(Morning News) Berkshire Hathaway (Berkshire Hathaway) is changing the sound waves.
The largest public pension fund in the United States, the California Public Employees’ Retirement System (CalPERS), overnight (Tuesday) expressed support for Berkshire Hathaway’s proposal to step down as chairman.
CalPERS will vote for the company’s shareholder proposal to replace Buffett as chairman, but still support Buffett as CEO. Buffett currently holds a dual role in the company, he is chairman and CEO of Berkshire Hathaway.
CalPERS disclosed its willingness to vote in a regulatory filing ahead of its annual shareholder meeting on the 30th of this month. CalPERS is one of the company’s major shareholders, with more than $2.3 billion in Berkshire Hathaway stock.
CalPERS believes that when one person serves as both CEO and chairman, the contributions of both roles are “substantially reduced”. However, Berkshire Hathaway opposed the proposal. The company has said it will have someone outside of management as its chairman after Buffett is no longer in power. But for now, Buffett should remain chairman and CEO. Buffett, 91, has run Berkshire Hathaway since 1965.
Berkshire Hathaway has also revealed that the company plans to make Buffett’s son Howard Buffett non-executive chairman after his father steps down, while current vice chairman Greg Abel as chief executive officer.
Although there are constant voices calling for Buffett to abdicate, as long as Berkshire Hathaway opposes shareholder proposals, they are usually rejected by overwhelming votes. Because Buffett himself controls about 32% of Berkshire Hathaway’s voting power, while also owning about 16% of the stock.
In addition to CalPERS, another shareholder, Federated Hermes, a Pennsylvania investment firm, made a proposal last month to separate Berkshire Hathaway’s chairman and CEO positions, aiming to force Buffett to resign as the company’s chairman. It also forced Berkshire Hathaway to bring in another new chairman to replace the 91-year-old stock god.
However, Buffett said in an interview with the media a few days ago that he is in good health and has no plans to resign as CEO of Berkshire Hathaway. Instead, he is eagerly looking forward to meeting shareholders face-to-face at the company’s annual meeting on April 30. Attendance at the AGM is also likely to hit a record high.
Shares of Berkshire Hathaway have risen a total of 15.24 percent this year, or $69,250, to close at $523,550 overnight. During that period, the S&P 500 fell 6.97% to close at 4,462.21 overnight.