Berkshire Hathaway
| File:Berkshire Hathaway logo.svg Berkshire Hathaway logo | |
| Company type | Public |
|---|---|
| Industry | Conglomerate |
| Founded | 1955 |
| Founder | Merger of Hathaway Manufacturing Company and Berkshire Fine Spinning Associates |
| Headquarters | Omaha, Nebraska , United States |
Key people | Warren Buffett (Chairman and CEO), Charlie Munger (Vice Chairman, 1978–2023), Greg Abel (designated successor) |
| Products | Textiles (historical), insurance, retail, manufacturing, energy, transportation, media, consumer goods |
Number of employees | 360000 (2024) |
| Website | www |
Berkshire Hathaway Inc. () is a global American conglomerate holding company based in Omaha, Nebraska. Initially operating as a textile manufacturer, it began its evolution into a diversified conglomerate in 1965 under the leadership of chairman and CEO Warren Buffett and vice chairman Charlie Munger (1978–2023). Currently, Greg Abel oversees the majority of investments and has been designated as Buffett's successor. Warren Buffett holds 38.4% of the Class A voting shares, equating to a 15.1% economic interest.
Frequently compared to an investment fund, Berkshire Hathaway achieved a compound annual growth rate (CAGR) of 19.8% between 1965 and 2023, surpassing the S&P 500’s 10.2% during the same timeframe. Nevertheless, over the ten years ending in 2023, its CAGR was 11.8%, marginally underperforming the S&P 500’s 12.0%. Within this period, the stock price experienced negative returns in only eleven years. In August 2024, Berkshire Hathaway became the eighth publicly traded U.S. company—and the first outside the technology sector—to reach a market capitalization exceeding $1 trillion.
Placed fifth on the Fortune 500 list by revenue and ninth on the Fortune Global 500, Berkshire ranks among the ten largest constituents of the S&P 500 and stands as one of the biggest employers in the United States. Its Class A shares are notable for having the highest per-share price worldwide, hitting $700,000 in August 2024, a result of the board’s long-standing policy against stock splits.
History
Berkshire Hathaway originated as a textile manufacturing firm in 1955 following the merger of Hathaway Manufacturing Company and Berkshire Fine Spinning Associates. Post-merger, it operated fifteen plants employing over 12,000 workers with revenues of $120 million, headquartered in New Bedford. However, by the late 1950s, seven plants had been shut down amid substantial workforce reductions.
In 1962, Warren Buffett began purchasing shares of Berkshire Hathaway for his investment vehicle, Buffett Partnership Ltd., at $7.50 per share, anticipating profits from liquidating textile assets. By 1963, his fund controlled approximately 7% of the company’s stock. The following year, Buffett proposed selling his shares back at $11.50 each; when Berkshire’s manager Seabury Stanton later offered $11.375 per share—below this agreed amount—Buffett responded by acquiring additional shares to assume control and subsequently removed Stanton and his son in 1965. This acquisition left Buffett heavily involved in a declining textile operation.
Buffett has since acknowledged that acquiring Berkshire Hathaway’s textile division was his most significant investment error, resulting in an estimated loss of $200 billion in potential gains over 45 years. He suggested that investing directly in insurance companies would have generated returns several hundred times greater. The company terminated all textile operations by 1985.
Also in 1962, Buffett relocated Berkshire Hathaway’s corporate headquarters to Omaha, Nebraska, at Blackstone Plaza (previously Kiewit Plaza). As of late 2024, this office employed only twenty-seven individuals.
In 1963, Franklin Otis Booth Jr. invested $1 million into Berkshire Hathaway; later David Gottesman invested in 1968—both investors eventually became billionaires through these holdings.
Acquisitions
In March 1967, under Warren Buffett's guidance, Berkshire entered the insurance sector by acquiring National Indemnity Company of Omaha, Nebraska for $8.6 million. Established in 1940 by Jack Dabney Ringwalt, National Indemnity broadened its operations in 2012 with the $221 million purchase of GUARD, a workers' compensation insurer.
