25.11.10
버크셔 해서웨이 주식회사
보도자료
즉시 배포용
오마하, 네브래스카 (BRK.A; BRK.B) – 2025년 11월 10일
오늘, 워런 E. 버핏은 A주 1,800주를 B주 2,700,000주로 전환하여 이 B주를 네 개의 가족 재단에 기부했습니다.
• 수전 톰슨 버핏 재단(The Susan Thompson Buffett Foundation) – 1,500,000주
• 셔우드 재단(The Sherwood Foundation) – 400,000주
• 하워드 G. 버핏 재단(The Howard G. Buffett Foundation) – 400,000주
• 노보 재단(NoVo Foundation) – 400,000주
이 기부는 오늘 모두 전달되었습니다.
주주 여러분께
이제 저는 더 이상 버크셔 해서웨이의 연례보고서를 직접 작성하거나,
연례 주주총회에서 끝없이 이야기하지 않을 것입니다.
영국식 표현을 빌리자면, “조용히 물러나려 합니다.”
…어느 정도는요.
올해 말부터 그렉 에이블(Greg Abel) 이 CEO로서 회사를 이끌게 됩니다.
그렉은 훌륭한 관리자이자, 지칠 줄 모르는 근면한 사람이며, 정직한 소통자입니다.
그의 긴 재임을 기대해 주시기 바랍니다.
저는 앞으로 매년 추수감사절 메시지를 통해 여러분, 그리고 제 자녀들과 계속 대화를 이어갈 것입니다.
버크셔의 주주들은 특별한 사람들입니다. 그들은 자신의 이익을 다른 이들과 나누는 데 관대합니다.
그런 분들과 소통할 기회를 계속 갖고 싶습니다.
올해는 먼저 잠시 회상을 나눈 뒤, 제 주식 배분 계획을 설명하고,
마지막으로 몇 가지 사업적, 개인적 생각을 말씀드리겠습니다.
회상
올해 추수감사절을 맞으며, 95세까지 살아 있다는 사실에 놀라움과 감사함을 느낍니다.
어릴 적만 해도 이런 결과는 그리 유력해 보이지 않았습니다.
사실 어린 시절, 저는 죽을 뻔한 적이 있었습니다.
1938년, 오마하의 병원은 ‘가톨릭 병원’과 ‘개신교 병원’으로 나뉘어 불렸습니다.
우리 가족 주치의였던 할리 홋츠(Harley Hotz) 는 친절한 가톨릭 의사였고, 왕진을 다니며
항상 작은 검은 가방을 들고 다녔습니다. 그는 저를 “스키퍼(Skipper)”라고 불렀습니다.
어느 날 복통이 심해졌을 때, 홋츠 박사는 “내일이면 괜찮을 거야.”라며 돌아갔지만,
곧 마음이 불안해졌는지 다시 연락을 주어 세인트 캐서린 병원(St. Catherine’s Hospital) 로
응급 수술을 보내줬습니다. 결과적으로 급성 맹장염 수술로 목숨을 건졌습니다.
그 병원은 수녀들이 운영했는데, 저는 그곳 생활을 꽤 즐겼습니다.
심지어 담임선생님인 매드슨 양(Miss Madsen) 이 반 친구 30명에게 제게 편지를 쓰게 했는데,
저는 남학생 편지는 버리고 여학생 편지만 여러 번 읽었습니다. 병원 생활도 나쁘지 않더군요.
회복 중 가장 기억에 남는 선물은 숙모 에디(Aunt Edie) 가 가져다준 지문 채취 세트였습니다.
저는 그걸로 병원 수녀들의 지문을 모두 찍었죠.
‘언젠가 나쁜 짓을 하는 수녀가 나오면 FBI가 나를 칭찬하겠지!’라는 상상을 하며 말이죠.
물론 현실이 되지는 않았습니다. 아이러니하게도, 후에 FBI 국장 J. 에드가 후버가
직권 남용으로 오히려 욕을 먹게 되었죠.
그 시절, 썰매·자전거·야구글러브·전기기차는 아이들의 로망이었습니다.
