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OMAHA, Neb. (AP) — Shareholder proposals are typically uneventful at Berkshire Hathaway’s annual meeting. But Warren Buffett and the company are now facing a legal battle over the way they treated a presenter last year.
Peter Flaherty of the National Legal and Policy Center came back this year with another suggestion on a different topic, even after he was interrupted in the middle of his talk last year and arrested for trespassing. The charges were later dropped, but Flaherty decided to sue because he was treated in such a way that he stood up for any shareholder who wanted to put forward a proposal. He said he has never had any problems at dozens of meetings where he has spoken since 2005, including at Berkshire’s 2022 meetings.
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“I was never interrupted during a shareholder presentation. I have never had my microphone cut off and I have never been removed from a meeting room. And I’ve certainly never been arrested,” Flaherty said. “These things were unprecedented for me.”
Last year, Flaherty questioned the character of Bill Gates, one of Buffett’s best friends and a former Berkshire board member. Flaherty suspected that Buffett’s close ties to Gates could harm Berkshire’s reputation, as Gates was reportedly linked to Jeffrey Epstein before he was arrested on sex trafficking charges. That’s why he suggested that Berkshire hand over Buffett’s chairmanship to someone else and leave him as CEO.
Buffett has donated billions to Gates’ foundation over the years and plans to leave most of his wealth to him to distribute.
Berkshire did not immediately respond to the federal lawsuit filed Friday, and it was not mentioned during Saturday’s meeting. Berkshire officials didn’t even address any of the proposals during the meeting – instead relying on their statements of objection submitted in the official meeting proxy.
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Buffett remained silent during the business meeting after spending all day answering questions from shareholders during the main portion of the shareholder meeting on Saturday. He left his eventual successor, Vice Chairman Greg Abel, in charge. He simply reminded speakers of all six proposals to keep their comments related to the proposals.
Flaherty’s proposal was one of six rejected at the Berkshire meeting this year. They were all rejected by the board, and Buffett still has about a third of the vote, so anything he rejects will almost certainly fail. None of the proposals received more than 85,000 votes. Flaherty’s proposal received only 6,150 votes, while there were 443,544 votes against.
Other proposals rejected Saturday included requiring Berkshire to produce reports on climate change risks and diversity and inclusion efforts at the giant corporation. Another proposal would have required Berkshire to create a board committee focused on rail safety.
The safety chief of rail union SMART-TD, which represents conductors and other rail workers, Jared Cassity, said that if BNSF wants to argue that safety is the railroad’s top priority, Berkshire’s board should focus on that and review staffing and operational practices to to help prevent derailments like the catastrophic one that Norfolk Southern experienced in East Palestine, Ohio, last year.
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“Railway safety requires effective board oversight,” Cassity said.
Berkshire argued that BNSF is already focused on improving safety and does not need greater 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 of its subsidiaries, such as the utility giant, already produce reports on greenhouse gas emissions, Berkshire said.
This year, Flaherty was allowed to argue that Berkshire should prepare 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 such as Fruit of the Loom that have factories in China are inadequate.
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