Dubbed “Woodstock for Capitalists,” Saturday’s annual meeting of Berkshire Hathaway shareholders revolves around Warren Buffett, the company’s chairman and CEO and a billionaire investor. Here’s a rundown of what happened at the day-long event in Omaha, Nebraska:
Berkshire’s board knows who it would pick as CEO if Buffett died tonight, but the top candidates could change over time, Buffett said. He has no plans to retire.
He spends plenty of time thinking about the future of his company after he is gone, he said. He told shareholders Saturday that he’s confident that the conglomerate will continue to thrive.
The leaders of Berkshire’s roughly 80 subsidiaries and all the operating companies would reject a leader that tried to change the way the company works, he said.
Buffett leads Berkshire with a tiny staff of roughly two dozen at its headquarters, and he largely lets the CEOs of all Berkshire’s subsidiaries make all the operating decisions.
Warren Buffett has pledged to eventually give away all of the Berkshire Hathaway stock that made him one of the world’s richest men, but he doesn’t want to spoil his children.
At Saturday’s Berkshire shareholder meeting, an estate planning lawyer asked Buffett for advice on how his clients should determine how much is too much to leave their children.
Buffett says the size of an inheritance probably isn’t the most important factor in determining what kind of people children grow up to be.
“I think more kids are ruined by the behaviour of their parents than by their inheritance,” Buffett said.
The 82-year-old Buffett says he has been getting more generous as he ages, so every time he revises his will these days he tends to leave more to his children.
And Buffett says he lets his kids read his will each time it’s changed.
GREENHOUSE GAS PROPOSAL:
Berkshire Hathaway shareholders again rejected a proposal to require the company’s utilities to set goals for reducing greenhouse gas emissions. Berkshire owns several utilities through its MidAmerican Energy Holdings subsidiary.
Backers of the measure urged Berkshire officials to take a leading role in reducing utility dependence on coal.
Berkshire CEO Buffett and the board oppose the idea of setting goals for reducing greenhouse gas emissions because it remains unclear how those emissions will be regulated.
Buffett and the board control 39 per cent of the voting power. The proposal gained only 57,569 votes. Berkshire said 598,162 votes were cast against the measure.
Shareholders rejected a similar measure in 2011.
Before facing questions from a crowd of more than 30,000, the 82-year-old Buffett toured the meeting’s 200,000-square-foot exhibit hall. A pack of security guards created a buffer around the “Oracle of Omaha” as he visited displays that sold Berkshire’s See’s Candy, explained BNSF railroad’s virtues and highlighted some of the company’s other 80-plus subsidiaries.
At the See’s booth, Buffett got a lesson in making hand-dipped bonbons. Then See’s manufacturing manager Steve Powell got Buffett to autograph his white uniform coat, demonstrating that employees are nearly as excited about meeting Buffett as shareholders.
“He was right there. Why not? It’s Mr. Buffett,” said Powell, explaining why he asked for the autograph. “He’s wonderful.”
Powell said he’ll probably frame the coat and display it at work when he returns to California.
Dozens of Utah coal miners picketed outside the doors of the annual meeting in downtown Omaha.
The protesters are members of United Mine Workers of America who work at Deer Creek mine near Huntington, Utah. The mine is run by a subsidiary of Berkshire’s MidAmerican Energy Holdings Co.
The union’s contract expired in January. The company and union are negotiating, but disagree on health care coverage and safety checks. The protesters hope to influence Buffett.
Bernie Morris of Price, Utah, stood in the rain with others Saturday to hand out flyers. The 67-year-old Morris said he’s worked for the coal mine for 28 years. He feared that he and his wife won’t be able to afford the monthly health insurance premium the company wants to charge miners and retirees.
Berkshire shareholders should expect decent returns on the newspapers the company has bought in recent years, Buffett said. But he doesn’t expect the papers to generate enough profits to make much difference to Berkshire.
Berkshire has paid cheap enough prices for the newspapers that Buffett expects them to deliver 10 per cent returns every year, but he also expects their earnings will keep declining.
Berkshire has acquired 28 daily newspapers over the past two years.
Berkshire Vice Chairman Charlie Munger pointed out that Buffett made an exception to his usual investing habits for newspapers because he likes them.
‘GANGHAM STYLE’ WARREN:
Buffett again poked fun at himself in the humorous movie that begins the Berkshire Hathaway annual meeting.
A cartoon version of Dancing With the Stars opened the hour-long movie.
Buffett and Munger served as judges on the dance show as representatives of different Berkshire companies competed.
In the end, Buffett and Munger won the competition themselves with their version of “Gangnam Style” dancing.
In a live-action video later, Buffett tried to pull strings to win a part in Arnold Schwarzenegger’s new Terminator movie.
But Schwarzenegger, who once relied on Buffett’s financial advice as California’s governor, decided that Munger would make a much scarier villain.