Berkshire Hathaway has called on shareholders to vote against plans to replace Warren Buffet as chairman of the Omaha headquartered investment company.
The Board of Berkshire Hathaway said shareholders should vote down a proposal, put forward by Pennsylvania investment firm Federated Hermes, to separate the positions of Chairman and CEO within the firm.
The move would force Buffett to stand down as the firm’s chairman, and force Berkshire Hathaway to bring in a new chairman in place of the 91-year-old investment guru.
In setting out their opposition to the plans, Berkshire’s Board said that Buffet has received an annual salary of just $100,000 a year for his positions in Berkshire Hathaway for more than 25 years. The Board noted that Buffett has previously said he does not expect a pay rise in the future.
Buffett, who has gained a reputation as the “Sage of Omaha” for his investment foresight, has been a director at Berkshire Hathaway since 1965, and has acted as the investment firm’s chairman and CEO since 1970.
In arguing in favour of the proposal, Federated Hermes said it believes that having a single person act as both Chairman and CEO weakens a company’s governance structure, and allows an individual to “exert excessive influence on the board and its agenda.”
Buffett currently has a 32 per cent voting interest in Berkshire.
The Board said that once Buffett is no longer CEO of Berkshire Hathaway, the positions of CEO and chairman within the firm will be separated.
Berkshire Hathaway also called on investors to reject three other proposals, calling on the firm to increase diversity, and to set out its plans to handle climate risk and cut its emissions.