After you buy shares in the company, you become an owner of the company and being owner means there are responsibilities associated with your holdings. For most of us, our shares do not have enough swing over close votes, but the principle is the same. Management spends a great deal of time and effort to present quarterly reports and all shareholders can vote at the AGM. One of the votes includes compensation for the top 5 or 6 senior executives. One expects if something happened to the top people a replacement would be found to perform at or the same level as the present executives. If someone dies or retires or moves to another company, one of the senior executives would take the place and the company would continue to operate and make profits.

In an article by Jonathan Stempel of Reuters, the Vice Chairman of Berkshire Hathaway Charlie Munger passed away at 99 years of age. Mr. Munger had worked with Warren Buffett for over 45 years and they were great friends. Mr. Buffett is 92 years old.

The good news at Berkshire is they have a succession plan for a long time or since 2006 it was announced. While the people who are expected to move up will be very good, they will not have the same relationship that Charlie and Warren had.

It is noted that the head office of Berkshire Hathaway employs 26 people, the companies that encompass the conglomerate have hundreds of thousands of employees. Berkshire runs a very decentralized operation with great autonomy for the Presidents who run their holdings.

Linking to dividend paying stocks, as a shareholder, one of the concerns you have is the President has cultivated very good people to step in when a vacancy happens at the executive level. One of the elements you invest in is management and you will get a feel for how they work together and who are the expected candidates if people depart. If the company is not family owned, the Board backed by shareholders should have fewer dramatics of who should be in succession process.

There are more questions than answers, till the next time – to raising questions.