Berkshire Shareholders Likely To Reject Proposal To Pay Dividends

At the Berkshire Hathaway annual meeting on May 3, a shareholder proposal for the board to “pay a meaningful annual dividend on the shares” is likely to be rejected.  The Notice of Annual Meeting of Shareholders states that the Board of Directors unanimously favors a vote against this proposal.  “The Board of Directors does not believe this proposal is necessary in light of the fact that on an annual basis the Board of Directors does in fact consider whether or not the Corporation should retain all of its earnings…”

I am quoted in a Kiplinger’s Personal Finance article:  “Dividends from Berkshire?  Not on Buffett’s Watch” (April 17, 2014):

“He (Warren Buffett) feels he can earn a higher return for shareholders if he invests the company’s retained earnings, rather than if the shareholders did it themselves,” says David Kass, a finance professor at the Robert H. Smith School of Business at the University of Maryland in College Park.”

“Kass, a Berkshire shareholder who regularly attends the company’s annual meeting (often with students in tow), will have a prime seat as the matter comes to a vote at this year’s annual meeting, scheduled for May 3.  It is virtually certain that Berkshire shareholders will reject the resolution.”

…But even when the stock market reached extraordinarily high levels, as it did during the technology-fueled growth-stock boom of the late 1990’s, Buffett declined to return cash to shareholders.  “Part of his success in investing is his patience,” Kass says.

The entire article is available at:

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