Berkshire Hathaway Inc. - Shareholder-Analyst Call - NYSE:BRK.B

NYSE:BRK.B

During the Berkshire Hathaway Inc. Shareholder/Analyst Call on May 2, 2020, Debbie Bosanek, serving as Secretary, made the following statements:

1. Motion to Dispense with Reading of Minutes:

   • Debbie moved that the reading of the minutes of the last meeting of shareholders be dispensed with and the minutes be approved.
   • This motion was seconded and subsequently carried.

2. Motion to Elect Directors:

   • Debbie moved that Warren Buffett, Charles Munger, Gregory Abel, Howard Buffett, Stephen Burke, Kenneth Chenault, Susan Decker, David Gottesman, Charlotte Guyman, Ajit Jain, Thomas Murphy, Ronald Olson, Walter Scott, and Meryl Witmer be elected as directors.
   • This motion was seconded and then acted upon, resulting in the election of these individuals as directors.

3. Motion for Advisory Vote on Compensation:

   • Debbie moved that the shareholders of the company approve, on an advisory basis, the compensation paid to the company's named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, the accompanying compensation tables, and the related narrative discussion in the company's 2020 annual meeting proxy statement.
   • This motion was seconded and then failed due to the number of votes against it exceeding a majority of the votes of all Class A and Class B shares properly cast on the matter.

4. Motion to Adjourn the Meeting:

   • Debbie moved that the meeting be adjourned.

   • This motion was seconded and then carried, officially ending the meeting.

During the Berkshire Hathaway Inc. Shareholder/Analyst call on May 2, 2020, Warren E. Buffett, the Chairman, CEO, and President of Berkshire Hathaway, made several statements:

1. Opening Remarks:

   • Acknowledged that the annual meeting did not look or feel like a typical meeting due to the absence of his long-time partner, Charlie Munger.
   • Assured attendees that Charlie Munger, aged 96, was in good health and that he had adapted to using technology, including Zoom, to conduct daily meetings.
   • Mentioned that Charlie would return to the meeting the following year.

2. On Charlie Munger's Absence:

   • Explained that it was not advisable for Charlie to travel to Omaha for the meeting given his age and the circumstances.
   • Joked that Charlie had surpassed him technologically by adopting Zoom for daily meetings, albeit not a significant technological leap.

3. On Ajit Jain and Greg Abel:

   • Noted that Ajit Jain, Vice Chairman in charge of Insurance, was safely in New York and did not travel to Omaha for the meeting.
   • Introduced Greg Abel, the Vice Chairman in charge of all non-insurance operations, who managed a business with over $150 billion in revenues, spanning dozens of industries and employing more than 300,000 people.

4. On Oil Prices and Risk:

   • Commented that investing in oil was a bet on oil prices over time, which carried significant risk, especially for oil producers facing low oil prices.
   • Stated that if current oil prices persisted, there would likely be many bad loans and debts in the energy sector, impacting equity holders negatively.

5. On Equity Put Contracts:

   • In response to a question about the status of equity put contracts, Buffett explained that between 2004 and 2006, Berkshire wrote approximately 48 to 50 contracts with terms ranging from 15 to 20 years.
   • Mentioned that Berkshire received around $4.8 billion from these contracts, which it was free to use as desired.
   • Clarified that Berkshire agreed to pay based on the performance of one or more of four indices at the time of expiration, and that these were European-style puts, meaning payment was only due on one specific date.
   • Noted that Berkshire did not have to put up collateral, except for a minor exception.
   • Estimated the original nominal value of the contracts to be over $30 billion or possibly $35 billion, reflecting the liability if all indices went to zero.

6. On Credit Card Use:

   • Agreed with Greg Abel’s advice that while credit cards can be convenient, users should aim to repay their balances promptly to avoid high-interest rates.

7. On the Payroll Protection Plan:

   • Expressed support for the Payroll Protection Plan, stating that it was important to take care of individuals struggling financially due to the pandemic.
   • Acknowledged the challenges of administering such a large program and the potential for fraud, but emphasized the importance of helping those affected by circumstances beyond their control.

8. On Borrowing Money:

   • Commented that it was a good time for companies to borrow money, which may not be ideal for lenders but was beneficial for the economy.
   • Noted that Berkshire Hathaway had borrowed money recently, aligning with its own financial strategy.

9. On Supporting Operating Companies:

   • Addressed a question about whether Berkshire would provide additional cash to its operating companies to help them navigate the pandemic and potentially gain market share.

   • Indicated that he would address this topic later in the meeting.

