| OMAHA, Neb.
OMAHA, Neb. May 3 Warren Buffett on Saturday
defended his recent controversial vote on executive pay at
Coca-Cola Co and disappointing performance at railroad
BNSF as investors grilled him on his Berkshire Hathaway Inc
conglomerate at its annual shareholder
The investment guru was peppered with questions at the
meeting, part of a mostly festive weekend that Buffett calls
"Woodstock for Capitalists," following concerns that Berkshire
last year missed Buffett's five-year growth target for the first
time in his 49 years at the helm.
Buffett, 83, and his partner and company Vice Chairman
Charlie Munger, 90, faced off with the audience and a
hand-picked panel often excusing recent worries at the sprawling
"Over any cycle we will over-perform, but there's no
guarantee on that," he said, saying that Berkshire is designed
to perform best when markets are at their worst - unlike last
year's 30 percent jump in the S&P 500.
At the start, Buffett was immediately questioned about
Berkshire's abstention in the Coca-Cola equity
compensation plan vote.
Buffett said last week that he thought Coca-Cola's
controversial equity compensation plan was excessive, but
Berkshire Hathaway abstained in the shareholders vote.
That revelation drew sharp criticism in the run-up to the
meeting - particularly since Buffett has in the past called
options wasteful and akin to a free lottery ticket.
On Saturday, Buffett said that "going to war" would likely
not have been productive, and that Berkshire's abstention sent a
"I think the best result for the Coca-Cola Company was
achieved by our abstention, and we will see what happens in
terms of compensation between now and the next meeting of Coke."
But he also talked about the social pressures of board votes
on compensation plans. "The social dynamics are important in
board actions," he said.
The questions came a day after Berkshire Hathaway released
first-quarter earnings that just missed analyst expectations.
That report noted weather-related disruptions at railroad
BNSF - another topic of questioning on Saturday.
Buffett handed off, calling in BNSF executive chairman Matt
Rose to talk about the company's service challenges.
"We're making significant investments," Rose reassured the
And Buffett added that Berkshire could spend "many, many
billions" to improve operations at the railroad, which is the
country's largest player in the booming oil-by-rail business.
Last year, Berkshire Hathaway underperformed for the first
time in nearly 50 years by Buffett's own preferred measure:
gains in the company's book value, or worth, over five years
lagged total returns in the Standard & Poor's 500 index.
That has prompted questions on whether the so-called Oracle
of Omaha is finding it harder and harder to generate the stellar
returns he's delivered for decades, particularly as the company
grows so big it needs larger deals to make a difference to the
The annual meeting in Omaha draws tens of thousands of
people to hear Buffett and Munger answer hours of questions. The
two talk about not only on the company's future, but on such
topics as U.S. monetary policy and politics.
The meeting includes a massive exhibit floor that highlights
the breadth of Berkshire's holdings - from ice cream at Dairy
Queen to insurance at Geico, the BNSF railroad to jewelry
While Buffett faced some pointed questioning from
shareholders, many people in attendance here just listened to
him because they consider themselves fans.
At one point Buffett, surprisingly, was asked if he had lost
confidence in Berkshire Hathaway. In his annual letter to
shareholders, Buffett disclosed that he had suggested to his
estate's trustee that money left to his wife be largely invested
in a low-cost Standard & Poor's index fund.
The question posed: Why an index fund and not Berkshire
Because, he said, he's unconcerned about maximizing the
money he will leave his wife after he passes away.
"There will be loads of capital left over" for her, Buffett
(Reporting by Luciana Lopez and Jonathan Stempel in Omaha,
Nebraska; Editing by Bernard Orr)