Buffett Ousted Benjamin Moore CEO In Strategy Dispute - Letter
06/27/2012| 12:42pm US/Eastern
By Erik Holm
The ousted chief executive at Berkshire Hathaway Inc.'s (BRKA, BRKB) Benjamin Moore & Co. may not have been sunk by a lavish party on a boat after all.
Warren Buffett, the head of Berkshire Hathaway, wrote in a letter to the departed CEO, Denis Abrams, that the decision to replace him "was based on a differing view about distribution channels and brand strategy." It wasn't because Mr. Abrams had reportedly hosted a gathering of senior Benjamin Moore executives on a boat in Bermuda just weeks prior to his firing.
Earlier this month, the New York Post reported that the party may have proved to be the final straw in causing Mr. Buffett to fire Mr. Abrams. The Post also said the paint company had made several strategic missteps and morale had fallen on Mr. Abrams' watch.
"The recent story coupling a top management convocation on a boat with the decision to make a management change at Benjamin Moore is completely false," Mr. Buffett wrote in the letter to Mr. Abrams. "I had never heard of the boat trip prior to reading about it in the paper on June 14. There was no reason for you to let me know about the meeting and, if you had, I would have had no objection to it at all."
The letter, dated June 21, was provided to Dow Jones Newswires by a representative of Mr. Abrams. Its authenticity was confirmed by Mr. Buffett's assistant.
Mr. Buffett, who has built Berkshire into a massive conglomerate over more than four decades, is famous for his hands-off management style when it comes to individual units under the Berkshire umbrella. Mr. Buffett's Berkshire conglomerate includes car insurer Geico Corp., railroad Burlington Northern Santa Fe, ice-cream maker Dairy Queen and dozens of other companies.
Mr. Abrams was replaced by Robert Merritt, a longtime executive in the restaurant industry. Mr. Abrams was replaced by Robert Merritt, a longtime executive in the restaurant industry. Mr. Merritt is a director at Ruth's Hospitality Group Inc. (RUTH) and Cosi Inc. (>> Cosi Inc), a board he chaired until 2010. He also served as chief financial officer of the company that owns the Outback Steakhouse chain.
A spokeswoman for Benjamin Moore confirmed Mr. Merritt had replaced Mr. Abrams but declined further comment.
Write to Erik Holm at email@example.com.
Corrections & Amplifications
This item was corrected at 02:10 EDT to correct some of the erroneous information on Robert Merritt's background. Mr. Abrams was replaced by Robert Merritt, a longtime executive in the restaurant industry. Mr. Merritt is a director at Ruth's Hospitality Group Inc. (RUTH) and Cosi Inc. (>> Cosi Inc), a board he chaired until 2010.
Stocks mentioned in the article : Cosi Inc