그런 1930년대 오마하에서, 저는 훗날 제 인생에 큰 영향을 준 몇몇 이들과
아주 가까운 곳에서 자라났습니다 — 그중에는 찰리 멍거(Charlie Munger) 도 있었습니다.
찰리 멍거와의 인연
찰리는 제 인생의 64년 친구였습니다.
1930년대 그도 오마하에서 살았고, 제가 1958년부터 지금까지 살고 있는 집에서
단 한 블록 떨어진 곳에 살았습니다.
찰리는 저보다 6년 반 연상이었고, 1940년 여름엔 제 할아버지의 식료품점에서
하루 10시간 일하고 2달러를 받았습니다.
그다음 해에 저도 같은 일을 했지만, 우리는 그때 만나지 않았습니다.
첫 만남은 1959년, 찰리 35세, 저 28세 때였습니다.
찰리는 제게 최고의 스승이자 형 같은 존재였고, 우리는 단 한 번도 다툰 적이 없습니다.
그의 어휘에 “내가 그랬잖아(I told you so)”는 없었습니다.
오마하의 또 다른 인물들
• 스탠 립시(Stan Lipsey) : 1968년 오마하 선(Sun) 신문을 버크셔에 팔았고,
이후 버펄로로 옮겨 버펄로 뉴스를 부활시켰습니다.
그의 덕분에 초기 버크셔는 큰 수익을 얻었습니다.
• 월터 스콧 주니어(Walter Scott Jr.) :
1999년 미드아메리칸 에너지(MidAmerican Energy) 를 버크셔에 합병시킨 인물이며,
네브래스카 주의 대표적 자선가였습니다.
• 돈 키오( Don Keough) : 제 바로 맞은편 집에 살던 이웃이자,
훗날 코카콜라 사의 사장이 된 인물입니다.
그는 1985년 “뉴 코크(New Coke)” 실패 후, 대중에게 공개적으로 사과하며
“올드 코크”를 부활시킨 명연설로 유명합니다.
• 아짓 자인(Ajit Jain) 과 그렉 에이블(Greg Abel) 역시
1990년대 후반 오마하에 거주했습니다.
(그렉은 제 집에서 몇 블록 떨어진 곳에 살았지만, 당시엔 만나지 못했습니다.)
“오마하 물에 뭔가 특별한 게 있는 걸까요?”
오마하로의 귀환
1954년 저는 뉴욕에서 벤저민 그레이엄 밑에서 일했지만,
1956년 다시 오마하로 돌아왔고, 그 후로는 한 번도 떠나지 않았습니다.
제 세 자녀와 손주들도 모두 오마하에서 자랐습니다.
저는 공립학교 교육을 신뢰했고, 그 선택이 자랑스럽습니다.
노년, 그리고 ‘운(Luck)’
저는 95세가 된 지금까지 놀라울 정도로 운이 좋은 삶을 살았습니다.
솔직히 말해, 저는 태어날 때부터 **“미국에서 태어난 건강한 백인 남성”**이라는
복권에 당첨된 셈입니다. 제 여동생들은 저보다 더 똑똑했지만,
그 시절 여성에게 주어진 기회는 달랐습니다.
운(Lady Luck)은 불공평합니다.
어떤 이는 태어나자마자 부를 상속받지만, 어떤 이는 지옥 같은 환경에서 시작합니다.
저는 운이 따라준 사람입니다.
하지만 ‘시간의 신(Father Time)’은 공평합니다.
그는 누구도 이기지 못하죠.
저 역시 이제 시력, 균형감각, 기억력 모두 점점 줄고 있습니다.
그럼에도 불구하고, 저는 여전히 매일 회사에 나가며 일합니다.
아직도 가끔 좋은 아이디어가 떠오르거든요.
앞으로의 계획
제 자녀들은 이제 각각 72세, 70세, 67세입니다.
제가 세상을 떠난 뒤 그들이 너무 늙기 전에 재단을 잘 운영하도록,
이제 생전 기부 속도를 높이기로 결정했습니다.
이것은 버크셔 주식에 대한 제 신념이 변해서가 아닙니다.
그렉 에이블은 제 기대 이상으로 훌륭한 CEO입니다.