Berkshire made a notable purchase in 1972 by acquiring See's Candies for $25 million. This California-based confectionery experiences peak sales during the November and December holiday season. By 2019, the investment had generated returns exceeding $2 billion, representing an 8000% increase.
In 1976, Berkshire invested in GEICO when the company was facing financial difficulties and its stock price was depressed. By January 1996, Berkshire completed the full acquisition for $2.3 billion. Headquartered in Chevy Chase, Maryland, GEICO focuses on private passenger auto insurance sold directly to consumers across the United States.
Berkshire expanded into the media landscape by acquiring the Buffalo Evening News in 1977 and subsequently establishing BH Media Group following the purchase of the Omaha World-Herald in 2011. The company further acquired numerous newspapers from Media General in 2012 for $142 million, along with additional regional publications through 2013. In 2014, BH Media added Miami's ABC affiliate WPLG to its portfolio. Lee Enterprises began managing Berkshire’s newspaper assets in 2018 and ultimately purchased BH Media’s publications in 2020 for $140 million, supported by $576 million in financing from Berkshire.
In retail, Berkshire expanded its holdings by buying Nebraska Furniture Mart in 1983 for $60 million and later acquiring Homemakers Furniture in 2000 to grow its footprint. The acquisition of Scott Fetzer Company occurred in 1986, encompassing brands such as Ginsu knives and World Book Encyclopedia; however, Kirby Company was divested in 2021. Other retail purchases include H.H. Brown Shoe Group (1991), RC Willey Home Furnishings (1995), Star Furniture (1997), and Jordan's Furniture (1999).
Berkshire entered aviation services with the acquisition of FlightSafety International in 1997, recognized as the largest provider of professional pilot training headquartered at LaGuardia Airport. The following year, in July 1998, it purchased NetJets for $725 million; NetJets is known for pioneering fractional aircraft ownership and operates a fleet exceeding 750 planes.
Significant energy sector investments include acquiring MidAmerican Energy Holdings in 1999—later renamed Berkshire Hathaway Energy—which also owns UK-based Northern Powergrid. The division expanded further with the acquisition of PacifiCorp in 2005 for $5.1 billion in cash plus debt assumption. Residential real estate brokerage HomeServices of America is also part of this energy-related portfolio.
Within manufacturing and industrials, Berkshire acquired Precision Castparts Corp. in January 2016 for $32.1 billion but subsequently recorded a roughly $10 billion impairment on its value. Additional acquisitions consist of Justin Brands (2000), producers of boots and bricks; Benjamin Moore & Co. (2000), a leading manufacturer of architectural coatings; Shaw Industries (2001), the world’s largest carpet producer; and Johns Manville (2001), specializing in insulation materials.
The consumer goods segment grew through purchases such as Dairy Queen (1997) for $585 million, The Pampered Chef (2002), Oriental Trading Company (2012) for approximately $500 million, and Duracell from Procter & Gamble (2016) via a $4.7 billion stock transaction.
Berkshire strengthened its distribution and logistics capabilities by acquiring McLane Company from Walmart in 2003, enhancing wholesale distribution networks throughout the U.S. and Brazil.
In transportation infrastructure, Berkshire initially bought a 10.9% stake in BNSF Railway in 2007 for $3.23 billion and completed full ownership by February 2010 with a historic $26 billion deal—the largest acquisition ever made by Berkshire.
Other key acquisitions include majority ownership of Marmon Group starting in 2008 with full control achieved by 2013; Lubrizol purchased for $9 billion cash in 2011; TTI Inc., a top electronic components distributor acquired in 2007; and Business Wire press release service obtained in 2006.
In automotive retailing, Berkshire formed Berkshire Hathaway Automotive following the October 2014 acquisition of Van Tuyl Group; it now operates 81 dealerships generating annual revenues around $8 billion.
