(Adds context, board, Wintergreen quotes)
By Anjali Athavaley
March 12 (Reuters) - Coca-Cola Co said on Thursday its chief executive declined a $2.5 million bonus in 2014 while other top-level employees received lower-than-expected compensation as the world's largest soda maker struggles to boost revenues amid sluggish demand for soft drinks.
While Chief Executive Officer Muhtar Kent's total compensation, which includes salary, stock options and changes in pension value, rose 23 percent to $25.2 million from the previous year, he didn't take an annual bonus because of "difficult but necessary decisions" taken to accelerate sales.
Excluding a $7.1 million change in pension value, his actual remuneration was $18.1 million, down slightly from $18.2 million the previous year.
Coke has struggled to increase sales as consumers in developed markets shift from soda to healthier options. Carbonated soft drink sales have been declining for nearly a decade in the United States, according to the trade publication Beverage Digest.
Coke has diversified into faster-growing areas such as tea and energy drinks and announced cost-cutting plans at the end of 2014 to eliminate 1,600 to 1,800 positions as it aims to save $3 billion by 2019.
"While we saw a number of positives in 2014, the company's performance was not up to our high expectations," Coke's board said in a letter to shareholders on Thursday. "This performance is directly reflected in compensation decisions and how prior awards pay out."
Coke shares were up 1.6 percent at $40.40 in Thursday afternoon trading.
Last year, the company faced criticism from Warren Buffet and other investors for its executive compensation plan. Its most vocal critic, David Winters of Wintergreen Advisers, which owns less than 1 percent of Coke, said the plan was dilutive to shareholders.
In a statement on Thursday, Wintergreen called for the board to replace Kent, saying "it's encouraging to see that the Coca-Cola board is beginning to take a tougher line with management."
The company said in October it had adopted new guidelines limiting executive pay plans starting in 2015 and shifting away from stock options in favor of performance shares and cash awards. On the company's most recent earnings call in February, Kent said that compensation would be tied to revenue.
According to the company's proxy filing, long-term incentives are now tied to net revenue growth for individual business units. Meanwhile, net revenue and profit before tax growth have been added as metrics to determine annual bonuses. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Joyjeet Das, Jonathan Oatis and Alan Crosby)