By Jonathan Stempel
(Reuters) -Berkshire Hathaway said Warren Buffett raised the pay of his designated successor Greg Abel to $20 million last year, as the conglomerate posted a record operating profit.
The company also urged the rejection of six shareholder proposals, including that Berkshire disclose more about its plans to reduce greenhouse gases and improve diversity, monitor the safety of its BNSF railroad unit more closely, and discuss how much its operations depend on Chinese government activities.
Berkshire disclosed executive pay and the recommendations on shareholder proposals in its annual proxy filing on Friday, ahead of the Omaha, Nebraska-based conglomerate’s May 4 annual meeting.
Abel’s salary comprised virtually all his compensation, which grew from $19 million a year earlier. That sum included a $16 million salary and $3 million bonus.
The 61-year-old vice chairman oversees Berkshire’s non-insurance operations such as BNSF, Berkshire Hathaway Energy and dozens of chemical, industrial and retail operations.
Vice Chairman Ajit Jain, who oversees insurance operations such as Geico, also received $20 million, up from $19 million.
Buffett’s own pay totaled $413,595, comprising a $100,000 salary unchanged for more than 35 years, plus personal and home security.
But the 93-year-old Buffett also owns 15.1% of Berkshire, and his $135 billion fortune ranks sixth worldwide according to Forbes magazine. Berkshire’s operating profit totaled $37.4 billion in 2023.
BNSF, CHINA PROPOSALS
Some of the shareholder proposals on Berkshire’s climate and diversity efforts mirror proposals offered at last year’s meeting, none of which drew more than 27% support.
Buffett controls 31.2% of Berkshire’s voting power, making passage of proposals he opposes an uphill battle.
The BNSF proposal by the AFL-CIO Equity Index Funds urges independent Berkshire directors to form a railroad safety committee to monitor financial risks.
Those funds said the February 2023 Norfolk Southern train derailment in East Palestine, Ohio, that caused a health and environmental crisis illustrated a need for Berkshire to do more to avert derailments and the resulting harm.
But Berkshire said BNSF already has state-of-the-art safety programs, and a committee was inconsistent with Berkshire’s culture of letting its operating units handle their own affairs.
It also said BNSF is the only major U.S. railroad not to adopt “Precision Scheduled Railroading,” which relies on longer and heavier trains that require fewer workers, and which some observers believe may have contributed to the Ohio crash.
The China proposal from the conservative National Legal and Policy Center said Berkshire “does not seem to take the China threat seriously.”
It cited late Vice Chairman Charlie Munger, who drew applause at last year’s annual meeting when he said: “If there’s one thing we should do, it’s get along with China. And we should have a lot of free trade with China, in our mutual interest.”
Berkshire called issuing a report unnecessary, and said its “Prohibited Business Practices Policy” specifically addresses transactions with China and human rights issues.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)