Warren Buffett's Berkshire Hathaway rejects call for silence on hot-button issues

Berkshire Hathaway, run by billionaire Warren Buffett, on Friday (Mar 17) urged shareholders to reject proposals that it avoid discussing hot-button social and political issues, and competing proposals that it disclose more about its climate change and diversity efforts.

The Omaha, Nebraska-based company also urged the rejection for a second straight year of a shareholder proposal that Buffett, 92, let someone else be chairman, while remaining chief executive.

Berkshire’s recommendations were disclosed in its annual proxy filing, ahead of its May 6 annual meeting.

It also said Buffett received US$401,589 in compensation for 2022, up 8 per cent from 2021, comprising his usual US$100,000 salary plus personal and home security.

While Buffett’s salary is low, his 15.6 per cent Berkshire stake comprises most of his US$101.6 billion net worth, which Forbes magazine said makes him the world’s sixth-richest person.

The proposal to restrict Berkshire’s speech came from the American Conservative Values ETF, which said Berkshire and its dozens of operating units should “avoid supporting or taking a public position” on controversial social and political issues unless their businesses required it.

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In opposing the proposal, Berkshire said its decentralised structure lets those units operate with minimal involvement from Buffett and his top lieutenants, and it was “inconsistent with Berkshire’s culture” to dictate what not to say.

Shareholder proposals that Buffett opposes normally fail by big margins because he still controls 31.5 per cent of Berkshire’s voting power, despite having donated more than US$46 billion of Berkshire stock since 2006.

Berkshire’s more than US$60 billion of stock repurchases since the end of 2019 helps preserve Buffett’s voting power.

Proposals last year on climate change and diversity won support from only about one-quarter of votes cast, while just 11 per cent supported replacing Buffett as chairman.

The proxy filing also said vice-chairmen Greg Abel and Ajit Jain, who respectively oversee Berkshire’s non-insurance and insurance operations, were in 2022 each awarded US$19 million for a fourth straight year.

Buffett sets their pay. Abel would become chief executive and Buffett’s son Howard Buffett would become non-executive chairman if Warren Buffett could not continue.

Berkshire’s businesses include Geico car insurance, the BNSF railroad, Berkshire Hathaway Energy, Dairy Queen, Fruit of the Loom and many others. REUTERS