그렉은 버크셔의 사업 전반을 깊이 이해하고 있으며,
**“부를 과시하거나, 은퇴 후 편히 살고자 하는 욕망이 없는 CEO”**입니다.
그가 건강하게 수십 년을 더 이끌어가길 바랍니다.
경영과 보상에 대한 생각
CEO 보수를 직원 평균 급여와 비교 공개하는 제도는
좋은 의도로 시작했지만, 오히려 질투와 보상 인플레이션만 키웠습니다.
CEO들은 “경쟁사 CEO가 나보다 많이 받는다”며 보수를 올렸고,
자신에게 유리한 이사회를 구성했습니다.
질투와 탐욕은 함께 걷습니다.
버크셔의 미래
버크셔는 여전히 평균 이상의 전망을 가진 회사입니다.
하지만 규모가 커질수록 상대적 성장률은 낮아질 수밖에 없습니다.
그럼에도 불구하고, 버크셔는 위험이 가장 낮고, 주주 친화적인 회사 중 하나입니다.
주가가 50% 이상 떨어질 때도 있을 것입니다.
그러나 미국은 회복할 것이고, 버크셔도 회복할 것입니다.
마지막 조언
저는 인생의 후반부가 전반부보다 훨씬 더 좋았습니다.
과거의 실수를 너무 자책하지 마세요. 조금이라도 배우고, 앞으로 나아가면 됩니다.
좋은 롤모델을 찾아 모방하세요.
예를 들어, 톰 머피(Tom Murphy)는 최고의 인물입니다.
노벨상 창시자 알프레드 노벨은 자신이 죽었다는 잘못된 부고를 읽고
삶을 바꾸었다고 합니다.
여러분은 그런 우연을 기다리지 말고, “내 부고에 뭐라고 쓰이길 바라는가?”
스스로 정하고 그에 걸맞은 삶을 사세요.
진정한 위대함은 돈, 권력, 명성에서 오지 않습니다.
누군가를 돕는 모든 행위에서 옵니다.
친절은 공짜이지만, 그 가치에는 값이 없습니다.
청소부든 회장이든, 모두 같은 인간임을 잊지 마세요.
결론
모든 분께 행복한 추수감사절을 기원합니다.
“못된 사람들”에게도요 — 변하기엔 결코 늦지 않습니다.
그리고 미국이 준 기회를 감사히 여기세요.
하지만 그 보상이 항상 공정하진 않다는 것도 기억하세요.
좋은 영웅을 선택하고, 그를 닮으세요.
완벽할 수는 없지만, 더 나은 사람은 될 수 있습니다.
버크셔 해서웨이에 대하여
버크셔 해서웨이와 그 자회사는
보험 및 재보험, 유틸리티와 에너지, 화물 철도 운송, 제조, 서비스 및 소매업 등
다양한 사업을 영위하고 있습니다.
버크셔의 보통주는 뉴욕 증권거래소에 상장되어 있으며,
거래 기호는 BRK.A 와 BRK.B 입니다.
BERKSHIRE HATHAWAY INC.
NEWS RELEASE
FOR IMMEDIATE RELEASE Omaha, NE (BRK.A; BRK.B) –
November 10, 2025
Today, Warren E. Buffett converted 1,800 A shares into 2,700,000 B shares in order to give these B
shares to four family foundations: 1,500,000 shares to The Susan Thompson Buffett Foundation and
400,000 shares to each of The Sherwood Foundation, The Howard G. Buffett Foundation and NoVo
Foundation. These donations have been delivered today.
Mr. Buffett’s comments to his fellow shareholders follow:
* * * * * * * * * * * *
To My Fellow Shareholders:
I will no longer be writing Berkshire’s annual report or talking endlessly at the annual
meeting. As the British would say, I’m “going quiet.”
Sort of.
Greg Abel will become the boss at yearend. He is a great manager, a tireless worker and an
honest communicator. Wish him an extended tenure.
I will continue talking to you and my children about Berkshire via my annual Thanksgiving
message. Berkshire’s individual shareholders are a very special group who are unusually generous in
sharing their gains with others less fortunate. I enjoy the chance to keep in touch with you. Indulge
me this year as I first reminisce a bit. After that, I will discuss the plans for distribution of my
Berkshire shares. Finally, I will offer a few business and personal observations.
