It is tempting to think that Denis Abrams, of Berkshire Hathaway’s (NYSE: BRK.A) Benjamin Moore & Co., was kicked out for hosting a lavish boat party in Bermuda. However, the truth appears more prosaic.
Writing to Abrams, Warren Buffett stated that the matter was one of “differing view[s] about distribution channels and brand strategy.”
The New York Post had printed an exclusive earlier in the month outlining Abrams’ various shortcomings as Benjamin Moore’s leader, suggesting that the party may just have gone too far.
However, as MarketWatch reports, Buffett’s letter emphasizes that this issue played no part in his final decision.
“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.”
Robert Merritt, veteran of the hospitality industry and director at Ruth’s Hospitality Group Inc. (NASDAQ: RUTH), replaced the departing Abrams.
Although the Post holds to its claims, what is unusual about the entire episode is Buffett’s highly personal intervention in the situation. While Buffett’s letter may indeed be spelling out a different, and truer, version of events, it may also be missing a few things.
Jeff Matthews, an author who has taken an interest in Buffett, commented:
“It is completely out of character for him to replace managers on the basis of strategy and ideas about distribution channels. Things must have been really going bad at Benjamin Moore for him to get involved. He hates this stuff.”
And as observers of Berkshire Hathaway will remember, Buffett is noted for very publicly praising good performers while making all criticisms in private.