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Berkshire’s shareholders look beyond Buffett



(Reuters) – Berkshire Hathaway Inc. shareholders are facing a question that Warren Buffett tried to address at the company’s annual meeting: How will Berkshire cope when he is no longer around?

Mr. Buffett, perhaps the world’s biggest investor, and with the star power to attract fans from all over the world, is 91. His longtime vice president, Charlie Munger, is 98.

Shareholders who saw them speak for hours on Saturday at the CHI Health Center Arena in Berkshire’s hometown of Omaha, Nebraska, face the reality they are in the twilight of their careers.

Still, Mr. Buffett’s loyal investors believe that they will continue to hold on to Berkshire, citing the honesty, humility, integrity and trust that they believe his company and its leadership, current and future, embody.

“The company is more than Mr. Buffett,”

; said Ernesto Medina, a pastor from Omaha. “It’s really about people agreeing on a certain set of values ​​and ethics. And they are not changing. You know – or at least I hope so.”

Berkshire, whose dozens of companies include the BNSF railway, Geico car insurance and many energy, manufacturing and retail companies, has a succession plan in place.

Greg Abel, 59, a vice president who oversees non-insurance activities, would replace Mr. Buffett as CEO when the need arose, while Vice President Ajit Jain, 70, was likely to continue to lead the insurance business.

Mr. Buffett’s eldest son, Howard, would become non-executive chairman. And Mr. Buffett’s portfolio managers Todd Combs and Ted Weschler would take over investments.

When asked by a shareholder how Berkshire can change over time, Mr. Buffett that its building blocks will survive him.

“You have a board that understands that our culture is 99.9% of running the business,” he said. “If we have the same culture, we will be here in 100 years.”

Mr. Buffett promised that Berkshire would maintain its “special relationship” with shareholders and is built to last.

“There is no end point,” he said. “No one is waiting to retire or have their option earned or thinking ‘I’ll take another job.’ People do what they want.”

Mr. Buffett acknowledged that there may be changes in the way Berkshire operates, noting his own autonomy in making big decisions.

“In a crazy way, I see Berkshire as a painting, and it’s unlimited in size,” said Mr. Buffett. “It has an ever-expanding canvas, and I can paint whatever I want.”

Mr Buffett said Abel, on the other hand, could face more questions and restrictions from other board members because they know him less well.

“They do not have to, but they will feel they have to,” said Mr. Buffett.

Berkshire could also face more pressure to do better when it comes to environmental and diversity issues and corporate governance.

Mr. Buffett has fiercely resisted shareholders’ demands for improvements, a battle that some analysts see as easier to win in an era after Buffett.

This is because Mr. Buffett still controls 32% of Berkshire’s votes, despite owning only 16% of his shares. He has already given away half of his shares in Berkshire to philanthropy.

On Saturday, shareholders rejected proposals to improve the disclosure of climate-related risks and diversity efforts and install an independent chair to replace Mr. Buffett in that role.

This year’s shareholder weekend, the first since 2019, was a stripped-down deal, probably due to the pandemic.

Buffett said about 12,000 people attended Friday’s shareholder shopping day for discounts from Berkshire-owned companies, down from the 16,188 reported by the Omaha World-Herald for 2019.

The shareholder reception at Borsheim’s jewelery was limited to the store, cut off from the parking tent with live music and a buffet.

And even Saturday’s annual meeting, normally full, seemed to have a couple of thousand empty seats when it started.


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