(Reuters) – Warren Buffett on Saturday called on corporate America to make their boards of directors more accountable to shareholders and less beholden to chief executive officers, perhaps by reducing their pay and requiring that they buy more stock.
FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan
In his annual letter to Berkshire Hathaway Inc (BRKa.N) shareholders, Buffett said pay for outside directors has “soared” to levels that might threaten their independence, sometimes reaching $250,000 to $300,000 for two weeks work, while “generous” age limits ensure “fabulous” job security.
Buffett said this can make even “independent” directors resist challenging bad decisions by CEOs, especially in takeovers.
“When seeking directors, CEOs don’t look for pit bulls,” Buffett wrote. “It’s the cocker spaniel that gets taken home.”
He said one large American company he did not identify recently had eight directors who never bought its shares with their own money.
“I feel better when directors of our portfolio companies have had the experience of purchasing shares with their savings, rather than simply having been the recipients of grants,” Buffett wrote.
Berkshire has more than 90 operating units such as the BNSF railroad, Geico auto insurer, and Dairy Queen ice cream.
Its own 14-person board is no paragon of youth, with six directors — including the 89-year-old Buffett — over age 70 and three in their 90s.
And the voting influence of most Berkshire directors is limited because Buffett, considered by many among the world’s greatest investors, controls nearly one-third of the voting power despite owning only about one-sixth of Berkshire’s stock.
Still, no Berkshire director was paid more than $7,300 for their work at the company in 2018, a regulatory filing shows, though several including Buffett and Microsoft Corp (MSFT.O) co-founder Bill Gates are billionaires, and can afford it.
Buffett also said adding women to boards “remains a work in progress.” Three Berkshire directors are women.
Buffett said he has been a director at 21 publicly-traded companies including Coca-Cola Co (KO.N), Kraft Heinz Co (KHC.O) and Washington Post Co, and in all but two “represented a substantial holding of stock.”
He has given up all directorships apart from Berkshire, one of several moves in recent years to reduce his workload.
Reporting by Jonathan Stempel in New York, Editing by Franklin Paul
794684 125779Yeah bookmaking this wasnt a bad decision wonderful post! . 358270
779093 754591whoa, this really is a actually good piece of data. I read about something like this before, this is impressively great stuff. 506165
456433 899243My brother suggested I would possibly like this blog. He was once entirely right. This submit really produced my day. You cant believe just how so a lot time I had spent for this details! Thank you! 290805
814984 573820I dont agree with this certain write-up. Nonetheless, I did researched in Google and Ive discovered out which you are correct and I had been thinking within the incorrect way. Continue producing quality material comparable to this. 238077
925061 348370Hello, Neat post. There is an issue along together with your web site in internet explorer, may possibly test thisK IE nonetheless could be the marketplace chief and a big section of folks will pass over your exceptional writing due to this difficulty. 668924
867970 780441Just wanna input on few common things, The web site style is perfect, the articles is really wonderful : D. 359687
613174 36446Some genuinely good and utilitarian info on this internet internet site , likewise I believe the style and style contains superb capabilities. 273139
90882 38235This internet site is my inhalation, truly amazing layout and Perfect written content material. 202548
701416 241239Yeah bookmaking this wasnt a bad conclusion fantastic post! . 900761
720096 269399Just a smiling visitor here to share the enjoy (:, btw outstanding layout. 216564
339701 753587I like the way you conduct your posts. Have a good Thursday! 864319
848705 439281Aw, i thought this was an really great post. In concept I would like to invest writing in this way moreover – taking time and actual effort to manufacture a really very good article but exactly what do I say I procrastinate alot and no indicates apparently go completed. 685845
574641 953228I enjoy this internet site, will certainly arrive back. Make confident you carry on writing high quality posts. 842222
208838 312138quite good post, i surely enjoy this fabulous website, persist with it 332646