In Omaha: Berkshire Hathaway’s 2025 Meeting with Sue Decker 5/2/25

0:04Hi, I'm CNBC producer Katie Kramer. We are kicking off a Squawk Pod reports special series, our weekend with Warren Buffett. This is the 52nd annual shareholders meeting. We're coming to you straight from Omaha, Nebraska at the Berkshire Hathaway annual shareholder meeting. They had requests for 138 ,000 tickets by mail. That's the most they've ever received. On this episode, a special interview with Berkshire Hathaway board member and lead director Sue Decker. She's also on the boards of Costco and Vail Resorts and knows a thing or two about the state of the consumer. I think the consumer is nervous and I think the consumers need stability in what the outlook is.

0:44Sue Decker sits down with Becky Quick in Omaha. Berkshire really does play a long game, right? This Squawk Pod reports kicking off the Berkshire Hathaway 2025 annual shareholder meeting starts right after this.

1:08Welcome back as we kick off the 2025 Berkshire Hathaway Annual Shareholder Meeting. This is the calm before the storm. We're on the ground with all sorts of members of the Berkshire family, including the conglomerate's lead independent director, Sue Decker. She is also on the boards of Costco and Vail Resorts and even once ran Yahoo. Sue Decker sat down with our own Becky Quick in Omaha. We are joined right now by Sue Decker. She's the lead director on the Berkshire Hathaway board. By the way, she also is the founder and CEO of Rafter. That is a company that is a software provider to university administrations.

1:44And Sue, it's really great to see you right now. Great to see you too. I want to start with the Rafter part of this. President Trump posting on Truth Social that he wants to take away the tax-exempt status from Harvard. You're big in higher education. You're really close to all these people. What are you hearing right now from the university communities about what might be happening at this point? Well, the university communities are understandably worried. You know, it's just zooming out a little bit. Universities are probably one of the industries that's a trade surplus. We have the industry that's the envy of the world.

2:19People come here to come to university. and it's a more than trillion dollar industry and half of it is funded by state, local and government funding. And it has a cost base that's largely fixed, 75 percent fixed. That's more like a hospital than it is like a corporation. It's going to be very challenging for them if major hammers come down on their finances. You could change them over time. And you all, CNBC had a guest on earlier this week, Mitch Daniels from Purdue. And he had some really good things to say. I You can agree wholeheartedly, and I do, with the need for reform, but still feel very, very cautious about using the power of the central government to require it.

3:07I think you could have much more surgical targeted tax policy. For example, I think taking away tax exam status would be, I believe, challenged in court. It's been a long value that education should be nonprofit. But there are elements of universities, some big sports schools that have commercial things that could be taxed, for example. And there's examples of that in other charitable organizations. So I do think, you know, one, I think universities are incredibly important to our overall reputation as a country. But two, there are things that need to be reformed. Tuition, for example, has been going up indefinitely.

3:46A lot of parents are feeling like, is it worth the cost of education now when you look at outcomes and jobs? So I do think that reform is needed, but I don't think a blunt instrument like that is necessarily going to be. I think you're going to kill the golden goose as opposed to trying to make the eggs bigger. Let's talk about Berkshire and why we're here. You're the lead director, and there was a pretty significant change that the board put into action over the last year since the last time we were here. that's that there's a mandatory retirement age of 80 for directors on the board, unless the board decides that that person needs to stay and the person that they've decided right now is Warren Buffett should stay on the board.

4:23How did that ruling come about? Because Berkshire and Warren Buffett himself have always been pretty outspoken about the idea that, you know, mandatory retirement ages are not really their things, that you're more productive later in life, maybe, and certainly a lot wiser. Yeah, for sure. And I think your last point is exactly the point that Berkshire is always valued, given board members' capacity and capabilities and skills and experience over age. And at the same time, it kind of future-proofs the board to have some sort of refreshment. I think what's important about the policy we adopt is it's a target threshold of 80, which I think is the oldest in the country in terms of the trigger.

5:06So I think it kind of balances the wisdom that we can capture with introducing, you know, it seemed like an optimal time to put in a more modern policy. I think we had with Charlie's passing and other legends, Tom Murphy, Walter Scott, Murphy. Yeah. You know, Sandy, Goddessman, even Don Keogh going back. So so, you know, they were all into their 90s and it's it's seems like a good time to do it in terms of Warren. And, you know, he's a founder. He has 30 percent of the vote. I think the policy is meant to be more for independent stewards of the company as opposed to someone who's shaping and building the company.

