OMAHA — Warren Buffett on Saturday shrugged off concerns about his Berkshire Hathaway conglomerate, which has trailed the overall market, and told shareholders to remain optimistic about his company, as well as the American economy.
More than 30,000 people descended on the annual gathering to listen to Buffett and Berkshire vice chairman Charlie Munger, who faced tough questions about Berkshire’s prospects for growth and acquisitions and about how Buffett came to handle a vote on pay packages crafted for Coca-Cola executives, a company in which Berkshire holds a major stake.
Buffett abstained from voting Berkshire’s 400 million shares against the compensation plan last week, although he has long advocated against exorbitant executive pay and after he described Coca-Cola’s package as excessive.
“I thought this was the most effective way of behaving at Berkshire,” Buffett said Saturday.
Buffett said he told Coke’s CEO privately that he opposed the compensation plan but didn’t want to criticize the company publicly or join another Coke investor’s very public campaign to curtail that pay.
“We made a clear statement about the excessiveness of the plan, but we didn’t go to war with Coke in any way,” Buffett said.
Shareholder Jake Kamm said the explanation Buffett offered initially for not voting against the pay package was not convincing.
“It’s a little bit of spin,” said Kamm, who teaches finance at Baldwin Wallace University near Cleveland.
Buffett said the true test will come when Coke reveals its pay packages over the next year.
Buffett’s son, Howard, serves on Coke’s board and supported the compensation plan, which raised some hackles among Berkshire shareholders because he is on the shortlist to take a powerful position at the company on Buffett’s departure. But Buffett said Berkshire shareholders shouldn’t worry about his preference that his son one day become Berkshire’s chairman.
Inevitably, there were rumblings about Berkshire’s failure to beat the stock market in four of the past five years. Buffett said investors shouldn’t have been surprised that Berkshire’s results trailed the S&P 500 last year.
“We will underperform in very strong up years,” Buffett said.
Shareholder Jack Lewis, from Holt, Mo., said he’s happy with Berkshire.
“Berkshire is the kind of stock that’s not going to be a super-growth stock,” Lewis said. “It’s going to be a stock that will continue to grow.”
Buffett and Munger have said for several years that the massive size of Berkshire makes it impossible to match the investment gains that the company delivered decades ago.
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Buffett opens meeting his way • OMAHA — Billionaire Warren Buffett poked fun at himself by singing a duet with songwriter Paul Anka to start the Berkshire Hathaway shareholders meeting Saturday.
One of the videotaped skits featured Buffett and Anka singing a Berkshire-themed parody of “My Way.” Buffett referenced in the song a past investing mistake — buying Dexter shoes.
Anka attended the meeting. The 83-year-old Buffett joked that his pairing with Anka was part of his succession planning, so he and Anka will be available to sing at weddings. The Associated Press
