Berkshire's board opposes two shareholder proposals

Berkshire Hathaway's board of directors is recommendating the rejection of two shareholder proposals scheduled to be presented at May's annual meeting.

This week's proxy statement says California Public Employees Retirement System (“CalPERS”), Federated Hermes, and Caisse Et Placement Du Quebec (“CDPQ”) plan to call on the company to publish an "annual assessment addressing how the Company manages physical and transitional climate-related risks and opportunities."

The company says its board "recognizes the importance of responsibly managing climate-related risks," but argues that Berkshire's subsidiaries, which operate with very little oversight from corporate HQ, are already "making sound climate-related decisions," making a corporate-level report unnecessary and "inconsistent with Berkshire's culture."

A second proposal from As You Sow on behalf of Handlery Hotels Inc. asks that Berkshire's holding companies "annually publish reports assessing their diversity and inclusion efforts," including 'quantitative, comparable data to understand the effectiveness" of the those efforts.

Again, Berkshire says it "agrees that a diverse, equitable and inclusive workforce has been and will continue to be an important aspect of the success and long-term sustainability of companies."  Noting that three women and two "ethnically diverse" members serve on the board, the company says Buffett has "set the 'tone at the top' ... for over 50 years."

But it says that since Berkshire's companies "represent dissimilar industries operating in multiple locations throughout the world ... it would be unreasonable to ask for uniform, quantitative reporting for the purposes of comparing such dissimilar operations in different geographic locations."

And, as it argued in its response to the first proposal, Berkshire says this one goes against its "long-standing business model that each of the businesses is individually responsible" for its "policies, programs and results," including those on diversity. 

No raise for Buffett and Munger, as usual

The proxy statement lists the annual salaries of Buffett and vice-chairman Charlie Munger at $100,000, as they have been for more than 25 years.

The cost of Buffett's security is paid for by Berkshire and included in his "Total Compensation," as required by the SEC.

It went up slightly in 2020 to $280,328 from $274,733 in 2019, but is lower than the $288,968 paid in 2018.

The other vice-chairmen, Greg Abel and Ajit Jain, have larger paychecks, getting more than $19 million each in total compensation, $16 million in salary plus a $3 million bonus.

CFO Marc Hamburg was paid almost $3.3 million.

Serving on Berkshire's board is not especially lucrative. The range for non-management members runs from $600 to $5,200 for 2020.

The company estimates Buffett's total compensation is 5.5 times the median employee compensation of $68,543.

In its story this week about Congressional Democrats proposing higher taxes for companies that have a ratio of at least 50-to-1, CNBC.com cites the left-leaning Economic Policy Institute's report that the ratio was 320-to-1 at the top 350 American firms in 2019. 

Berkshire's still buying its own stock

Berkshire bought back around $5 billion of its own stock during January and February, Barron's calculates, although the pace appeared to slow in the second half of February as the stock's price continued to rally. It's now up about 10% year-to-date.

Barron's made its estimate by looking at the shares outstanding listed as of early March in the proxy and comparing that numbers to what was reported as of December 31 in the annual report.

Last year, Berkshire repurchased $24.7 billion of its shares.

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BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Mar 19 2021

Berkshire's top holdings of disclosed publicly-traded U.S. stocks by market value, based on today's closing prices.

Holdings are as of December 31, 2020 as reported in Berkshire Hathaway’s 13F filing on February 16, 2021, except for Apple, Bank of America, and U.S. Bancorp, which also include shares held as of December 31, 2020 as disclosed in New England Asset Management’s 13F filing on February 16, 2021.

In addition to U.S. stocks, shares held as of December 31, 2020 of China's BYD, as listed in Buffett's 2020 letter to shareholders, are included. The price of those shares in U.S. trading is used to approximate the current market value of the position. The value of the stake as a percentage of the company's market value is fixed at what was listed as of December 31, 2020 in the letter.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

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-- Alex Crippen, Editor, Warren Buffett Watch