Yesterday, Coca-Cola director Barry Diller attempted to offer an explanation for the controversy over Coke’s equity compensation plan. He says shareholders didn’t read the fine print. The trouble is that his explanation does not square with the facts.

Here’s what Mr. Diller said when asked about the Coke equity plan on CNBC’s “Squawk Box” yesterday:

“It’s weird. What happened is that Coca-Cola had a compensation plan that had been in place for a very long time. They had to renew the plan. The rules said that they had to say that X number of shares would be given over a four-year period, right? Coca-Cola had no intention of giving them over a four-year period. They were going to give them over at least ten and maybe a twenty year period. But if you took the four-year period and didn’t read underneath it and understand it, that it wasn’t an obligation, you would have said Coke was giving away all this stuff to employees and looting shareholders when in fact Coke’s dilution is under 1% which is standard for companies, etc. It was all blown to hell. It was not, it should have been better explained, and Coke learned a lesson. It should have explained it in more detail at the outset.”

Here’s what Coke’s 2014 Proxy Statement actually says:

“Based on historical granting practices and the recent trading price of the Common Stock, the 2014 Plan is expected to cover awards for approximately four years.” (pg. 85)

“Approving the 2014 Plan would [allow] the Company to continue to grant long-term equity compensation for approximately four years.” (pg. 84)

It’s troubling that Mr. Diller – who has been on the Coke board for 13 years and is a member of its Corporate Governance committee – apparently doesn’t understand what the 2014 Proxy Statement actually said.

We would agree with him about one thing, though: Coke should have explained its equity compensation plan better. Of course, had Coke done so, even more shareholders might have agreed with us (and with Warren Buffett, on behalf of Coke’s largest shareholder) that the equity compensation plan was excessive.