* * * * * * * * * * * *
As Thanksgiving approaches, I’m grateful and surprised by my luck in being alive at 95.
When I was young, this outcome did not look like a good bet. Early on, I nearly died.
It was 1938 and Omaha hospitals were then thought of by its citizens as either Catholic or
Protestant, a classification that seemed natural at the time.
Our family doctor, Harley Hotz, was a friendly Catholic who made house calls toting a black
bag. Dr. Hotz called me Skipper and never charged much for his visits. When I experienced a bad
bellyache in 1938, Dr. Hotz came by and, after probing a bit, told me I would be OK in the morning. He then went home, had dinner and played a little bridge. Dr. Hotz couldn’t, however, get my
somewhat peculiar symptoms out of his mind and later that night he dispatched me to St. Catherine’s
Hospital for an emergency appendectomy. During the next three weeks, I felt like I was in a nunnery,
and began enjoying my new “podium.” I liked to talk – yes, even then – and the nuns embraced me.
To top things off, Miss Madsen, my third-grade teacher, told my 30 classmates to each write
me a letter. I probably threw away the letters from the boys but read and reread those from the girls;
hospitalization had its rewards.
The highlight of my recovery – which actually was dicey for much of the first week – was a
gift from my wonderful Aunt Edie. She brought me a very professional-looking fingerprinting set,
and I promptly fingerprinted all of my attending nuns. (I was probably the first Protestant kid they
had seen at St. Catherine’s and they didn’t know what to expect.)
My theory – totally nutty, of course – was that someday a nun would go bad and the FBI
would find that they had neglected to fingerprint nuns. The FBI and its director, J. Edgar Hoover, had
become revered by Americans in the 1930s, and I envisioned Mr. Hoover, himself, coming to Omaha
to inspect my invaluable collection. I further fantasized that J. Edgar and I would quickly identify
and apprehend the wayward nun. National fame seemed certain.
Obviously, my fantasy never materialized. But, ironically, some years later it became clear
that I should have fingerprinted J. Edgar himself as he became disgraced for misusing his post.
Well, that was Omaha in the 1930s, when a sled, a bicycle, a baseball glove and an electric
train were coveted by me and my friends. Let’s look at a few other kids from that era, who grew up
very nearby and greatly influenced my life but of whom I was for long unaware.
I’ll begin with Charlie Munger, my best pal for 64 years. In the 1930s, Charlie lived a block
away from the house I have owned and occupied since 1958.
Early on, I missed befriending Charlie by a whisker. Charlie, 6 years older than I, worked
in the summer of 1940 at my grandfather’s grocery store, earning $2 for a 10-hour day. (Thrift runs
deep in Buffett blood.) The following year I did similar work at the store, but I never met Charlie
until 1959 when he was 35 and I was 28.
After serving in World War II, Charlie graduated from Harvard Law and then moved
permanently to California. Charlie, however, forever talked of his early years in Omaha as formative.
For more than 60 years, Charlie had a huge impact on me and could not have been a better teacher
and protective “big brother.” We had differences but never had an argument. “I told you so” was not
in his vocabulary.
In 1958, I bought my first and only home. Of course, it was in Omaha, located about two
miles from where I grew up (loosely defined), less than two blocks from my in-laws, about six blocks
from the Buffett grocery store and a 6-7-minute drive from the office building where I have worked
for 64 years. Let’s move on to another Omahan, Stan Lipsey. Stan sold the Omaha Sun Newspapers
(weeklies) to Berkshire in 1968 and a decade later moved to Buffalo at my request. The Buffalo
Evening News, owned by a Berkshire affiliate, was then locked in a battle to the death with its
morning competitor who published Buffalo’s only Sunday paper. And we were losing.
Stan eventually built our new Sunday product, and for some years our paper – formerly
hemorrhaging cash – earned over 100% annually (pre-tax) on our $33 million investment. This was
important money to Berkshire in the early 1980s.
Stan grew up about five blocks from my home. One of Stan’s neighbors was Walter Scott, Jr.
