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Buffett's Berkshire taps former AmEx CEO for board, as Bill Gates steps aside
[NEW YORK] Warren Buffett's Berkshire Hathaway said on Friday that former American Express chief executive officer (CEO) Kenneth Chenault has been nominated to the conglomerate's board of directors, replacing Microsoft co-founder Bill Gates.
The change was disclosed in Berkshire's annual proxy filing, ahead of its scheduled May 2 annual meeting.
Mr Chenault, 68, led New York-based American Express from January 2001 to February 2018, and became one of the most prominent black CEOs in corporate America.
Berkshire knows Mr Chenault well, having long been American Express' largest shareholder, and ending 2019 with an 18.7 per cent stake in the travel and financial services company.
Mr Gates, 64, has known Mr Buffett since 1991 and been a Berkshire director since 2004, but now devotes most of his attention to philanthropy, including the Bill & Melinda Gates Foundation.
He is also the world's second-richest person, worth US$103.6 billion according to Forbes magazine. Mr Buffett ranks fourth, at US$76 billion.
"I have made the decision to step down from both of the public boards on which I serve – Microsoft and Berkshire Hathaway – to dedicate more time to philanthropic priorities including global health and development, education, and my increasing engagement in tackling climate change," Mr Gates said in a LinkedIn blog on Friday.
Microsoft announced separately on Friday that Mr Gates stepped down from its board.
In Friday's filing, Berkshire also recommended that shareholders reject a proposal by four New York City public pension plans that lists of outside candidates for board seats include "qualified female and racially/ethnically diverse candidates".
Three members of Berkshire's 14-person board are women, and Mr Chenault would become the only black director.
Berkshire said it has for decades "forcefully" preferred directors with integrity, business savvy, an owner-responsive mindset and a deep personal interest in the company.
It said Mr Chenault emerged as a "standout and unanimous choice" after its governance committee reviewed 23 candidates for board seats last year.
Berkshire said it may choose future board members from that list, noting that four directors, including Mr Buffett, are between 89 and 96 years old.
The proxy filing also detailed compensation for top Berkshire executives in 2019.
Mr Buffett was awarded US$374,773, including his usual US$100,000 salary plus US$274,773 for personal and home security services.
Vice chairmen Greg Abel, 57, and Ajit Jain, 68, who respectively oversee Berkshire's non-insurance and insurance operations, were each awarded US$19 million, up from US$18 million in 2018.
Mr Buffett sets compensation for Mr Abel and Mr Jain, who many investors view as top candidates to eventually succeed him as CEO. Berkshire does not grant stock options.
While Berkshire's annual meeting will be held as scheduled, the coronavirus pandemic prompted Mr Buffett on Friday to cancel other shareholder events in Omaha for the May 1-3 weekend.