Strategic investments also encompass obtaining a controlling interest in truck stop chain Pilot Flying J beginning in 2017 with incremental purchases through 2024 totaling over $14 billion.
Most recently, Berkshire finalized its purchase of insurance firm Alleghany Corporation for $11.6 billion in October 2022, negotiating a reduced price that excluded investment banking fees—reflecting Buffett’s prudent approach to deal expenses and corporate governance considerations.
Significant equity acquisitions and disposals
Buffett initiated investments in Wells Fargo in 1989; however, by the first quarter of 2022, Berkshire Hathaway had divested its entire position.
He opted not to invest in Amazon.com back in 1994 due to uncertainties about its growth trajectory, yet Berkshire purchased $2 billion worth of Amazon shares in 2019.
Beginning in 2006, Berkshire committed $2.3 billion to Tesco, eventually increasing its ownership to over 5% by 2012. Concerns about management led Buffett to sell roughly 30% of this stake in 2013, with a complete exit by 2014, resulting in an after-tax loss of $444 million.
During the 2008 financial crisis, Berkshire expanded its holdings in ConocoPhillips but later acknowledged this as "a major mistake" owing to the oil price collapse during the Great Recession. Shares were held until 2012, and Berkshire also acquired substantial stakes in Phillips 66 through a spin-off, which were fully sold by 2020 despite positive remarks on its dividends and share buybacks.
Amid the financial turmoil of 2008, Berkshire invested $5 billion in preferred shares of Goldman Sachs, generating $500 million annually in interest and a total profit exceeding $3.8 billion from preferred stock and warrants. Buffett endorsed CEO Lloyd Blankfein’s leadership throughout this period.
In September 2008, Berkshire secured approximately a 10% ownership in BYD Auto, later reducing its holding amid escalating China–US trade tensions.
Berkshire committed $6.5 billion to Wrigley Company in 2008 to support Mars Inc.’s acquisition, subsequently selling bonds and preferred stock back to Mars by 2016.
Between early 2011 and 2018, Berkshire maintained shares in IBM but divested entirely by 2018.
In August 2011, Berkshire acquired $5 billion of preferred shares in Bank of America, earning a yield of 6%, and exercised warrants to purchase common stock, cumulatively realizing approximately $12 billion profit by 2017.
Together with 3G Capital in 2013, Berkshire acquired H. J. Heinz Company for $28 billion; Heinz merged with Kraft Foods in 2015 to create Kraft Heinz. Buffett later conceded that the purchase price was excessive.
Berkshire briefly held shares in Gannett during 2013 before selling them off.
Starting from the first quarter of 2016, Berkshire made substantial investments in Apple Inc., increasing its stake to 5.8% by the end of 2022. In the second quarter of 2024, it sold nearly half of its Apple holdings for $75.5 billion, elevating cash reserves to a record $276.9 billion. Buffett highlighted Apple’s brand loyalty and integrated ecosystem as significant competitive strengths.
In the third quarter of 2016, despite previous reservations about the sector, Berkshire initiated major investments across leading US airlines. By 2017, it was among the largest shareholders of United Airlines, Delta Air Lines, Southwest Airlines, and American Airlines. The airline CEOs’ arguments regarding industry consolidation influenced Buffett’s decision-making on this sector. However, all airline stakes were sold by April 2020 due to the COVID-19 pandemic’s adverse effects.
In June 2017, Berkshire invested $377 million in Store Capital, a real estate investment trust owning properties across the United States; Store Capital was subsequently sold to private equity firms in 2022.
Also during June 2017, Berkshire purchased a $400 million (38.4%) stake in Toronto-based mortgage lender Home Capital Group but exited these holdings by late 2018.
In 2019, Berkshire extended $10 billion financing through warrants and preferred stock facilitating Occidental Petroleum’s acquisition of Anadarko Petroleum and began purchasing common shares from 2022 onward, increasing its ownership close to 29% by mid-2024.