Walter, you will remember, brought MidAmerican Energy to Berkshire in 1999. He was also a valued
Berkshire director until his death in 2021 and a very close friend. Walter was Nebraska’s
philanthropic leader for decades and both Omaha and the state carries his imprint.
Walter attended Benson High School, which I was scheduled to attend as well – until my dad
surprised everyone in 1942 by beating a four-term incumbent in a Congressional race. Life is full of
surprises.
Wait, there’s more.
In 1959, Don Keough and his young family lived in a home located directly across the street
from my house and about 100 yards away from where the Munger family had lived. Don was then a
coffee salesman but was destined to become president of Coca-Cola as well as a devoted director of
Berkshire.
When I met Don, he was earning $12,000 a year while he and his wife Mickie were raising
five children, all destined for Catholic schools (with tuition requirements).
Our families became fast friends. Don came from a farm in northwest Iowa and graduated
from Omaha’s Creighton University. Early on, he married Mickie, an Omaha girl. After joining Coke,
Don went on to become legendary around the globe.
In 1985, when Don was president of Coke, the company launched its ill-fated New Coke.
Don made a famous speech in which he apologized to the public and reinstated “Old” Coke. This
change of heart took place after Don explained that Coke incoming mail addressed to “Supreme
Idiot” was promptly delivered to his desk. His “withdrawal” speech is a classic and can be viewed on
YouTube. He cheerfully acknowledged that, in truth, the Coca-Cola product belonged to the public
and not to the company. Sales subsequently soared.
You can watch Don on CharlieRose.com in a wonderful interview. (Tom Murphy and Kay
Graham have a couple of gems as well.) Like Charlie Munger, Don forever remained a Midwestern
boy, enthusiastic, friendly and American to the core.
Finally, Ajit Jain, born and raised in India, as well as Greg Abel, our Canadian CEO-to-be,
each lived in Omaha for several years late in the 20th Century. Indeed, in the 1990s, Greg lived only a
few blocks away from me on Farnam Street, though we never met at the time.
Can it be that there is some magic ingredient in Omaha’s water? * * * * * * * * * * * *
I lived a few teenage years in Washington, DC (when my dad was in Congress) and in 1954 I
took what I thought would be a permanent job in Manhattan. There I was treated wonderfully by Ben
Graham and Jerry Newman and made many life-long friends. New York had unique assets – and still
does. Nevertheless, in 1956, after only 1½ years, I returned to Omaha, never to wander again.
Subsequently, my three children, as well as several grandchildren, were raised in Omaha. My
children always attended public schools (graduating from the same high school that educated my dad
(class of 1921), my first wife, Susie (class of 1950) as well as Charlie, Stan Lipsey, Irv and Ron
Blumkin, who were key to growing Nebraska Furniture Mart, and Jack Ringwalt (class of 1923),
who founded National Indemnity and sold it to Berkshire in 1967 where it became the base upon
which our huge P/C operation was constructed.
* * * * * * * * * * * *
Our country has many great companies, great schools, great medical facilities and each
definitely has its own special advantages along with talented people. But I feel very lucky to have
had the good fortune to make many lifelong friends, to meet both of my wives, to receive a great start
in education at public schools, to meet many interesting and friendly adult Omahans when I was very
young, and to make a wide variety of friends in the Nebraska National Guard. In short, Nebraska has
been home.
Looking back I feel that both Berkshire and I did better because of our base in Omaha than if
I had resided anywhere else. The center of the United States was a very good place to be born, to
raise a family, and to build a business. Through dumb luck, I drew a ridiculously long straw at birth.
* * * * * * * * * * * *
Now let’s move on to my advanced age. My genes haven’t been particularly helpful – the
family’s all-time record for longevity (admittedly family records get fuzzy as you work backwards)
was 92 until I came along. But I have had wise, friendly and dedicated Omaha doctors, starting with
Harley Hotz, and continuing to this day. At least three times, my life has been saved, each with
doctors based within a few miles from my home. (I have given up fingerprinting nurses, however.
You can get away with many eccentricities at 95 . . . . . but there are limits.)
* * * * * * * * * * * *
Those who reach old age need a huge dose of good luck, daily escaping banana peels, natural
disasters, drunk or distracted drivers, lightning strikes, you name it.