5:46So it just seemed like a good time. And it's a very high threshold. So it seems like it makes sense. There have been a lot of questions we've been taking from shareholders to ask on Saturday of Warren and Greg Abel and Ajit Jain. A lot of the usual suspects. Why are you collecting so much cash? Will you ever pay out a dividend? Do you have those sort of questions, too, or do you have answers on some of those things? I think the when I think about the dividend, I think about Berkshire really does play a long game. Right. And having the capacity to build value over many years and having the capacity to be able to take on major acquisitions has been an important part.

6:31I think that we don't see the cash as sitting there idle. We see it as a strategic asset. And when you think about what's going on right now in the world, there's really no other company in the world that has a fortress of a balance sheet that also could be used to help stabilize or provide liquidity if some major financial market dislocation happened. Certainly that was the case back in 2008, 2009. I'm not making any predictions, but I do think that having that asset and having the trust that Berkshire has as a company to be able to use that asset if needed is, I think, a great comfort. A lot of times those deals happened quickly, almost overnight.

7:10I don't think board members even knew about some of these deals that came through, because that's part of the power of this, too, is to be able to get a quick deal without getting it tied up for forever. How does that sit with you? I agree with that. I think that's one of the things that, yes, actually our board often hasn't known exactly what is going on. And I don't think we should necessarily. I think Warren has been proven one of the top allocators of capital in the history of time. So I think he can make the right decisions. He's particularly strong at understanding how to assess risk and to come in on the other side of things from long experience in insurance and capital markets in general.

7:47What about Greg Abel, his successor? Does he have that same sort of free reign with some of those things? You know, actually, I think in the last year, the board and really Greg and Warren have moved from sort of preparing for successions to actually practicing it. Greg's gotten much more involved with capital allocation decisions. I know he's earned the trust of the board and of Warren in that. And so I think increasingly he is taking on that leadership. We don't really even see him as a CEO and waiting. He's taking on the leadership capacity right now. He reinforces a lot of the values of Berkshire that everyone is here to get reminded of over this next couple of days.

8:29So, yeah, I think he's and he's really showing that he has broad capabilities beyond operations where he's also very excellent. So very quickly, you are not only the board of Berkshire Hathaway, but on Costco and at Vail Resorts, too. So you really get a view of the consumer from every angle, every part of the spectrum. What do you think is happening with the consumer right now? I think the consumer is increasingly a little bit cautious. I think the bigger thing, though, is that it's just they're losing confidence. I mean, you're seeing a lot of companies reporting earnings that are in top line that's sort of in line in Q1, but guidance is mixed.

9:08And I think just all of the mixed policy that's coming out of the government and economic policy around tariffs has got a lot of people wondering what's happening. And it's not that, I mean, you could plan for it if it stayed stable, but it's changed a number of times. So I think the consumer's withdrawing a little bit. In some cases, I think they probably spent a little bit more in March to try to lock in prices because this will be, you know, raise prices for everybody. So I think that's, I think the consumer is nervous. And I think that's, and it needs, the consumers need stability in what the outlook is.

9:44I think in businesses, you know, consumers are scared by headlines, but businesses can't plan on headlines. They have to plan on the lead time of getting their supply. And so those supply chains take 12 to 24 months to alter, and that's already happening. And so then it's sort of self-reinforcing because the businesses are starting to react to this, and the consumer doesn't know, you know, what prices are going to be, whether they're going to have a job. So I think it's a kind of scary time, mostly about expectations about the future more than right now. We've heard some reports that, you know, the president was warned a couple of weeks ago when Walmart and Target and Home Depot went to the Oval Office that there could potentially be shortages of some items, things that were hard to find.

10:25Is that your prediction on some of these things or do you think we'll manage and get through? I mean, I wouldn't make a prediction, but it's logical, right? You're seeing very significant imports from China that need to be moved around to other countries. And, you know, there's already a number of global countries that are contributing to our supply chain, but it doesn't happen overnight. And so I don't know if there will be supply chain shortages, but it certainly makes sense that when you have a major disruption like this in a supply chain, that there could be. Sue Decker, again, the lead director here at Berkshire Hathaway.

10:59And Sue, thank you. Thank you. Great to see you. You too.

11:13This is just the beginning of our Squawk Pod reports coverage of the 2025 Berkshire Hathaway annual shareholder meeting. Make sure you hit that follow button so you're notified every time we publish from our weekend in Omaha. We have so much more content coming your way, like the question and answer sessions that make up the meeting itself, and a special classic episode remembering the late, long-time Berkshire Hathaway vice chair Charlie Munger and his legacy. You can find video clips, transcripts, and lots of information on CNBC's Buffett Archive online. Go to buffett.cnbc.com. Squawk Pod is our daily podcast featuring the best moments and guest interviews from the Squawk Box Morning Show.

11:50Plus, a little extra, like trips to Omaha. Keep tuning in.