Calpers plans to vote to replace Warren Buffett as Berkshire Hathaway chairman

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The nation’s largest pension fund plans to vote for a proposal that would oust Warren Buffett as chairman of Berkshire Hathaway Inc.

BRK.B 0.09%

California’s $470 billion public employee retirement system, known as Calpers, said in a regulatory filing it would support a National Legal and Policy Center proposal that the chairman of the Berkshire Hathaway’s board would be independent. That would prevent Mr. Buffett, who is also the company’s chief executive, from holding both positions.

Having the same person in both roles weakens corporate governance, the National Legal and Policy Center said in the shareholder measure released ahead of Berkshire’s April 30 shareholders’ meeting.

Berkshire Hathaway’s board responded, saying it opposed the measure and believed Mr Buffett should continue to fulfill both roles. After he leaves, a non-executive board member is expected to become chairman, the board said.

A Berkshire representative was not immediately available for comment.

The measure probably faces long odds. Mr. Buffett alone holds 32% of the voting rights in Berkshire. Calpers backs Mr Buffett’s re-election to the Berkshire board.

Companies are increasingly deciding not to hand over the presidency to their CEOs, according to consultancy Spencer Stuart. Last year, 59% of S&P 500 companies shared the roles of chairman and chief executive, down from 55% the year before and 41% a decade earlier.

The National Legal and Policy Center also filed actions arguing that the chairman should be an independent member of the Goldman Sachs Group board. Inc.,

Coca Cola Co.

Mondelez International Inc.,

Salesforce.com Inc. and Home Depot Inc.,

said Peter Flaherty, the group’s chairman.

Calpers, which is a shareholder in all five companies, declined to say specifically whether he would support the proposals. A spokeswoman for Calpers said the pension fund generally supports the separation of the roles of chairman of the board and chief executive in all companies in which it holds shares.

In addition to the proposal for Berkshire Hathaway’s chairman position, Calpers also co-sponsored a separate proposal asking the company for more information on how it manages climate risk. “In our view, the company’s existing disclosures are insufficient,” Calpers’ filing said. The New Jersey and Quebec pension funds also sponsored the measure.

Calpers’ long history of using its investment muscle to lead corporate governance, which has met with a setback, includes a previous meeting with Mr. Buffett. In 2004, the pension fund unsuccessfully opposed his re-election to the Coca-Cola board.

The move was part of a 2004 policy to deny support to hundreds of board members who had authorized auditors to provide non-audit services, such as tax advice. Good governance advocates said the practice could lead to conflicts of interest.

Calpers eventually changed this policy to more closely target the auditing firms themselves rather than the companies that use their services. Mr Buffett resigned from the Coca-Cola board in 2006, the company citing an increase in time demands resulting from recent Berkshire acquisitions.

Write to Heather Gillers at [email protected]

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