A Closer Look at Berkshire Hathaway's 2025 Proxy Statement
More than any other filing, Berkshire's proxy statement both celebrates the company's unique culture and lays out the roadmap for preserving it long into the future
Warren Buffett once said that you can pick up on the personality of a business when reading its annual report. I think that goes double for a company’s proxy statement.
Berkshire Hathaway released its proxy on Friday evening — and, while some people’s eyes glaze over at the prospect of reading another SEC filing, I must admit that I look forward to this one.
The proxy actually tells us a great deal about Berkshire — and how Warren Buffett and Charlie Munger assiduously built the conglomerate in their image. More than any other filing, it both celebrates Berkshire’s unique culture and lays out the roadmap for preserving it long into the future.
Over the weekend, I read through Berkshire’s proxy and pulled out the key points…
80 & Out
I guess we should kick this one off with the big surprise.
For decades, Warren Buffett thumbed his nose at the idea that someone could be “too old” to work for Berkshire Hathaway. In fact, he often joked that operating managers should stay on the job as long as their wits and motivation allowed. “Mrs. B from the [Nebraska] Furniture Mart worked for us until she was 103 and then she left and she died the next year,” said Buffett. “That is a lesson to our managers.”
He seemingly felt the same way about Berkshire’s directors. In 1991, when Ken Chace decided to step down from the board, Buffett wrote that this was a personal decision — and not one forced on Chace due to his advancing years. “We have no mandatory retirement age for directors at Berkshire (and won’t!).” (h/t
)So it understandably came as a bit of a shock to read that Berkshire adopted a new guideline this year that any director over the age of 80 cannot stand for re-election.
As a result, Ronald Olson — who has served faithfully for nearly thirty years — must leave the board in May. His departure drops the number of directors to 13 — and it does not sound like Berkshire intends to replace him.
Basically, Berkshire’s “age is just a number” policy is out — with 80 now the finish line for directors.
This decision all but guarantees plenty of turnover on the Berkshire board over the next decade. Six of the thirteen remaining directors are over the age of 70 — with Wally Weitz just five years from hitting the wall and Ajit Jain aging out in seven. (I’m not a big fan of any policy that deprives the board of Jain’s wisdom, whether he’s an octogenarian or not.)
The only happy news here is that it does not affect Warren Buffett’s role as chairman, as the CEO can remain on the board until retirement. And, even then, the board could ask him to stay on afterwards. The other exception is that any director with 5+% voting power also gets a pass on the age limit. (This, presumably, will spare Howard and Susan Buffett once their father has shuffled off this mortal coil.)
Boardroom Buzz
A position on Berkshire’s board is no sinecure meant to enrich powerful friends with extravagant perks and lucrative fees, but rather a mission undertaken by like-minded industrial exemplars who care deeply about the company’s future. They are stewards in every sense of the word.
What does Berkshire look for in a director? “Individuals who have very high integrity, business savvy, an owner-oriented attitude, a deep genuine interest in Berkshire, and have had a significant investment in Berkshire shares relative to their resources for at least three years.” These are the attributes that Buffett believes to be essential for an effective director.
And, in filling out the boardroom, meritocracy is the name of the game. “In identifying director nominees,” reads the proxy, “the Governance Committee does not seek diversity, however defined.” Instead, the qualities listed above are what separates the wheat from the chaff — and are always the same for everyone.
Nobody serves on Berkshire’s board to get rich. Employees of the company — like Buffett and vice chairmen Greg Abel and Ajit Jain — receive no fees. The others get just $900 for each in-person meeting and $300 for telephone meetings. Members of the audit committee are the real high-rollers — with an additional $1,000 per quarter.
And that’s it.
As a result, no Berkshire director earned more than $6,700 in fees last year.
Buffett demands that his board have sufficient “skin in the game” in order to align their own financial interests with those of shareholders. That starts at the very top, where Buffett himself holds 14.4% of the economic interest and 30.4% of the voting power at Berkshire.
It’s up to the directors to build the required “significant investment in Berkshire shares” themselves. They are treated just like any other shareholder — free to purchase shares on the open market with their own money and at their own discretion as to value.
Here is how the current members of the board stack up in terms of shares owned:
And, now, ranked by the current financial value of their Berkshire holdings:
Warren Buffett: $159.2 billion
Susan Buffett: $2.5 billion
Howard Buffett: $286.6 million
Ajit Jain: $192.2 million
Greg Abel: $177.1 million
Wally Weitz: $134.2 million
Ronald Olson: $106.4 million
Tom Murphy Jr.: $75.1 million
Charlotte Guyman: $44.2 million
Christopher Davis: $29.1 million
Stephen Burke: $21.6 million
Meryl Witmer: $9.5 million
Kenneth Chenault: $3.3 million
Susan Decker: $1.6 million
(Note: A significant portion of Howard and Susan Buffett’s holdings are in their respective charitable foundations. Ajit Jain and Wally Weitz, too.)
Executive Compensation
Understatement alert: “Berkshire’s program regarding compensation of its executive officers is different from most public company programs.”
Warren Buffett has kept his salary at $100,000 for more than forty years — and does not intend for that to ever change. In 2024, he also received $305,111 worth of personal and home security — a pittance compared to other big names — which brought his total pay package to $405,111.
Buffett’s modest salary sometimes gives people the wrong idea — that his own frugality and sense of enough carries over to how he pays those working under him. Not true. Buffett has always been happy to shell out big bucks to big performers.
As such, vice chairmen Greg Abel and Ajit Jain each earned $21 million in 2024.
It is true, though, that Berkshire eschews the perk-driven culture so prevalent on Wall Street. “Berkshire never intends to use Berkshire stock in compensating employees,” says the proxy in no uncertain terms. That’s because Buffett alone is responsible for the company as a whole and tying compensation to its overall profitability or stock price would not be a fair reflection of anyone’s performance but his.
If Abel and Jain want to purchase stock — and, as directors, Buffett strongly encourages it — they will need to use their own paychecks to do so. That sidesteps the thorny issue of dilution, while also demonstrating a personal financial commitment.
Shares are not handed out at Berkshire. Not to employees, not to directors, not to Warren Buffett himself. (No company cars or exclusive club memberships, either.)
Shareholder Proposals
Seven shareholder proposals will come up for vote at the annual meeting on May 3 — and Berkshire hopes that each one will go down in flames.
It’s the usual motley crew of ESG and DEI stuff — on both sides of the issue — as well as an artificial intelligence initiative thrown in for good measure.
I’ll leave it up to you to reach your own conclusions on these shareholder proposals and their respective merits (or lack thereof), but Berkshire’s position could not be clearer: Vote no and leave us alone.
The far-reaching and bureaucratic nature of these proposals would run directly counter to the conglomerate’s carefully-constructed (and cherished) decentralized structure. These matters are best left to the individual subsidiaries to handle however they see fit without undue interference from above.
I always end these proxy articles the same way — and I see no reason to break with tradition now. To me, the answer to anyone agitating for change through these shareholder proposals is a simple one. Why mess with a good thing?
Of all of the recent news regarding Berkshire that pertain to the culture, I’m most concerned with the age limit for directors. I’m trying to keep an open mind until I hear Warren’s comments at the annual meeting since he’s certain to be asked about this.