Berkshire Hathaway Inc (BRKa.N) shareholders on Saturday rejected proposals to have an independent chair replace Warren Buffett, and require his company to disclose more about its climate-related risks and efforts to improve diversity.
Shareholders supported letting Buffett keep both the chairman and chief executive roles by a nearly 6-to-1 margin, Berkshire said at its annual meeting in Omaha, Nebraska.
The National Legal and Policy Center, a Berkshire shareholder, had said it was poor corporate governance for the legendary investor to retain both roles.
Its proposal gained greater attention when Calpers, which invested $460 billion on April 28 and is the largest U.S. public pension fund, expressed support, as it has at other companies.
Berkshire’s board, however, said Buffett should keep both roles. Buffett’s oldest son Howard Buffett, a Berkshire director, is expected to become non-executive chairman when his father is no longer in charge.
By approximately 3-to-1 margins, shareholders also rejected proposals to have the company disclose more about the climate-related risks, greenhouse gas emissions, and diversity efforts in its dozens of businesses.
Berkshire’s board also opposed those proposals, saying its operating businesses already disclosed or appropriately managed environmental risks, and were committed to diversity, equity, and inclusion.
The proposals faced long odds to pass, given Buffett’s control of 32% of Berkshire’s voting power. He owns approximately 16% of Berkshire’s stock.
Berkshire’s slate of 15 people to serve as directors won shareholder approval by an overwhelming margin.
Berkshire Backing Buffett
Berkshire opposes the proposal, saying “Warren Buffett, Berkshire’s CEO, currently has a 32% voting interest in Berkshire. The board believes that as long as Buffett is Berkshire’s CEO, he should continue as board chair and as Berkshire’s CEO.
However, as has been stated on numerous occasions by Buffett in the past, once Buffett is no longer Berkshire’s CEO, a nonmanagement director should be named board chair.
The board agrees with Buffett and accordingly recommends that the shareholders vote against this proposal.”
The 91-year-old Buffett has been chairman and CEO of Berkshire Hathaway since 1970. Charlie Munger has served as vice chairman since 1978.
Berkshire has a dual share class structure with two classes of common stock, with Class B shares holding 1/1,500th of the economic rights of Class A shares and 1/10,000th of the voting rights. Buffett is Berkshire’s largest shareholder, with a 32.0% voting stake and a 16.2% economic interest at the end of 2021.
The billionaire investor also used the meeting on Saturday to reveal major new investments including a bigger stake in Activision Blizzard. While also railing against Wall Street’s excess and addressing the risks to his conglomerate of inflation and nuclear war.
Berkshire Hathaway took a 9.5 per cent stake in the video game maker and built most of that stake after Microsoft agreed to buy the company for $68.7bn.
Berkshire had previously disclosed owning a much smaller Activision stake, purchased by one of the portfolio managers who help Mr. Buffett invest Berkshire’s money.
Mr. Buffett said Berkshire, long faulted for holding too much cash, boosted its combined stakes in oil company Chevron and “Call of Duty” game maker Activision Blizzard nearly six-fold to more than $31bn.
The meeting on Saturday was Berkshire’s first welcoming shareholders since 2019 before Covid-19 derailed America’s largest corporate gathering for two years.
Mr. Buffett said it “really feels good” to address shareholders in person, after holding the last two meetings without them. Attendees included JP Morgan Chase chief executive Jamie Dimon and the actor Bill Murray.