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Berkshire rejects shareholders’ call for Warren Buffett to be replaced as chairman

Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc.'s annual shareholder meeting in Omaha
Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, the United States May 4, 2019. REUTERS/Scott Morgan

March 11, 2022

By Jonathan Stamp

(Reuters) – Berkshire Hathaway Inc on Friday called for the rejection of four shareholder motions that recommended replacing Warren Buffett as chairman, reporting on its plans to manage climate risks and reduce greenhouse gases and improve diversity.

The company, which Buffett has run since 1965, also said the 91-year-old received $373,204 in compensation for 2021, compared to $380,328 last year, which includes his usual $100,000 salary as well personal safety and home security.

Though Buffett’s salary is low for a CEO at a large company, his 16.2% stake in Berkshire makes up the bulk of his $117.9 billion net worth, making him the fifth richest person in the world, according to Forbes magazine .

Berkshire announced Buffett’s salary and recommendations on shareholder proposals in its annual proxy statement ahead of the Omaha, Nebraska-based company’s annual meeting on April 30.

It also said that vice chairs Greg Abel and Ajit Jain, who respectively oversee Berkshire’s noninsurance and insurance businesses, each received $19 million in 2021 for a third straight year. Buffett sets their pay.

Berkshire announced that Abel would become CEO and Buffett’s son, Howard Buffett, would become non-executive chairman if Warren Buffett were unable to continue in those roles.

A shareholder proposal from the National Legal and Policy Center said those roles are “severely limited” because Buffett holds both, which weakens governance, and an independent director should become chairman.

According to the filing, Berkshire’s directors agree it’s a good idea, but only after Buffett is no longer CEO.

Berkshire pushed for rejection of the environmental proposals, saying many operating units already disclose climate-related risks and their insurance businesses adequately manage greenhouse gas risks.

It also said its operations are committed to diversity, equity and inclusion without needing direction from Buffett.

Berkshire’s dozens of business units include Geico auto insurance, BNSF railroad, Berkshire Hathaway Energy, Brooks Running, and See’s Candys, among others.

Buffett controls 32.1% of Berkshire’s voting rights. Shareholder proposals that he rejects typically fail by a wide margin.

Berkshire’s stock price is up 9% this year, while the Standard & Poor’s 500 is down 12%.

(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)

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DUSTIN JONES

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