Berkshire rejects shareholder call to replace Warren Buffett as chairman
 

[March 11, 2022]  By Jonathan Stempel

(Reuters) - Berkshire Hathaway Inc on Friday urged the rejection of four shareholder proposals recommending that it replace Warren Buffett as chairman, report on its plans to handle climate risk and reduce greenhouse gases, and improve diversity.

The company, run by Buffett since 1965, also said the 91-year-old received $373,204 in compensation for 2021, down from $380,328 a year earlier, comprising his usual $100,000 salary plus personal and home security.

Though Buffett's salary is low for a chief executive officer of a major company, his 16.2% Berkshire stake comprises most of his $117.9 billion net worth, which Forbes magazine said makes him the world's fifth-richest person.

Berkshire disclosed Buffett's pay and recommendations on shareholder proposals in its annual proxy filing, ahead of the Omaha, Nebraska-based company's April 30 annual meeting.

It also said Vice Chairmen Greg Abel and Ajit Jain, who respectively oversee Berkshire's non-insurance and insurance operations, were in 2021 each awarded $19 million for a third straight year. Buffett sets their pay.

Berkshire has said Abel would become CEO and Buffett's son Howard Buffett would become non-executive chairman if Warren Buffett could not continue in those roles.

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, U.S., May 4, 2019. REUTERS/Scott Morgan

One shareholder proposal, from the National Legal and Policy Center, said those roles are "greatly diminished" because Buffett holds both, weakening governance, and an independent director should become chairman.

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

In urging rejections of the environmental proposals, Berkshire said many operating units already make disclosures concerning climate risks, and its insurance operations appropriately manage risks from greenhouse gases.

It also said its operating businesses have committed to diversity, equity and inclusion without needing direction from Buffett.

Berkshire's dozens of business units include Geico car insurance, the BNSF railroad, Berkshire Hathaway Energy, Brooks running and See's candies, among others.

Buffett controls 32.1% of Berkshire's voting power. Shareholder proposals he opposes normally fail by big margins.

Berkshire's share 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)

[© 2022 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.