Warren Buffett told shareholders that Berkshire abstained in a vote over Coca-Cola's controversial executive pay plan because he didn't "want to go to war" with the company but did want to express his unhappiness with a plan he called "excessive."
Speaking before roughly 38,000 shareholders at Berkshire Hathaway's annual meeting in Omaha, Buffett said abstaining was the "most effective way" for him to make a "clear statement" opposing the plan. "I don't think going to war is a very good idea in most cases."
Buffett said there's a social dimension to being on a board. Even "independent" directors aren't really all that independent because they often want to keep a prestigious job that pays well and has relatively few duties.
When choosing board members, "They do not look for Dobermans. They look for Cocker Spaniels and then they make sure their tails are wagging."
In addition, Buffett said that if someone on a board votes against proposals that person would lose influence with fellow directors. "If you keep belching at the dinner table, you'll be eating in the kitchen."
Buffett said he didn't remain totally silent about his opposition. He said he met with Coke CEO Muhtar Kent before the vote and told him Berkshire would abstain, and publicly spoke on CNBC about his opposition to the plan immediately after Coke announced it had been approved by 83 percent of the share voted.
Buffett also said he disagreed with activist investor David Winters' argument on the extent of the plan's dilution of existing shareholders, making him even less willing to join Winters in a "war" against the company.
Buffett told CNBC on Thursday that he believes Coke will be responsive to shareholder concerns about the plan and he wouldn't be surprised if there's a revision before the plan goes into effect next year.
Berkshire owns 400 million shares of Coca-Cola, just over 9 percent of the shares outstanding.
Buffett criticized a staple of corporate governance reform: the government's requirement that corporations publish the salaries of their highest paid executives. It "very seldom" helps shareholders, he said, because it just provides "jealous" CEOs more ammunition to push for more money so they don't fall behind. "There's no CEO who looks at proxy statements and comes away thinking they should be paid less... It is only human to look at a whole bunch of proxy statements and say, I'm worth a lot more than that guy."
He also said pay disclosures should not be expanded from executives to include a company's top earners.
Charlie Munger, Buffett's longtime business partner, added, "Envy is doing the country a lot of harm. We take actions to dampen envy."
Buffett's salary as Berkshire CEO is $100,000 a year. He suggested his successor will get a bigger paycheck. "They're certainly entitled to be paid a lot... I'm going to write about that very question next year in the annual report."
Buffett rejected the idea of moving Berkshire's headquarters overseas because U.S. taxes are too high. He said that while Berkshire doesn't give the government more than it needs to, it does not "begrudge" paying taxes. "We've made a lot of money while paying U.S. taxes."
Munger added, "I think it would be crazy to be as prosperous as Berkshire and get our tax to zero."
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—By CNBC's Alex Crippen. Follow him on Twitter: @alexcrippen (Reuters contributed to this report.)