DETROIT: Berkshire Hathaway Chief Executive Warren Buffett, one of the largest shareholders in General Motors Co, said on Monday he would be wary of putting former U.S. autos task force member Harry Wilson or anyone else on the company's board if the focus was on the short-term performance of the automaker.
"I totally disagree with the idea of putting somebody on the board who has an option on some other people's stock which is only good for two years," Buffett said on CNBC. "It's just not the way to run a business," he added.
In a statement to CNBC, Wilson said he is not a short-term strategist when it comes to General Motors, a company whose shares he has owned since 2011. Wilson said he agrees with Buffett in supporting Mary Barra as GM CEO.
Wilson and a group of hedge funds that own almost 2 percent of GM stock are pressing the automaker to buy back $8 billion in stock over the 12 months following its June annual meeting, and agree to give Wilson a seat on its board.
Buffett said he was concerned that Wilson's compensation from the hedge funds would be linked to the performance of GM over only two years.
But Wilson, in his statement to CNBC, said he is “perfectly willing to take all of my compensation in stock and have it locked up for an extended period of time. This is not by any means a two-year deal.”
Berkshire Hathaway owned 2.55 percent of GM's shares at the end of last year, according to documents filed with the U.S. Securities and Exchange Commission.
A GM spokesman declined to comment.
Wilson, 43, was a member of the government-appointed task force that helped lead GM through bankruptcy reorganization in 2009. He could not immediately be reached for comment.
United Auto Workers President Dennis Williams, whose union indirectly controls the largest single block of GM shares, told Reuters last month that the Wilson group's stock buy-back proposal may be premature. Williams has met with Wilson, but has not said whether he will back Wilson's bid to join GM's board.
Buffett also told CNBC on Monday that companies in the auto industry can burn through cash quickly and he would not be bothered if GM Chief Executive Mary Barra decided the company should hold onto its $25.2 billion in cash.- Reuters
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