Marc David Hamburg, as the Senior VP, CFO & Secretary of Berkshire Hathaway, made several statements during the shareholder/analyst call. Here’s a detailed list of his contributions:

1. Introduction and Role: He introduced himself as the Secretary of Berkshire Hathaway and stated his role in making a written record of the proceedings.

2. Report on Shares Outstanding:

   • He reported the number of Berkshire shares outstanding entitled to vote and represented at the meeting:
     • 699,123 shares of Class A Berkshire Hathaway common stock, each entitled to 1 vote.
     • 1,382,352,370 shares of Class B Berkshire Hathaway common stock, each entitled to 1/10,000 of 1 vote.
     • He noted that 472,037 Class A shares and 834,802,274 Class B shares were represented at the meeting by proxies returned through Thursday evening, April 30.

3. Approval of Minutes:

   • He moved that the reading of the minutes of the last meeting of shareholders be dispensed with and that the minutes be approved.

4. Election of Directors:

   • He moved that Warren Buffett, Charles Munger, Gregory Abel, Howard Buffett, Stephen Burke, Kenneth Chenault, Susan Decker, David Gottesman, Charlotte Guyman, Ajit Jain, Thomas Murphy, Ronald Olson, Walter Scott, and Meryl Witmer be elected as directors.

5. Report on Votes for Directors:

   • He reported that the ballot of the proxyholders in response to proxies received cast not less than 543,203 votes for each nominee, exceeding a majority of the total votes of all Class A and Class B shares outstanding.

6. Advisory Vote on Executive Compensation:

   • He moved that the shareholders approve, on an advisory basis, the compensation paid to the company's named executive officers as disclosed in the proxy statement.

7. Report on Votes for Executive Compensation:

   • He reported that the ballot of the proxyholders cast not less than 519,750 votes to approve the compensation paid to the company's named executive officers, exceeding a majority of the total votes of all Class A and Class B shares outstanding.

8. Advisory Vote on Frequency of Executive Compensation Votes:

   • He moved that the shareholders determine the frequency of the advisory vote on compensation of the company's named executive officers.

9. Report on Votes for Frequency of Executive Compensation Votes:

   • He reported the votes cast for the frequency of the advisory vote: 131,443 votes for annual, 2,228 votes for biennial, and 419,984 votes for triennial. The majority favored a frequency of every 3 years.

10. Reading of Supporting Statement for Diversity Proposal:

    • He read a statement prepared by the Comptroller of the City of New York in support of a motion requesting that Berkshire Hathaway adopt a policy for improving Board and top management diversity.

11. Report on Votes for Diversity Proposal:

    • He reported that the ballot of the proxyholders cast 65,925 votes for the motion and 485,824 votes against the motion, indicating that the proposal had failed.

12. Adjournment Motion:

    • He moved that the meeting be adjourned, which was seconded and carried.

Throughout the meeting, Marc David Hamburg played a key role in facilitating the formal proceedings, reporting on votes, and ensuring that the meeting adhered to its agenda.

Daniel Jerome Jaksich, the Vice President, Controller, and Principal Accounting Officer of Berkshire Hathaway Inc., provided reports on the voting results for several proposals during the Shareholder/Analyst Call on May 2, 2020. Here is a detailed summary of his statements:

Report on Diversity Proposal (Proposal 4)

• Votes For: 65,925
• Votes Against: 485,824
• Outcome: The proposal failed because the number of votes against exceeded a majority of the votes of all Class A and Class B shares properly cast and all votes outstanding.
• Certification: The precise count of the votes, as required by Delaware law, was given to the Secretary to be placed with the minutes of the meeting.

Report on Frequency of Advisory Vote on Compensation

• Votes for Every Year: 131,443
• Votes for Every Two Years: 2,228
• Votes for Every Three Years: 419,984
• Outcome: The shareholders determined, on an advisory basis, that they shall have an advisory vote on the compensation paid to the company's named executive officers every three years.
• Certification: The precise count of the votes, as required by Delaware law, was given to the Secretary to be placed with the minutes of the meeting.

Report on Advisory Vote on Compensation Paid to Executive Officers

• Votes Approving Compensation: Not less than 519,750
• Outcome: The motion to approve, on an advisory basis, the compensation paid to the company's named executive officers passed.
• Certification: The precise count of the votes, as required by Delaware law, was given to the Secretary to be placed with the minutes of the meeting.

Report on Election of Directors

• Votes for Each Nominee: Not less than 543,203

• Outcome: All nominees were elected as directors.

• Certification: The precise count of the votes, as required by Delaware law, was given to the Secretary to be placed with the minutes of the meeting.