Buffett faults Wells Fargo laxity in sales scandal
Buffett faults Wells Fargo laxity in sales scandal
08 May, 2017, 05:43
Wells Fargo "incentivized the wrong type of behavior", Buffett said Saturday during Berkshire Hathaway's annual meeting in Omaha.
Warren Buffett, who controls the largest stake in Wells Fargo & Co., said the San Francisco bank mishandled the fake-account scandal by failing to act promptly to fix abuses that tarnished the lender's reputation and made it harder to attract customers.
At Wells Fargo there were three very significant mistakes, he says, but the biggest problem was the bank's incentive system. "Our top priority is rebuilding the trust of our customers, team members, community partners, and shareholders".
"I blew it", he lamented, while speaking to tens of thousands of shareholders who had congregated in Omaha for Berkshire Hathaway's annual shareholder on Saturday.
The legendary investor said the airlines industry would have some more pricing sensibility in next 10 years and he believed airlines would operate at higher degrees of capacity in the future.
Buffett also raised the possibility Berkshire could pay its first dividend since 1967, if "reasonably soon, even while I'm around", the company had too much cash it could not reasonably deploy.
Buffett said that the lower rate of healthcare spending in other countries is one of the biggest disadvantages for United States businesses.
"If I die tonight, I think the stock would go up tomorrow", he said in response to one shareholder's question.
Berkshire Hathaway chairman and CEO Warren Buffett talks with a reporter before the Berkshire Hathaway annual meeting in Omaha, Nebraska, U.S. May 6, 2017. Berkshire is the largest holder of Wells Fargo with a almost 10 percent stake in the company.
Mr Buffett's conglomerate and 3G have worked together on a number of deals and "there's a chance we will do more and perhaps even bigger things together", he said. Critics of the bill have said it will take away the healthcare benefits of millions of people and allow the rich to get tax breaks, just as mentioned by Buffett.
Buffet said automation, driverless cars could hurt auto insurers.
Billionaire investor Warren E. Buffett rebuked Wells Fargo's handling of widespread illegal sales practices that spanned at least 15 years and included targeting undocumented immigrants to open new bank accounts.
But he said Berkshire now has a slight preference for trying to take tax losses, which could have less value if lawmakers in Washington reduce the 35 percent corporate tax rate.
The event has become a huge occasion and is sometimes called "Woodstock for Capitalists" or "Buffettpalooza".
Buffett also challenged, as he has in previous shareholder meetings, the two-and-20 compensation model for hedge fund managers.
He was joined at the traditional newspaper tossing contest by friends including Microsoft Corp co-founder and Berkshire director Bill Gates, and Miami Dolphins defensive tackle Ndamukong Suh. Several said they got there almost five hours before doors opened around 6:45 a.m.
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