Between September 2019 and August 2020, Berkshire acquired stakes exceeding $6 billion (over 5%) each in five prominent Japanese trading companies (Itochu, Mitsubishi, Mitsui, Sumitomo, and Marubeni) via National Indemnity; these stakes grew to approximately 7.4% by April 2023 with continued upward adjustments thereafter.
In the second quarter of 2020, Berkshire bought over 20 million shares of Barrick Gold but fully divested by the following year; it also acquired natural gas transmission and storage assets from Dominion Energy during the third quarter of that year.
During the first quarter of 2022, Berkshire took a $2.6 billion position in Paramount Global, but completely sold these shares at a considerable loss by May 2024.
Additionally in early 2022, Berkshire purchased over $4.2 billion worth of shares in HP Inc. but divested throughout 2023–24.
In the third quarter of 2022, Berkshire invested $4.1 billion into semiconductor manufacturer TSMC, later liquidating these holdings amid geopolitical tensions by early 2023.
Beginning in 2023, Berkshire increased investments significantly in Chubb Limited, holding a stake valued at $6.7 billion (6.4%) by mid-2024.
In the fourth quarter of 2024, Berkshire acquired roughly $1.24 billion worth (5.62 million shares) of Constellation Brands, becoming its sixth-largest shareholder.
Conversely, it exited its position in Ulta Beauty two quarters after initially acquiring shares earlier that same year.
Also during Q4 of 2024, Berkshire divested all holdings in S&P 500 ETFs as part of strategic adjustments favoring cash accumulation and direct equity investments.
Subsidiaries
| Sector | Entities |
|---|---|
| Insurance |
|
| Railroads | BNSF Railway |
| Utilities and energy | |
| Manufacturing | |
| Services and retail |
Securities
In addition to its wholly owned subsidiaries, Berkshire Hathaway oversees a considerable portfolio of minority equity stakes, financed through its insurance premium revenue. These investments, as disclosed in its Form 13F documents, span sectors such as finance, manufacturing, telecommunications, technology, energy, and diversified industries.
| Sector | Company | Ownership (%) | Market Value (as of December 31, 2024) |
|---|---|---|---|
| Finance & insurance | American Express | 21.6 | $45.4 billion |
| Bank of America | 8.9 | $30.7 billion | |
| Moody's Ratings | 13.6 | $12.6 billion | |
| Chubb Limited | 6.7 | $7.1 billion | |
| Visa Inc. | 0.4 | $2.9 billion | |
| Mastercard | 0.4 | $2.2 billion | |
| Capital One | 2.0 | $1.5 billion | |
| Aon | 1.9 | $1.6 billion | |
| Ally Financial | 9.5 | $1.1 billion | |
| Manufacturing | The Coca-Cola Company | 9.3 | $27.8 billion |
| Kraft Heinz | 26.9 | $9.7 billion | |
| BYD Auto | 4.9 | $2.6 billion | |
| Louisiana-Pacific | 8.1 | $0.5 billion | |
| HEICO | 1.3 | $0.2 billion | |
| Telecommunications | Sirius XM | 35.4 | $3.0 billion |
| Verisign | 14.0 | $3.1 billion | |
| T-Mobile US | 0.4 | $1.1 billion | |
| Charter Communications | 1.5 | $0.7 billion | |
| Technology | Apple Inc. | 2.0 | $73.6 billion |
| Amazon.com | 0.1 | $2.2 billion | |
| Energy & petroleum | Chevron Corporation | 6.6 | $18.7 billion |
| Occidental Petroleum | 28.2 | $13.6 billion | |
| Diversified holdings | Mitsubishi | 8.9 | $5.6 billion |
| Itochu | 7.5 | $4.8 billion | |
| Mitsui | 8.4 | $4.5 billion | |
| Marubeni | 8.5 | $2.1 billion | |
| Sumitomo Group | 8.4 | $2.1 billion | |
| Other sectors | Kroger | 6.9 | $3.2 billion |
| Davita | 43.6 | $5.0 billion | |
| Domino's | 6.9 | $1.1 billion | |
| Pool Corporation | 1.6 | $0.2 billion | |
| [[NVR, Inc.] ] | 0.4 | $0.1 billion |
Besides its equity stakes, Berkshire holds a large cash reserve that includes approximately $286 billion in Treasury bills and an additional reported cash balance of around $44 billion—the largest cash holding among publicly traded U.S.-based firms as of 2024—providing ample liquidity to meet insurance liabilities.[1] This prudent management of liquid assets highlights the company's focus on maintaining financial resilience and operational flexibility.[2]
Investment strategy
Insurance operations form a central pillar of Berkshire Hathaway, with retained premiums—also known as float—serving as a substantial source of capital. Warren Buffett favors investing in enduring companies that generate steady, long-term returns and steers clear of businesses he finds difficult to comprehend or those undergoing significant transformations. The company has traditionally avoided technology firms, missing early stakes in Microsoft and Amazon despite personal connections to their founders. Additionally, Berkshire generally refrains from real estate investments due to transparent pricing, absence of sustainable competitive advantages, intricate management requirements, and unfavorable tax implications.
