A shareholder proposal at Berkshire Hathaway’s annual meeting has led to a lawsuit after the presenter, Peter Flaherty, was cut off during his presentation last year and subsequently arrested. Flaherty, from the National Legal and Policy Center, decided to sue over his treatment in order to stand up for shareholder rights. He had proposed that someone else take over Warren Buffett’s chairman title while leaving him as CEO due to concerns about Buffett’s association with Bill Gates, who has been linked to Jeffrey Epstein. Despite the lawsuit, Berkshire Hathaway did not immediately respond, and the issue was not addressed during this year’s meeting.
At the meeting, held in Nebraska, Buffett remained silent during the business portion and left the floor to Vice Chairman Greg Abel. The company rejected all six proposals presented, as Buffett controls roughly one-third of the vote. Flaherty’s proposal only received 6,150 votes in favor, with 443,544 votes against it. Other rejected proposals included calls for reports on climate change risks, diversity and inclusion efforts, and railroad safety. Berkshire officials argued that the decentralized nature of the company makes such reports cumbersome and unnecessary, with some subsidiaries already producing similar reports.
One of Flaherty’s proposals this year centered around the risks of doing business in China, but it was also summarily rejected. Flaherty argued that Berkshire Hathaway’s disclosures about subsidiaries in China were inadequate, and that the unique risks posed by the country warranted further examination. Berkshire Hathaway countered that it is already focused on improving safety and does not require additional oversight, despite calls for a board committee on railroad safety. Flaherty’s persistence in bringing forth these proposals indicates a commitment to shareholder activism, despite facing challenges in gaining support from Berkshire’s board.
Although Buffett has donated billions to Gates’ foundation over the years and plans to give him the bulk of his fortune to distribute, the association between the two has raised concerns among some shareholders. Flaherty’s proposal last year to separate Buffett from the chairman title was in response to these concerns, and his subsequent lawsuit against Berkshire Hathaway highlights the challenges faced by shareholders in bringing forth proposals that challenge the company’s leadership. Berkshire Hathaway’s refusal to engage with these proposals during the meeting underscores the power that Buffett wields within the company, making it difficult for dissenting voices to be heard.
