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FRI, MAR 14, 2025
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Berkshire imposes surprise age limit on (almost all) its directors |
Berkshire Hathaway's annual meeting proxy statement released tonight reveals Berkshire's board decided last year that "a director will no longer be eligible for reelection after his or her 80th birthday."
There are exceptions for any director "who also serves as Chief Executive Officer" or who "controls a 5% or greater voting interest in the Company." Buffett celebrated his 94th birthday last August, but he's the CEO and he has 30.3% of the company's voting interest, so he can remain on the board. The new rule does say a CEO without a 5% voting interest will have to "retire from the Board effective upon his or her retirement from the Company unless requested by the independent directors to continue as a director." |
Berkshire board member Ron Olson during a CNBC interview at the 2024 annual shareholders meeting in Omaha. Photo: CNBC | Adam Jeffery |
The limit means 83-year-old Ron Olson, a partner in the Los Angeles office of the Munger Tolles & Olson law firm, and a Berkshire director since 1997, is not eligible to be reelected at this year's meeting on May 3.
The remaining 13 directors have been nominated for election. At 75, investment manager Wallace Weitz is the oldest among them. The limit is somewhat surprising given Buffett's own refusal to let age stand in his way.
He has chided billionaire Bernard Arnault for allowing LVMH to raise its mandatory retirement age from 75 to 80, saying it's still too low. (Arnault appears to have listened. This week, the company indicated it wants to raise the limit to 85.)
And in his 2019 letter to shareholders, he criticized corporate boards for not having enough women, failing to be an effective check against ill-advised deals favored by the CEO, and eroding the independence of board members by inflating their compensation.
While some investors would also cite concerns over elderly directors, including on Berkshire's board, Buffett only mentioned age when he complained about the "fabulous" job security those overpaid directors enjoy. "Board members may get politely ignored, but they seldom get fired. Instead, generous age limits– usually 70 or higher– act as the standard method for the genteel ejection of directors." (Also in the proxy: Greg Abel and Ajit Jain's annual compensation increased by $1 million each to $21 million, and Berkshire's board opposed seven shareholder proposals including several on diversity and discrimination.) |
Not exactly a surprise, but still no Berkshire buybacks |
Buffett apparently thinks Berkshire stock remains on the high side.
Barron's notes the share count as of March 5, as shown in tonight's proxy statement, hasn't changed from the February 10 number in Berkshire's 10-K.
That means there have been no buybacks since last May, and if the stock remains strong there may not be any this year. |
Berkshire's B shares close at record high even as S&P slumps |
Berkshire Hathaway shares have significantly parted ways with the S&P 500 over the past four weeks.
After the benchmark index closed at a record high in February thanks to a "Trump bump" in the wake of the election, it has dropped sharply amid uncertainty over the president's tariffs and efforts to cut government spending.
On Thursday, the S&P ended down 10.1% from its record high, the common definition of a "correction," although it bounced back a bit today to cut that decline to 8.2%. |
Over the same period, however, both classes of Berkshire stock are up more than 6%, maintaining their momentum after getting a boost from strong earnings. Today the Class B shares closed at a record high of $514.60, topping the previous high close of $513.83 on February 28. Today's intraday high of $515.84 didn't manage to top the record high of $518.77 set on March 3. |
The Class A shares didn't set any records today but did close just a few dollars below their $775,000 record high on February 28. Today's intraday high of $773,525 also fell short of the record intraday high of $777,749 on March 3. |
Berkshire real estate brokerage denies WSJ report of takeover talks |
HomeServices of America's CEO is strongly denying a Wall Street Journal report Thursday it is in "advanced" talks to be acquired by Compass, the nation's biggest U.S. real estate by volume in 2023.
Several reports say Gino Blefari wrote to employees "there are no discussions, negotiations, or agreement to sell HomeServices or any of its affiliated companies, and that includes the Berkshire Hathaway HomeServices franchise business."
In an underlined sentence, he added, "Moreover, no such sale is being contemplated." |
In its story, the Journal quoted "people familiar with the matter" as saying a "deal could come together soon, if talks don't hit any last-minute snags." It added that the "acquisition price couldn't be determined."
It is very unusual for Berkshire to sell an operating company, but it has happened. (Its newspaper business was sold in 2020 and a small worker's comp insurer was sold in 2019.)
In addition, Buffett didn't negotiate directly to initially buy the real estate business since it was already a subsidiary of MidAmerican Energy when Berkshire bought it in 1999. The Journal notes real estate brokerages are suffering as high prices and elevated mortgage rates slow home sales. |
BUFFETT AROUND THE INTERNET Some links may require a subscription |
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HIGHLIGHTS FROM THE ARCHIVE |
How to know when you’re in your 'circle of competence' (2002) |
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Mar. 14, 2025 |
Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of December 31, 2024 as reported in Berkshire Hathaway’s 13F filing on February 14, 2025, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. |
Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here. Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.
-- Alex Crippen, Editor, Warren Buffett Watch |
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