But Lady Luck is fickle and – no other term fits – wildly unfair. In many cases, our leaders
and the rich have received far more than their share of luck – which, too often, the recipients prefer
not to acknowledge. Dynastic inheritors have achieved lifetime financial independence the moment
they emerged from the womb, while others have arrived, facing a hell-hole during their early life or,
worse, disabling physical or mental infirmities that rob them of what I have taken for granted. In
many heavily-populated parts of the world, I would likely have had a miserable life and my sisters
would have had one even worse.
I was born in 1930 healthy, reasonably intelligent, white, male and in America. Wow! Thank
you, Lady Luck. My sisters had equal intelligence and better personalities than I but faced a much
different outlook. Lady Luck continued to drop by during much of my life, but she has better things
to do than work with those in their 90s. Luck has its limits. Father Time, to the contrary, now finds me more interesting as I age. And he is undefeated;
for him, everyone ends up on his score card as “wins.” When balance, sight, hearing and memory are
all on a persistently downward slope, you know Father Time is in the neighborhood.
I was late in becoming old – its onset materially varies – but once it appears, it is not to be
denied.
To my surprise, I generally feel good. Though I move slowly and read with increasing
difficulty, I am at the office five days a week where I work with wonderful people. Occasionally, I
get a useful idea or am approached with an offer we might not otherwise have received. Because of
Berkshire’s size and because of market levels, ideas are few – but not zero.
* * * * * * * * * * * *
My unexpected longevity, however, has unavoidable consequences of major importance to my
family and the achievement of my charitable objectives.
Let’s explore them.
What Comes Next
My children are all above normal retirement age, having reached 72, 70 and 67. It would be a
mistake to wager that all three – now at their peak in many respects – will enjoy my exceptional luck
in delayed aging. To improve the probability that they will dispose of what will essentially be my
entire estate before alternate trustees replace them, I need to step up the pace of lifetime gifts to their
three foundations. My children are now at their prime in respect to experience and wisdom but have
yet to enter old age. That “honeymoon” period will not last forever.
Fortunately, a course correction is easy to execute. There is, however, one additional factor to
consider: I would like to keep a significant amount of “A” shares until Berkshire shareholders
develop the comfort with Greg that Charlie and I long enjoyed. That level of confidence shouldn’t
take long. My children are already 100% behind Greg as are the Berkshire directors.
All three children now have the maturity, brains, energy and instincts to disburse a large
fortune. They will also have the advantage of being above ground when I am long gone and, if
necessary, can adopt policies both anticipatory and reactive to federal tax policies or other
developments affecting philanthropy. They may well need to adapt to a significantly changing world
around them. Ruling from the grave does not have a great record, and I have never had an urge to do
so.
Fortunately, all three children received a dominant dosage of their genes from their mother.
As the decades have passed, I have also become a better model for their thinking and behavior. I will
never, however, achieve parity with their mother.
My children have three alternate trustees in case of any premature deaths or disabilities. The
alternates are not ranked or tied to a specific child. All three are exceptional humans and wise in the
ways of the world. They have no conflicting motives. I have assured my children that they do not need to perform miracles nor fear failures or
disappointments. These are inevitable, and I have made my share. They simply need to improve
somewhat upon what generally is achieved by government activities and/or private philanthropy,
recognizing these other methods of redistribution of wealth have shortcomings as well.
Early on, I contemplated various grand philanthropic plans. Though I was stubborn, these did
not prove feasible. During my many years, I’ve also watched ill-conceived wealth transfers by
political hacks, dynastic choices and, yes, inept or quirky philanthropists.
If my children simply do a decent job, they can be certain that their mother and I would be
pleased. Their instincts are good and they each have had years of practice with very small sums
initially that have been irregularly increased to more than $500 million annually.
All three like working long hours to help others, each in their own way.
* * * * * * * * * * * *
The acceleration of my lifetime gifts to my children’s foundations in no way reflects any
change in my views about Berkshire’s prospects. Greg Abel has more than met the high expectations
I had for him when I first thought he should be Berkshire’s next CEO. He understands many of our
businesses and personnel far better than I now do, and he is a very fast learner about matters many
CEOs don’t even consider. I can’t think of a CEO, a management consultant, an academic, a member
of government – you name it – that I would select over Greg to handle your savings and mine.
