By Andrew Bary

Longtime Berkshire Hathaway director Ron Olson will leave the company's board this year under a new rule that prevents directors from continuing to serve past their 80th birthday, according to the Berkshire proxy statement released late Friday.

Olson, who is 83, has been on the Berkshire board since 1997. He is a partner at Munger, Tolles & Olson, the law firm where longtime Berkshire Vice Chairman Charlie Munger worked until his death at 99 in late 2023.

The new rule also could prevent CEO and Chairman Warren Buffett, 94, from remaining on the board if he decides to retire from the top job.

The proxy states: "Any Director who also serves as the Chief Executive Officer of the Company shall retire from the Board effective upon his or her retirement from the Company unless requested by the independent directors to continue as a director."

Many CEOs who also serve as chairman stay on in the latter role in a transition once they retire as CEOs. This practice has both fans and detractors. Fans say that the new CEO can benefit from the presence and experience of the former CEO, while others say it's counterproductive to put the new chief under the glare of the former one.

The new Berkshire rules allow any director with a 5% or greater interest in the company to continue to remain as director past his or her 80th birthday.

The proxy also reveals that Buffett was paid a $100,000 salary in 2024 with no bonus, the same pay package he has had for more than 25 years. He also received about $300,000 in other compensation in 2024 -- comparable to amounts in prior years -- for the costs of personal and home security. Those security costs are way below what many CEOs receive.

Berkshire Vice Chairman Greg Abel ( Buffett's likely successor), who heads the company's noninsurance businesses, and Vice Chairman Ajit Jain, who leads its insurance business, were each paid about $21 million in compensation last year, up $1 million from what they earned in 2023. Berkshire doesn't issue stock as compensation to executives or any employees. All compensation is in cash. If executives or directors want to own stock, they need to buy it in the open market.

With Olson's departure from the board, there will be 13 directors after the Berkshire annual meeting in May, assuming all are re-elected.

Olson has been more willing to speak publicly about Berkshire than other directors who generally say little or nothing about the company.

The new rules are notable and could reflect a desire by Buffett and the board to end involvement on the board by very old people. Several years ago, Berkshire had several board members aged around 90 or older. including Tom Murphy, Sandy Gottesman, and Munger.

Proxy advisors and those focused on corporate governance often urge companies to weed out very old directors. The 13-member Berkshire board isn't youthful, with the youngest being investment manager Chris Davis, 59. The rest are in their 60s and 70s, in addition to Buffett.

Write to Andrew Bary at andrew.bary@barrons.com

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March 14, 2025 18:56 ET (22:56 GMT)

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