The largest state public pension fund in the U.S. has sided with a minority shareholder, which has sponsored a proposal to remove Warren Buffett from the post of chairman of the board of Berkshire Hathaway, Inc. (NYSE: BRK-A) (NYSE: BRK-B).
What Happened: The California Public Employees' Retirement System, aka CalPERS, would vote in favor of a proposal brought by the National Legal and Policy Center that calls for amending the bylaws to make an independent member the chair of the board.
NLPC, which owns Berkshire shares with a value in excess of $2,000, argues that the roles of CEO and chairman are separate and come with different responsibilities that are critical to the success of a company. When held by a single person, these roles are greatly diminished, it said.
Berkshire countered in the proxy statement, saying that its board recommends against voting for the proposal. Given that Buffett holds a 32% voting interest in the company, he should continue to be the chairman and CEO, it added.
Related Link: Warren Buffett's Berkshire Hathaway Smashes Through All-Time Highs
Additionally, CalPERS said in its filing that it would sponsor a proposal requesting improved reporting of physical and transitional climate-related risks and opportunities. The pension fund also said it would not support the reelection of Audit Committee members Susan Decker and Meryl Witmer as it believes they failed to provide accurate and timely disclosure of environmental risks and opportunities.
Why It's Important: CalPERS has over $450 billion in total assets under management and it owns about 800 Class shares and 5.5 million Class B shares of Berkshire.
Buffett has been running Berkshire since 1965, and thanks to his 16% stake in the company, his net worth is around $126 billion, according to the Bloomberg Billionaires Index.
Berkshire has convened the annual meeting of shareholders on April 30 and it will be held at the CHI Health Center in Omaha, Nebraska.
Class A Berkshire Hathaway shares closed Wednesday's session down 0.07% at $ 522,900.56, according to Benzinga Pro.
Related Link: Why This HP Analyst Remains Skeptical Even After Warren Buffett's $4.2B Investment
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