Greg understands, for example, far more about both the upside potential and the dangers of
our P/C insurance business than do a great many long-time P/C executives. My hope is that his health
remains good for several decades. With a little luck, Berkshire should require only five or six CEOs
over the next century. It should particularly avoid those whose goal is to retire at 65, to become look-
at-me rich or to initiate a dynasty.
One unpleasant reality: Occasionally, a wonderful and loyal CEO of the parent or a
subsidiary will succumb to dementia, Alzheimer’s or another debilitating and long-term disease.
Charlie and I encountered this problem several times and failed to act. This failure can be a
huge mistake. The Board must be alert to this possibility at the CEO level and the CEO must be alert
to the possibility at subsidiaries. This is easier said than done; I could cite a few examples from the
past at major companies. Directors should be alert and speak up is all that I can advise.
During my lifetime, reformers sought to embarrass CEOs by requiring the disclosure of the
compensation of the boss compared to what was being paid to the average employee. Proxy
statements promptly ballooned to 100-plus pages compared to 20 or less earlier.
But the good intentions didn’t work; instead they backfired. Based on the majority of my
observations – the CEO of company “A” looked at his competitor at company “B” and subtly
conveyed to his board that he should be worth more. Of course, he also boosted the pay of directors
and was careful who he placed on the compensation committee. The new rules produced envy, not
moderation. The ratcheting took on a life of its own. What often bothers very wealthy CEOs – they are
human, after all – is that other CEOs are getting even richer. Envy and greed walk hand in hand. And
what consultant ever recommended a serious cut in CEO compensation or board payments?
* * * * * * * * * * * *
In aggregate, Berkshire’s businesses have moderately better-than-average prospects, led by a
few non-correlated and sizable gems. However, a decade or two from now, there will be many
companies that have done better than Berkshire; our size takes its toll.
Berkshire has less chance of a devastating disaster than any business I know. And, Berkshire
has a more shareholder-conscious management and board than almost any company with which I am
familiar (and I’ve seen a lot). Finally, Berkshire will always be managed in a manner that will make
its existence an asset to the United States and eschew activities that would lead it to become a
supplicant. Over time, our managers should grow quite wealthy – they have important
responsibilities – but do not have the desire for dynastic or look-at-me wealth.
Our stock price will move capriciously, occasionally falling 50% or so as has happened three
times in 60 years under present management. Don’t despair; America will come back and so will
Berkshire shares.
A Few Final Thoughts
One perhaps self-serving observation. I’m happy to say I feel better about the second half of
my life than the first. My advice: Don’t beat yourself up over past mistakes – learn at least a little
from them and move on. It is never too late to improve. Get the right heroes and copy them. You can
start with Tom Murphy; he was the best.
Remember Alfred Nobel, later of Nobel Prize fame, who – reportedly – read his own obituary
that was mistakenly printed when his brother died and a newspaper got mixed up. He was horrified at
what he read and realized he should change his behavior.
Don’t count on a newsroom mix-up: Decide what you would like your obituary to say and
live the life to deserve it.
Greatness does not come about through accumulating great amounts of money, great amounts
of publicity or great power in government. When you help someone in any of thousands of ways, you
help the world. Kindness is costless but also priceless. Whether you are religious or not, it’s hard to
beat The Golden Rule as a guide to behavior.
I write this as one who has been thoughtless countless times and made many mistakes but
also became very lucky in learning from some wonderful friends how to behave better (still a long
way from perfect, however). Keep in mind that the cleaning lady is as much a human being as the
Chairman.
* * * * * * * * * * * *
I wish all who read this a very happy Thanksgiving. Yes, even the jerks; it’s never too late to
change. Remember to thank America for maximizing your opportunities. But it is – inevitably –
capricious and sometimes venal in distributing its rewards. Choose your heroes very carefully and then emulate them. You will never be perfect, but you
can always be better.
About Berkshire
Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and
reinsurance, utilities and energy, freight rail transportation, manufacturing, services and retailing.
Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A