Tens of thousands of investors flocked to Omaha, Neb., this weekend, but it was not for the steak. Instead, as they do every spring, these investors were attending Berkshire Hathaway’s annual meeting with the hopes of asking a question of its chief executive, Warren E. Buffett, DealBook’s Michael J. de la Merced writes.
As is usually the case, the meeting on Saturday was “light and buoyant,†Mr. de la Merced writes. The closest thing to controversy was Mr. Buffett’s abstention from voting over a proposal by Coke to bolster stock-option grants to top management, a notable move given Mr. Buffett’s longstanding opposition to such plans. Mr. Buffett said that he had found the plan excessive, but, when asked why he did not raise the issue publicly, he said that he had no desire to go to war with Coke.
Mr. Buffett also delivered an unusual view on corporate pay disclosures. When asked whether companies should disclose the compensation of more executives beyond what is legally required, he argued that revealing that information would not necessarily lead to lower compensation packages, Mr. de la Merced writes. Mr. Buffett did not drop any hints about who would be Berkshire’s next chief executive. He did, however, say that he was looking for a significant acquisition that would bolster Berkshire’s earnings power, perhaps through the conglomerate’s energy arm.
For those who could not make the event, Saturday’s live blog of the meeting is available here.
WALL STREET’S CHANGE OF HEART  | Wall Street banks have long opposed a rule that would require them to push some of their derivatives trading into less-protected entities. But in recent weeks, they have started to eagerly embrace the changes the hated rule demands, Peter Eavis writes in DealBook. The banks’ turnabout, however, is not because they have suddenly come to believe in the rule.
The regulation in question is called the swaps push-out rule, part of the Dodd-Frank Act. Banks make huge amounts of money from trading in derivatives â€" financial contracts that can be used to bet on things like interest rates. Swaps are a type of derivative. Until now, banks have been able to do nearly all of their derivatives trading in their traditional bank subsidiaries, which benefit from deposit insurance and other forms of federal support. These subsidiaries usually have higher credit ratings, which enable the banks to get better terms in the derivatives bets they make with their trading partner and bolstering the banks’ profits.
Dodd-Frank’s swaps push-out rule seeks to reduce those effective government subsidies on Wall Street trading. It requires certain types of derivatives to be pushed out of insured banks into another part of the bank that does not benefit from federal backing. This is exactly what the banks had been opposing, but in recent days, they have started to shift substantial amounts of derivatives trades into offshore affiliates that the parent banks do not guarantee. Why the about-face? In short, Mr. Eavis writes, banks “are trying to avoid other derivatives regulations that are unrelated to the push-out rule.â€
SOTHEBY’S POISON PILL UPHELD  | Donald F. Parsons, a vice chancellor of Delaware’s Court of Chancery, has blocked efforts by the hedge fund magnate Daniel S. Loeb to overturn a crucial corporate defense at the auction house Sotheby’s, Michael J. de la Merced and Alexandra Stevenson write in DealBook. In the ruling on Friday, the judge decided that he would not overturn a so-called poison pill plan that limits Mr. Loeb to no more than 10 percent of Sotheby’s shares while letting passive investors holds as much as 20 percent.
Companies have used poison pill defenses for decades, but the auction house’s version ignited debate within the corporate governance community because it specifically discriminated against activist investors. Mr. Loeb’s hedge fund, Third Point, had contended that Sotheby’s poison pill unfairly impeded his ability to wage his campaign, but the judge ruled that Mr. Loeb’s argument was flawed. For one, Vice Chancellor Parsons noted that Mr. Loeb had roughly 10 times the number of shares that Sotheby’s board now owns. Sotheby’s annual shareholder meeting is on Tuesday.
ON THE AGENDA  | The purchasing managers’ index for services is out at 9:45 a.m. The ISM nonmanufacturing index is released at 10 a.m. Pfizer reports first-quarter earnings before the bell. Bill Gates, the chairman of Microsoft, is on CNBC at 8:20 a.m. The activist investor William A. Ackman is on CNBC at 3:30 p.m. Warren E. Buffett, Bill Gates and Charlie Munger are on Fox Business Network at 9:30 a.m. Happy Cinco de Mayo.
THAT’S HORSE RACING  | A horse named Central Banker held on to win the Churchill Downs Stakes in Louisville, Ky., on Saturday. California Chrome won the Kentucky Derby, the first leg of horse racing’s Triple Crown.
HEDGE FUND ASKED S.E.C. TO DELAY DISCLOSURES  | Last November, in a previously undisclosed letter to the Securities and Exchange Commission, the billionaire hedge fund manager David Einhorn asked for a seven-day delay in disclosing that his fund, Greenlight Capital, was amassing a stake of 47 million shares in Micron Technology, Matthew Goldstein writes in DealBook. Mr. Einhorn’s firm said it needed to keep its buying secret â€' and kept out of a regular quarterly report that most money managers file with the agency â€' to prevent a surge in Micron shares.
Mr. Einhorn’s request “illustrates the zealous approach some managers in the $2.7 trillion hedge fund industry take when it comes to keeping their trading positions out of the public eye,†Mr. Goldstein writes. But the move also reflects the risk that can come with being a prominent money manager like Mr. Einhorn, who has not been shy about seeking press coverage when it suits his interest.
