Written by Jonathan Stempel and Ko Gui Chin
OMAHA, Neb. (Reuters) – Warren Buffett took the stage at Berkshire Hathaway's annual meeting on Saturday to pay tribute to his longtime business partner Charlie Munger, who will eventually succeed him. He outlined the expanded role of executives who will lead the company.
The meeting will be the 60th for Buffett, 93, since he took over Berkshire in 1965. Buffett rarely appears in public to discuss his company anymore. He told investors in November that he felt good but knew “he was going to play in extra innings.”
Buffett said he would be comfortable having Berkshire's business unit chief executives deal directly with Vice Chairman Greg Abel and Vice Chairman Ajit Jain. Mr. Abel, 61, named Mr. Buffett's successor as CEO in 2021 and sat on stage with Mr. Buffett.
“Why are you happy with me when you have guys like Greg and Ajit?” he said. “It went very well.”
The shareholder meeting will be the first since Charlie Munger, Buffett's longtime friend, business partner and mentor, died in November at the age of 99.
“I'm in a position where I have people around me that I trust,” Buffett said on stage, referring to Munger. Earlier, Berkshire paid tribute to Munger in a video ahead of the meeting, showing photos of Omaha from 1924 and footage of Buffett and Munger over the years.
Mr. Munger was known for his concise and trenchant rebuttals of Mr. Buffett's often lengthy assessments of Berkshire, the economy, Wall Street and life.
“Charlie's architectural thinking led to Berkshire Hathaway being what it is today,” Buffett said in the video. His designs “will live on beyond his lifetime, and they will live on far beyond my lifetime,” he said.
Ahead of the meeting, Berkshire reported first-quarter results that showed its cash pile had ballooned to $189 billion as of March 31, even as the size of Apple's stock declined. Based on changes in Apple's stock price, Berkshire appears to have sold his 13% of his Apple shares during the quarter.
Buffett has long touted the iPhone maker's leadership and market power. Some investors have expressed concerns that Apple is becoming too much of Berkshire's investment portfolio. Apple CEO Tim Cook was also in attendance at Saturday's meeting.
Still, Buffett made it clear to shareholders that “unless something drastic happens that changes our capital allocation, Apple will be our top investment.”
Buffett also said he was comfortable increasing the company's cash stake, with relatively few alternatives in stock markets and disputes around the world, which could exceed $200 billion by the end of June. He said there is.
He added that Berkshire will continue to serve the United States.
“We're going to be US-oriented. If we're going to do something really big, it's very likely going to be done in the US,” Buffett said.
Buffett assured shareholders that Apple would be a top investment “unless something drastic happens” that changes Berkshire's capital allocation.
Abel touched on issues with Berkshire's energy business, saying that Berkshire intends to fight wildfire-related lawsuits, but it's a big challenge. The department is facing a multibillion-dollar claim against the PacifiCorp division over the 2020 Oregon wildfires.
In downtown Omaha, hundreds of stockholders waited in line all night to get in early. When the doors opened, some shareholders rushed to get good seats, and the auditorium quickly filled up.
“I've been here since 2:30 a.m.,” said Selina Lam, 32, an investment portfolio manager who had flown in from Hong Kong with 40 others and was first in line at one of the entrances. . “I want to meet Warren Buffett. I want to hear his views on Japanese stocks. I was on a plane for more than 25 hours for that purpose.''
Bill Gunther, 72, a former state forester from Newfane, Vermont, brought a lawn chair to sit in while online.
“I'm very bullish about Berkshire. Berkshire is very diverse and has a good culture. That's one of the things I like about it.”
As investors face questions like how best to grow without overspending on acquisitions, whether to pay dividends and how to use cash on hand, which had $189 billion at the end of March, , will be watching to see how this conglomerate evolves.
Succession Top of the Mind Berkshire is an $862 billion conglomerate with dozens of businesses, including BNSF Railway, Geico Auto Insurance, Dairy Queen, and Fruit of the Loom. The company also owns well over $300 billion in stock, nearly half of which is in Apple.
Berkshire's stock price has increased 23% since last year, lagging the Standard & Poor's 500's 25% rise. Over the past decade, the stock has increased 218% compared to the S&P's 172% rise.
Buffett is expected to face a wide range of questions on Saturday, from his major investments such as Apple and Occidental Petroleum to how rising interest rates have affected his company. Berkshire will also release its first quarter results, and shareholders will vote on six proposals on climate, diversity and China. Buffett opposes all six. Over the weekend, shareholders will have the opportunity to purchase merchandise such as Berkshire T-shirts and Squishmallows toys at an exhibit featuring Berkshire-owned companies.
Ruth Gearhart, 72, of Omaha, packed her bag with See's Candy and Pampered Chef tongs and spatulas. Mr. Gearhart, who has been a shareholder for 15 years, said his main concern is what Mr. Buffett says about his successor. “I trust him,” she said. “He's a good guy and we've got a lot of good people. He's going to get us through this. I don't want to see him go, but I think they were well prepared. ”
(Reporting by Gui Qing Koh and Jonathan Stempel; Additional reporting by Scott Morgan and Davide Barbuscia; Editing by Ira Iosebashvili, Megan Davies, Cynthia Osterman, Jason Neely and Diane Craft)