Berkshire Hathaway has consistently resisted splitting its Class A shares, aiming to prioritize long-term shareholders over short-term traders. In 1996, the company introduced Class B shares priced at approximately one-thirtieth of Class A shares with voting rights initially set at one two-hundredth those of Class A (now adjusted to roughly 1/1,500 of the price and 1/10,000 of the voting power). While Class A shares can be converted into Class B shares, the reverse is not permitted. This creation of Class B shares was a reluctant move by Buffett intended to prevent unit investment trusts from marketing themselves as Berkshire substitutes.
In January 2010, during the acquisition of BNSF Railway, Berkshire implemented a 50-for-1 split on Class B shares. This action enhanced liquidity in the market and facilitated Berkshire Hathaway’s entry into the S&P 500 index.
Berkshire’s stock reached several notable price thresholds over time: it first closed above $1,000 on August 26, 1983; surpassed $10,000 on October 16, 1992; crossed $100,000 on October 23, 2006; exceeded $200,000 on August 14, 2014; and broke the $500,000 mark on March 16, 2022.
Executive compensation
Warren Buffett’s base salary stands at $100,000 annually with no accompanying stock options—a figure that has remained unchanged for over three decades and is among the lowest for chief executives at major U.S. corporations. He also benefits from approximately $300,000 worth of home security services provided by Berkshire Hathaway. Meanwhile, co-CEOs Greg Abel and Ajit Jain each receive annual compensation of $20 million plus potential bonuses up to $3 million at Buffett’s discretion.
Buffett’s yearly letters to shareholders serve as vital communications detailing Berkshire Hathaway’s strategic direction and financial results. The company’s annual shareholders’ meetings—colloquially dubbed "Woodstock for Capitalists"—take place at the CHI Health Center Omaha in Nebraska. These multi-hour gatherings attract more than 40,000 participants and feature Q&A sessions with Buffett alongside Abel and Jain.
Renowned for their humor, these meetings often open with a bespoke cartoon reflecting current business themes or industry trends:
- In 2004, Arnold Schwarzenegger appeared as "The Warrenator," battling a corporate giant.
- The 2006 cartoon portrayed actresses expressing admiration for Charlie Munger.
- In 2007, Buffett was depicted playing basketball against LeBron James.
- The 2008 illustration cast Munger as U.S. President advocating Dairy Queen amid climate concerns.
- A mattress named The Nervous Nellie symbolizing investor anxiety post-financial crisis featured in 2009.
- The 2016 cartoon satirized market manipulation involving Munger, Jain, and the GEICO gecko.
- The 2022 edition showed a veterinarian expanding his enterprise using American Express credit.
These imaginative displays highlight Berkshire Hathaway’s corporate culture and leadership approach while actively engaging its worldwide shareholder community.
