's indirectly exposed through IBM.

Despite equities being near all-time highs after turbulent month, Buffett expresses complete satisfaction with Berkshire's $100B+ equity portfolio. He has 'no feeling we should be selling' any of it. When asked about high-value sectors, he deflects: 'If there were I wouldn't be talking about them probably.'

When asked about activist investors like Ackman and Icahn, Buffett uses his farm and apartment house analogies: what matters is what the asset produces, not market activity. 'If I own stocks I own parts of businesses what I'm concerned about is how those businesses do over time.' He pays attention to markets only when prices become interesting for buying. Stock price movements tomorrow or activist campaigns are irrelevant. What increases shareholder value is 'businesses earning better returns on capital in the future' - investors should 'pretend there is no stock market.'

Asked about tech bubble concerns, Buffett sees no big bubble currently. Contrasts with late 1990s when 'people were going a little crazy they were buying things they didn't understand at all and that maybe we're never going to do anything.' Current market doesn't have that 'bubble mentality' though he can't speak to individual stocks. Pragmatically notes: 'We could get there and we will get there someday.'