Berkshire Hathaway CEO Warren Buffett’s annual letter, released on Saturday morning, included the usual homespun wisdom that his shareholders have come to expect, with modest and self-effacing reflections on his own unearned luck and fallibility. But at least one section of the letter was sharper, and appeared to be directed squarely at the president.
In that section, Buffett discusses companies that buy back their own shares, which he describes as a benefit to shareholders—assuming the shares are bought at a reasonable price. He also asserts that share buybacks are of no harm to the country. Berkshire Hathaway bought back $7.9 billion of its own shares last year, a decrease from 2021.
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Buffett had sharp words for critics of buybacks—though he did not directly name President Joe Biden, who has publicly disparaged share repurchases. “When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” Buffett wrote.
In a response to a question from Barron’s, a representative of Berkshire Hathaway wrote that the comment was not directed at any single person.
“It was written six months ago and not directed at anybody specific,” the representative wrote. “Mr. Buffett has written about repurchases for 20 years. Mr. Buffett has a policy of not criticizing individuals but does criticize practices.”
Biden signed a law last year to impose a 1% excise tax on share buybacks. Earlier this month, Biden said in his State of the Union address that he now wants to quadruple that tax. “Corporations ought to do the right thing,” he said.
Biden has lashed out in particular at oil companies that are buying back their shares instead of increasing production—a phenomenon he says helped lead to high gasoline prices last year.
“They invested too little of that profit to increase domestic production and keep gas prices down,” Biden said. “Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”
Buffett, however, sees buybacks as an important and harmless benefit to shareholders, who get to own a larger part of the business when its shares are retired. Berkshire owns large stakes in oil companies, including
(ticker: OXY) and
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