By Nat Worden Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Washington Post Co. (WPO) raised its dividend and said billionaire investor Warren Buffett will retire from its board of directors when his current term ends in May.
The annual dividend increase of 40 cents a share comes as the company faces the loss of a corporate director whose reputation for value investing and business acumen has boosted its own image as a venerable publisher and for-profit education operator for decades.
Buffett, 80, has served on the publishing company's board of directors since 1974, with an eight-year break when he became a director of Capital Cities. Early in his tenure on the board, he served as a key adviser to the late Katherine Graham, who steered the Washington Post through labor strikes, the Watergate scandal and the controversial publication of the Pentagon Papers during the Vietnam War.
Washington Post Chief Executive Donald Graham, the son of Katherine Graham, said his company's association with Buffett will continue after the chief executive of Berkshire Hathaway Inc. (BRKA, BRKB) leaves its board, which held a meeting Thursday.
"Warren has encouraged us to continue to consult him on Company matters and with the encouragement of our board, calls to the 402 area code will not be decreasing," Graham said in a press release, referring to the area code for Buffett's hometown, Omaha, Neb.
For his part, Buffett voiced his longtime devotion to the Washington Post, stemming from his childhood days as a newspaper delivery boy.
"That love for the product, the company and the management continues unabated today," Buffett said. "I will always be available to help management in any way they request."
Buffett told Fox Business News that he will no longer sit on any corporate boards other than Berkshire's as duties at his own company are taking up all his time. He also told the network that Berkshire will not sell its stake in the Washington Post, which represents nearly 24% of the shares outstanding, according to FactSet Research.
Buffett has acknowledged that planning for succession is under way at Berkshire, sparking widespread speculation about who will replace perhaps the world's most famous investor at the helm of the holding company and insurance conglomerate he built.
His decision to leave the Washington Post's board comes as the company's for-profit education arm, Kaplan, has come under scrutiny due to concerns that its programs leave some students mired in debt with few job prospects.
A New York Times report in November cited a former Kaplan admissions adviser in Chicago who resigned out of concerns about its business practices, who said admissions representatives were trained to "emphasize that Kaplan is owned by The Washington Post, one of the best newspapers in the country, and that Warren Buffett, and Bill Gates's wife, Melinda Gates," were on its board of directors.
Kaplan denied the account. For her part, Melinda Gates resigned from the Washington Post's board three days after that report was published. Gates runs a multibillion-dollar foundation with her husband, Bill, co-founder and former chief executive of Microsoft Corp. (MSFT). She had been on Washington Post's board for six years, and she and her husband have deep ties to Buffett, who has become a major contributor to their foundation.
A Washington Post spokeswoman said Gates' resignation, as well as Buffett's decision to leave the board, were unrelated to the New York Times story. Gates and Buffett couldn't be reached for comment.
Kaplan's business has been the main profit engine at the Washington Post for years as its publishing businesses have struggled along with the broader industry because of the weak economy and the rise of digital media. In October, the company reported its third-quarter earnings surged on improved performance at its Kaplan education and publishing divisions, while the namesake newspaper's advertising revenue climbed for the first time in four years.
Other directors at the Washington Post include IAC/InterActive Corp. (IACI) Chairman Barry Diller and G. Richard Wagoner, who was ousted in 2009 as chief executive of General Motors Co. (GM).
Washington Post didn't say why it was increasing the dividends. Many companies have looked to return value to shareholders in recent quarters by boosting or reinstating their dividends once the need to hoard cash waned thanks to an improving economy.
It lifted its annual dividend to $9.40 a share. The dividend for the first quarter, which was increased by 10 cents to $2.35 a share, is payable on Feb. 11 to shareholders of record on Jan. 31.
Shares of Washington Post were recently up 2.9% at $435.69.Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders
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