Warren Buffett’s company rejects proposals, but it faces lawsuit over how it handled one last year
OMAHA, Neb.- Shareholder proposals generally proceed without a hitch at Berkshire Hathaway’s annual meeting. But Warren Buffett and the company are now facing a lawsuit over the way a presenter was treated last year.
Peter Flaherty of the National Legal and Policy Center returned this year with another proposal on a different topic, even after he was interrupted in the middle of his presentation last year and arrested for trespassing. The charges were later dropped, but Flaherty decided to file charges because of the way he was treated for standing up for any shareholder who wants to submit a proposal. He said he has never had any problems at the dozens of meetings he has presented since 2005, including the 2022 Berkshire meeting.
“I have never been interrupted during a shareholder presentation. My microphone has never been cut off, and I’ve never been removed from a conference room. And I certainly never got arrested,” Flaherty said, “those things were unprecedented for me.”
The issue last year was Flaherty questioning the character of one of Buffett’s closest friends and a former Berkshire board member, Bill Gates. Flaherty suggested that Buffett’s close relationship with Gates could damage Berkshire’s reputation amid reports that Gates was linked to Jeffrey Epstein before he was arrested for sex trafficking. So he suggested that Berkshire give someone else the title of chairman to Buffett, while leaving him as CEO.
Buffett has donated billions to Gates’ foundation over the years and plans to give him the majority of his fortune to distribute.
Berkshire did not immediately respond to the federal lawsuit filed Friday, nor was it discussed during Saturday’s meeting. Berkshire officials did not even address the proposals at the meeting – instead relying on their statements of opposition submitted in the official proxy for the meeting.
Buffett remained quiet during the business meeting after answering shareholder questions throughout most of Saturday’s shareholder meeting. He let his eventual successor, Vice Chairman Greg Abel, take the lead. He merely reminded the presenters of all six proposals to reserve their comments on the proposals.
Flaherty’s proposal was one of six rejected at this year’s Berkshire meeting. They were all opposed by the board, and Buffett still controls about a third of the vote, so anything he opposes will almost certainly fail. None of the proposals received more than 85,000 votes. Flaherty’s proposal received only 6,150 votes, while it received 443,544 votes against.
Some of the other proposals rejected Saturday included proposals to require Berkshire to produce reports on climate change risks and diversity and inclusion efforts at the massive conglomerate. Another proposal would have required Berkshire to create a board committee to focus on rail safety.
The safety chief of the SMART-TD railroad union that represents conductors and other railroad workers, Jared Cassity, said that if BNSF wants to argue that safety is the railroad’s top priority, the Berkshire board should focus on that and improve personnel and operating practices revised to help prevent derailments like the disastrous one Norfolk Southern had last year in East Palestine, Ohio.
“Railway safety requires effective board oversight,” Cassity said.
Berkshire argued that BNSF is already focused on improving safety and does not need more oversight.
Regarding the other proposals, Berkshire officials argued that such reports would be cumbersome and unnecessary because of the decentralized way the company is run. In addition, some subsidiaries, such as the massive utility, already produce reports on greenhouse gas emissions, Berkshire said.
This year, Flaherty was allowed to make his case that Berkshire should produce a report on the risks of doing business in China, before the proposal was summarily rejected.
“China poses unique risks for Berkshire Hathaway,” Flaherty said, arguing that the company’s existing disclosures about subsidiaries like Fruit of the Loom, which have factories in China, are inadequate.