The S.E.C. rarely grants requests by investment managers for confidential treatment, Mr. Goldstein adds, but because it can take weeks, or even months, for a request to be reviewed, “a manager gets the benefit of the doubt to keep a position secret simply by asking regulators to consider it.â€
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China’s Baosteel Leads $1.3 Billion Bid for Australian Miner  | Baosteel, a state-owned company, has teamed up with Aurizon Holdings, Australia’s largest rail freight operator, in bidding for Aquila, which is developing a giant iron ore mine in Western Australia’s mineral-rich Pilbara region. DealBook »
Bodice-Ripper in New Hands  | News Corporation announced on Friday that it was buying the romance-novel publisher Harlequin Enterprises for roughly $415 million, The New York Times writes. NEW YORK TIMES
Pfizer Has Yet to Make a Compelling Bid to AstraZeneca’s Shareholders  | Pfizer’s latest offer for its rival seems cheap to shareholders who view AstraZeneca’s turnaround as well advanced, Neil Unmack writes in Reuters Breakingviews. DealBook »
No Regrets for the Founder of Tumblr After Yahoo Sale  | While conceding he was “terrified†going into the deal, David Karp, the founder and chief executive of Tumblr, says he is happy with the autonomy the microblogging service has under its new owner, The New York Times reports. NEW YORK TIMES
Rattner: End Corporate Taxation  | Corporate takeovers and mergers have risen to their highest level since 2007, “fueled in part by American companies’ fleeing the United States to save tax dollars,†Steven Rattner, a Wall Street executive, writes in a New York Times Op-Ed. “These days, tax avoidance feels like a full-fledged business strategy, with American citizens as the losers,†he adds. NEW YORK TIMES
A $4 Billion Wet Blanket on Bank of America’s Party  | An accounting error has cast a shadow over Bank of America’s comeback â€' and shareholders may well want some answers at the annual meeting, Gretchen Morgenson writes in the Fair Game column. NEW YORK TIMES
More Departures Expected From Barclays  | Three more executives of Barclays â€" its global head of mergers, its chairman of investment banking and its Asia-Pacific head â€" are expected to leave, the latest in a series of exits by prominent executives from the British bank. DealBook »
Loans That Avoid Banks? Maybe Not  | Peer-to-peer finance has a new swarm of lenders: some of the same kinds of big institutions it once shunned, The New York Times writes. NEW YORK TIMES
Thoma Bravo Raises $3.65 Billion Fund for Buyouts  | The fund is the largest ever raised by Thoma Bravo, and the demand may reflect investor appetite for mature technology companies, which are the private equity firm’s specialty. DealBook »
Private Equity Shows Interest in L.A. Clippers  | The Los Angeles Clippers are said to be attracting interest from private equity investors, The Wall Street Journal reports. WALL STREET JOURNAL
Former SAC Trader Asks for Shorter Sentence  | Michael S. Steinberg, a former trader at the hedge fund SAC Capital Advisors found guilty last year of insider trading, has asked for a two-year sentence, a much shorter term than what was recommended by probation officials, Reuters writes. REUTERS
Rush for Deals Before Top Art Goes to Auction  | As the spring art auction season begins â€' even before the auctioneer steps to the podium â€' outside collectors or investors have locked in guaranteed multimillion dollar prices for blue-chip names, The New York Times writes. NEW YORK TIMES
British Hedge Funds Are Betting Against Bookmakers  | Some of Britain’s biggest hedge funds, including Odey Asset Management, Bluecrest and Marshall Wace, have taken substantial short positions in Ladbrokes and William Hill, Britain’s two largest bookmakers, The Financial Times writes. FINANCIAL TIMES
Ares Management Slumps in Trading Debut  | Shares of Ares Management opened on Friday at $18.15 on the New York Stock Exchange, 4.5 percent below the I.P.O. price. DealBook »
Tech I.P.O.s Go From Frenzy to Fizzle  | It is not completely clear what drove the change in investor attitude toward technology stocks and initial public offerings, Quartz writes. QUARTZ
Prosper, a Peer-to-Peer Lender, Raises $70 Million  | Prosper plans to announce on Monday that it has raised $70 million in a new fund-raising round, one led by the investment firm Francisco Partners. DealBook »
Billions May Not Be Required for Angel Investing  | A new book argues that more people can and should become angel investors, but that they must expect plenty of failures along with the rare big win, Paul Sullivan writes in the Wealth Matters column. NEW YORK TIMES
Airbnb’s Chief Rarely Uses His Desk  | Brian Chesky, a co-founder and the chief executive of Airbnb, says he rarely uses his desk in his company’s offices in a former warehouse. “I think of my desk as a notebook computer or a tablet that is walking with me,†he told The New York Times. NEW YORK TIMES
Mixed Verdict in Apple-Samsung Patent Fight  | The dispute between technology rivals ended with an award of nearly $120 million in damages to Apple and $158,000 to Samsung, The New York Times reports. NEW YORK TIMES
Apple’s Jobs Defied Convention, and Perhaps the Law  | Steve Jobs’s conduct is a reminder that the difference between genius and potentially criminal behavior can be a fine line, James B. Stewart writes in the Common Sense column. NEW YORK TIMES
Jump in Payrolls Is Seen as a Sign of New Optimism …  | After a slowdown at the start of the year, the American economy picked up in April in tandem with the warming weather, expanding payrolls by 288,000, as the jobless rate fell to 6.3 percent, Nelson D. Schwartz writes in The New York Times. NEW YORK TIMES
… But Tepid Wage Growth Is a Potent Sign of a Far-From-Healthy Economy  | A new paper argues that the slow pace of wage growth is the clearest indicator that the recovery is still far from robust, Binyamin Appelbaum writes in The Upshot. NEW YORK TIMES UPSHOT
Portugal Chooses Clean Exit From Bailout  | With promising signs of growth and falling unemployment, Portugal’s prime minister, Pedro Passos Coelho, announced an end to his country’s three-year, $108 billion bailout, The New York Times writes. NEW YORK TIMES
