Berkshire Hathaway replaces paint retailer CEO amid junket report
Warren Buffett's Berkshire Hathaway Inc has changed chief executives at paint retailer Benjamin Moore, amid a published report that the former CEO used company funds to take top executives on an island jaunt.
A spokeswoman for Benjamin Moore confirmed Denis Abrams was no longer running the 129-year-old company, which Berkshire acquired in late 2000. As of June 6 he was replaced by Bob Merritt, an outside executive.
But the spokeswoman referred all questions about the reasons for the change to Berkshire headquarters in Omaha, Nebraska. Neither Buffett's assistant nor his secretary returned requests for comment on the matter.
Abrams could not immediately be reached for comment. One telephone number for him listed in public directories was incorrect and a second was not answered on Friday afternoon.
The New York Post reported Friday that Berkshire executives traveled to Benjamin Moore headquarters in New Jersey last week and escorted Abrams from the building. Abrams and a group of Benjamin Moore executives went on a company-sponsored yacht trip in Bermuda to celebrate a rise in quarterly sales, the first in five years, the newspaper said.
Berkshire struck a deal to buy Benjamin Moore in November 2000 for roughly $1 billion. Since the deal was made, though, Benjamin Moore has not been prominent in the Berkshire universe. Most years, it does not even rate a mention in the company's annual letter to shareholders, in which Buffett commends certain of his CEOs for the work they have done.
The company is sometimes overshadowed by the rest of Berkshire's housing-related businesses, which suffered greatly during the financial crisis and are still struggling with the effects of the weak housing market. Buffett is more likely to talk about Shaw Carpet or Acme Brick, for example, than he is to bring up the paint business.
Benjamin Moore sells its more than 3,300 paint colors through a network of independent retailers. The company employed nearly 2,300 people as of Dec. 31.
Abrams' departure is the second notable CEO issue for Buffett in a little more than a year. In the spring of 2011 the chief executive of Berkshire unit MidAmerican, David Sokol, left the company amid a stock-trading scandal, after buying shares in a company he was trying to convince Buffett to acquire. Sokol denied anything improper took place.
Sokol was once seen as Buffett's heir apparent, and more than a year later the probe around his departure is still costing Berkshire hundreds of thousands of dollars in regular legal fees.
The Sokol episode cast a shadow on Buffett's famously hands-off style. The 81-year-old "Oracle of Omaha" has bragged that he speaks to some of his CEOs just once a year. — Reuters
Talk of the web