Berkshire Hathaway Inc. Vice Chairman Charles Munger said the company, led by Warren Buffett, will probably have to pay a dividend in the future because it will run out of ways to invest its profits.
“I think that some of you will live to see a Berkshire dividend, but I hope I don’t,” Munger, 87, said today at a meeting in Pasadena, California.
Buffett has shunned payouts and share buybacks, preferring to use the firm’s profits to make acquisitions and buy securities. With a cash hoard of about $40 billion, it may be harder to effectively invest the proceeds, Buffett told investors at a separate meeting in April in Omaha, Nebraska.
“I guess someday we’ll pay a dividend,” Munger said today, in response to a question from a member of the audience. “You’re saying, ‘Do you predict failure?’ And I suppose I do.”
Munger is hosting a “Morning With Charlie” today to replace the annual shareholder meeting of Wesco Financial Corp., the Berkshire unit that he ran as chief executive officer. Wesco is no longer publicly traded after Berkshire acquired its remaining stock last month.