Shareholder Call to Replace Warren Buffett as Chairman Rejected by Berkshire

On Friday, Berkshire Hathaway Inc. urged the rejection of four shareholder proposals recommending that it replace 1) Warren Buffett as chairman, 2) report on its plans to handle climate risk and 3) reduce greenhouse gases, and 4) improve diversity.

Buffett's company said that the 91-year-old received $373,204 in compensation for 2021, down from $380,328 a year earlier. This comprised his usual salary of $100,000 plus personal and home security payments.

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

Berkshire Hathaway disclosed Warren 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.

Berkshire Hathaway Vice Chairmen Greg Abel and Ajit Jain were each awarded $19 million in 2021 for a third straight year. This pay is set by Buffett himself.

If Warren Buffett cannot continue in his roles as CEO and Chairman of Berkshire Hathaway, then Abel would take over as CEO and Howard Buffett would take over as non-executive chairman.

One shareholder proposal, from the National Legal and Policy Center, said that Buffett's dual role as chairman and CEO diminishes governance. The proposal suggests that an independent director should become chairman.

The filing said that Berkshire's directors agree that Buffett should step down as CEO, but only after he is no longer able to do so.

Berkshire Hathaway said many of its operating units already disclose climate risks, and that its insurance operations are appropriately managing those risks.

The company said that it's operating businesses do not need to receive direction from Warren Buffett in order to continue on their commitments to diversity, equity and inclusion.

Berkshire Hathaway is a conglomerate with dozens of business units, including GEICO car insurance, the BNSF railroad, Berkshire Hathaway Energy, Brooks Running and See's Candies.

Buffett controls 32.1% of Berkshire's voting power, and shareholder proposals he opposes usually fail by big margins.

Berkshire's stock price increased by 9% this year, while the Standard & Poor's 500 index decreased by 12%.

Adapted from Reuters, March 11, 2022

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