The largest public pension fund in the U.S., the California Public Employees’ Retirement System (Calpers), will vote in favor of a shareholder proposal requiring Berkshire Hathaway to remove Warren Buffett as chairman and replace him with an independent chairman, reports an article in Bloomberg. Buffett serves as both CEO and chairman of the board of the company.
The proposal is being put forth by the non-profit National Legal & Policy Center, which says that having the same person in both the chairman and CEO roles weakens the company’s governance. It calls for Berkshire Hathaway to name an independent chair. Calpers is a major shareholder in Berkshire Hathaway: of the $450 billion in assets the fund has under management, $2.3 billion of it is Berkshire shares. The fund holds 0.13% of Berkshire’s Class A shares and 0.44% of their Class B shares. The National Legal & Policy Center is also a Berkshire shareholder.
For its part, Berkshire’s board believes that Buffett should continue in both roles, stating last month “that as long as Mr. Buffett is Berkshire’s CEO, he should continue as board chair and as Berkshire’s CEO.” But many investors throughout corporate America are pressuring companies to have two different people in the chairman and CEO roles, the article contends. And this isn’t the first time Calpers has pushed to divide the two roles; in 2015, they voted to remove Bank of America Corp’s Brian Moynihan from his position as chairman. That push failed, and Moynihan remains as BofA’s chairman and CEO. But at JPMorganChase, though Jamie Dimon currently fills both positions, the company said this month that they plan to split up the two roles when the next leadership transition takes place.
Meanwhile, many have questioned Buffett’s succession plans, as the legendary investor is 91, and his longtime business partner Charlier Munger is 98. While Buffett, who has a 32% voting interest in Berkshire, has long planned to have his son Howard Buffett replace him as non-executive chairman and hand over the CEO reins to Greg Abel, he has given no indication that he’s leaving anytime soon, Bloomberg reports.