DealBook Liveblogging the 2014 Berkshire Hathaway Shareholders Meeting (BRK)

Each year we link to some of the folks doing one of the  harder things you can do with words.
(okay less difficult than simultaneous translation but still, tougher than napping)
From the New York Times DealBook blog:

Berkshire Hathaway’s 2014 Shareholder Meeting

OMAHA — It’s time again for Berkshire Hathaway’s annual meeting at the CenturyLink Center here, where thousands of shareholders flock to listen to Warren E. Buffett’s latest thoughts on his company, the country and the world at large. The questions will begin at 9:30 a.m. Eastern, and DealBook will have live reports throughout the day.

11:37 A.M.Firing Up a Debate on Energy

A shareholder question comes in on natural gas and energy, more broadly.

Mr. Buffett says that Berkshire is a big proponent of alternative energy, believing that a significant percentage of Iowa’s needs can be met with wind power within five years.

Now Greg Abel is up. He says that there was substantial gas available to both heat homes and use for energy. Alternative energy use will increase, while the company is prudently managing its exposure to natural gas.

Mr. Buffett follows up by noting the significant operational improvement in the energy unit, which was recently renamed Berkshire Hathaway Energy from MidAmerican Energy. Much of that has come under Mr. Abel.

11:28 A.M. Working on the Railroad

An analyst asks about the performance of Berkshire’s railroad operations, anchored by Burlington Northern Santa Fe.

Mr. Buffett largely turns the question over to Matthew Rose, the executive chairman of Burlington Northern, who explains that the company has had to respond to the discoveries of oil and a freakishly long and brutal winter.

Mr. Buffett adds that Berkshire will invest $5 billion on railroads, something no other company can match.

11:21 A.M. Buffett’s Last Wishes (When It Comes to Investing)

Ms. Loomis of Fortune relates a question from a shareholder about a stipulation in Mr. Buffett’s will. It has been said that the Berkshire chief has instructed the three trustees of his bequests that they are to put 10 percent of the money into government bonds and 90 percent into S.&P. 500 index funds.

Why not put the money into Berkshire shares?

Mr. Buffett says that the amount of money he will leave behind is already pretty enormous. The point is not to accumulate even more wealth; he quips that there are already a few too many extra zeroes in those amounts.

Moreover, the trustees are supposed to hold onto every single Berkshire share that they will oversee for 12 years after his death. That is his demonstration of faith in the company.

11:19 A.M. The Selfie Comes to Omaha

 

11:14 A.M. Buffett on His Son and Corporate Governance

Andrew Sorkin of DealBook asks a question. A shareholder noted that Mr. Buffett’s son, Howard, sits on the board of Coke and did not vote against the controversial executive compensation plan.

Since Howard Buffett is going to take over as nonexecutive chairman of Berkshire some day, how can shareholders be assured that he will be a good steward of the company his father has built?

Mr. Buffett offers a lengthy discourse on corporate governance, using the example of a compensation committee that spends time putting together its recommendations. “It’s almost unheard of to question them,” Mr. Buffett says, clearing his throat. 

The billionaire says that the social dynamics of boards are important to understand. Boards tend not to look for “Dobermans,” he says. “They look for cocker spaniels.” And independent directors aren’t necessarily independent, since they make as much as several hundred thousand dollars a year and work less than one week a year.

But the Berkshire chief really doesn’t answer the question, essentially punting on whether boards should forcefully hold their companies accountable. His answer dwells much on the importance of preserving comity within the boardroom, rather than questioning unwise decisions.

In fact, Mr. Buffett allows, he has voted at several companies for compensation plans with which he didn’t necessarily agree.

All he has to offer is his faith that Howard Buffett and others will continue to do the right thing. “My son, Howard, and my other two children would have the dedication and do have the dedication” to preserve Berkshire’s culture, Mr. Buffett says.

10:59 A.M. The Softer Side of the Berkshire Acquisition Machine

A shareholder asks about the disruption that any corporate acquisition can create. Employees can fear that they would lose their jobs, for example. How does Berkshire assuage such fears?

Mr. Buffett says his company tries to be as fair and upfront as possible. He says Berkshire tries to hold onto businesses as long as it can and that it will deal with employees fairly.

It’s hard to make promises, but nevertheless Mr. Buffett says that he ensures that managers will continue to run their businesses. And the conglomerate has had a pretty good track record of holding onto its companies, letting go of only a few properties, like the original textile mill that gave Berkshire its name.

10:53 A.M. Berkshire’s Intrinsic Value

An analyst asks about Berkshire’s intrinsic value, and whether Mr. Buffett would consider ways to bolster the company’s stock price to come closer to reaching that level.

That might include a stock buyback or spinning off one of Berkshire’s units in an initial public offering of stock.

Mr. Buffett waves off such suggestions. Berkshire has no interest in breaking off pieces of itself, he says. Moreover, he says, intrinsic value is a fluctuating number that changes often.

“It’s a game we don’t want to play,” he says. 

Mr. Munger says he doesn’t think the company has ever wanted the stock price to be significantly higher than the company’s intrinsic value. The Berkshire vice chairman says that the desire to get the company’s shares to that level is wanting “egg in your beer,” and adds that Mr. Buffett has never been in favor of “ballooning the stock price.”

10:49 A.M. Buffett vs. the S.&P. 500...

...MUCH MORE