Buffett: Shareholders Should Speak Out on Coca-Cola

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

April 23 (Bloomberg) -- Warren Buffett, the billionaire chairman of Berkshire Hathaway, explains why he abstained from voting on Coca-Cola Co.’s plan to award employees with stock, how he feels about tech stocks and the U.S. housing recovery. He speaks with Betty Liu on Bloomberg Television's "Street Smart." (Source: Bloomberg)

We had a good time for 2.5 hours and we were going strong at the end.

What did you talk about?

These were people with diverse backgrounds.

We went around the table and brought up all types of subjects and i asked them about themselves.

During the lunch, a big piece of news came out.

Coca-cola, shareholders approve the compensation plan, which is something david winters has wanted you to oppose.

Why did you not vote on this?

I abstained.

I voted enthusiastically for the directors and i am enthusiastic about the ceo.

I thought the plan was excessive in that it talked about 500 million shares and using them up over four years.

It is excessive, so i abstained.

I could never vote against coca-cola.

You are a shareholder.

That is the way i feel about the people.

Did you let your views be known?

Yes.

I told him ahead of time.

Did you tell him that you opposed this?

What was his reaction?

We had a good conversation.

We are good friends and we will always be good friends.

He can run any company that we owned stock in.

Does that change your view on coca-cola?

No.

i love the company.

I think the plan is excessive, but i think it is a great company and has a great future.

David winters wanted you to speak publicly ahead of the vote so that you could speak to shareholders.

Why didn't you?

I was not interested in taking up that campaign.

I do not disagree with him.

He has been a shareholder for a long time.

He feels it is a plan that is excessive.

I would not have waged a campaign against them.

He's thought -- he thought there was a conflict there because you had criticized other companies.

I have not named companies.

I have written about compensation generally, extensively over 30 or so years.

I have never said i am against options.

And i voted for coca-cola plans in the past.

I thought it was excessive.

But david winters is joining a group of people -- david winters is joining a group of people who have become more public and active.

Bill ackman, it david einhorn, is that a good trend?

I do not see anything wrong with speaking out.

I do not think i would put david winters in the category with activist.

He is a longtime shareholder of coca-cola and he has a big position and he does not like the plan and he decided to go public with that fact.

It is perfectly proper to do.

I think he was right in terms of the plan being excessive.

I do not agree with some of the numbers.

Another major shareholder rings -- another major shareholdings of yours is heinz.

They have closed down plans.

Pretty effective results.

We own have to stop.

The warrants are pretty small relatively.

It is the stock ownership that we have had his big.

Would you increase your stake in the company?

We do not have the opportunity to.

That is held privately.

Her sure has roughly half -- berkshire hathaway has roughly half.

There has been no trading.

There will not be any trading in heinz for a long time.

Don't they expire in 2018? they do not cost us anything.

They will be exercised for sure, believe me.

Are you any closer to an acquisition?

We are working on some things . you said that last time.

We may be working on more things now.

They are not very huge.

There is enough going on that i would hope one or two would materialize.

David einhorn said -- has said that tech stocks are in a bubble.

Is that a warning to you?

Very few tech stocks i would want to buy at the prices they sell for, but it is not remotely like the bubble that existed 15 years ago.

We are not seeing craziness or anything of the sort.

We are certainly seeing some companies go public at very high valuations and some private transactions at some pretty fancy prices, but i do not know those companies well.

We are not there, but i do not find myself tempted to buy anything that is coming out.

You have been very vocal about the housing recovery and you have been optimistic, but when you look at fannie and freddie, do you think they should be liquidated?

Government has to play a part in housing and i think the 30 year fixed-rate mortgages is very good for the american public and i think you will need government participation in some way to bring the cost down.

The american public will do way better with some kind of a government guaranteed instrument in the picture.

Whether you start an entirely new company, perhaps with some private participation, maybe having the private market set the price to some degree and have the government be the insurer of last resort.

Maybe the private sector would take five percent of the risk.

Ask do you think they have -- do you think they have aided in the recovery?

I do not think it has anything to do with the housing recovery.

It was built into very low levels of housing starts following the crash in 2008. household formation eventually demands more housing.

Is there a role for berkshire hathaway?

I do not see any role for berkshire hathaway in fannie or freddie.

Or could be summoned some housing arrangement that gets worked out in the future.

-- there could be some housing arrangement that gets worked out in the future.

Why was it so hard to find?

They must be in hibernation.

I put out an ad in the annual report and i did not hear from anybody that had a substantial short position.

We wanted a real bear.

That is how you separate the real ones from the ones that would just like to have a seat at the meeting.

You wanted somebody who actually had a position.

Did you yourself go out to look for a bear?

I just wrote that in the andover port.

I did not get a -- i just wrote that in the annual report.

Does that concern you that shareholders will not get the full picture?

We will have three journalists and three analysts.

Among those six, they will get a chance to ask 36 questions.

They can ask anything they want to ask.

I hope we get questions that probe at our weak points.

By the way, in terms of acquisitions, i heard a rumor that you might be interested in buying the chicago cubs.

Is that true?

That is the only rumor i will deny.

Zero.

Would you get into biting -- new -- into buying -- i have been offered sports teams for years.

I have no interest.

Why not?

I do not live in a major-league account.

I owned a quarter of the minor league team.

You sold it two years ago.

I owned it for 20 years.

There is no reason to do it.

I would get no big ego kick out of it.

There is no reason.

There is no reason to make money, no reason for ego.

I will just sit and eat hotdogs.

It was great to see you, thank you so much.

Warren buffett, the berkshire

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change