Governance
Berkshire Hathaway's board of directors comprises Warren Buffett as chairman, with Greg Abel serving as vice chairman for non-insurance segments and Ajit Jain as vice chairman for insurance divisions. Other board members include Chris Davis, Susan Alice Buffett, Howard Graham Buffett, Ronald Olson, Kenneth Chenault, Steve Burke, Susan Decker, Meryl Witmer, Charlotte Guyman, and Esteban Rodriguez Jr.
From 1978 until his passing in November 2023, Charlie Munger held the position of vice chairman. A notable former executive, David L. Sokol, who led Berkshire Hathaway Energy, resigned in 2011 amid a conflict-of-interest issue related to Lubrizol stock.
In alignment with its strategy to bolster investment leadership and ensure smooth succession, Berkshire onboarded hedge fund manager Todd Combs in 2010 at age 39 as an investment manager. He was later joined by Ted Weschler, founder of Peninsula Capital Advisors, who became the second investment manager in 2012.
In January 2018, the company designated Ajit Jain and Greg Abel as vice chairmen responsible for insurance and non-insurance operations respectively. Subsequently, in May 2021, Warren Buffett announced that Greg Abel would succeed him as CEO. Buffett plans to retire by the end of 2025, with Abel poised to take over, signaling a pivotal leadership change aimed at sustaining Berkshire’s growth and market presence.
Financials
| Year | Revenue (million US$) |
Net Income (million US$) |
Total Assets (million US$) |
Number of Employees |
|---|---|---|---|---|
| 2005 | 81,663 | 8,528 | 198,325 | 192,000 |
| 2006 | 98,539 | 11,015 | 248,437 | 217,000 |
| 2007 | 118,245 | 13,213 | 273,160 | 233,000 |
| 2008 | 107,786 | 4,994 | 267,399 | 246,000 |
| 2009 | 112,493 | 8,055 | 297,119 | 222,000 |
| 2010 | 136,185 | 12,967 | 372,229 | 260,000 |
| 2011 | 143,688 | 10,254 | 392,647 | 271,000 |
| 2012 | 162,463 | 14,824 | 427,452 | 288,500 |
| 2013 | 182,150 | 19,476 | 484,931 | 302,000 |
| 2014 | 194,699 | 19,872 | 525,867 | 316,000 |
| 2015 | 210,943 | 24,083 | 552,257 | 361,270 |
| 2016 | 223,604 | 24,074 | 620,854 | 367,671 |
| 2017 | 242,137 | 44,940 | 702,095 | 377,000 |
| 2018 | 247,837 | 4,021 | 707,794 | 389,000 |
| 2019 | 254,616 | 81,417 | 817,729 | 391,500 |
| 2020 | 245,510 | 42,521 | 873,729 | 360,000 |
| 2021 | 276,094 | 89,795 | 958,784 | 372,000 |
| 2022 | 302,089 | |||
| 948,452 | 383,000 | |||
| 2023 | 364,482 | 96,223 | 1,069,978 | 396,500 |
| 2024 | 371,433 | 88,995 | 1,153,881 | 392,400 |
Awards and recognition
Between 2007 and various years up to 2016,Barron's consistently ranked Berkshire Hathaway among the globe’s most esteemed corporations according to surveys conducted with American money managers. The company frequently appeared alongside prominent industry giants like Apple Inc. and Johnson & Johnson.
Controversies involving subsidiaries
In July 2022,Berkshire Hathaway’s subsidiary Trident Mortgage Company agreed to pay $20 million to U.S. regulators following accusations of discriminatory lending targeting predominantly Black and Latino neighborhoods in Philadelphia.
In January 2025,the Consumer Financial Protection Bureau initiated legal action against Vanderbilt Mortgage and Finance for employing aggressive lending practices that allegedly caused financial distress and defaults among borrowers.
A Reuters investigation in 2025 revealed that Berkshire Hathaway Energy operates some of the United States’ most polluting coal-fired power plants despite its investments in renewable energy sources. The company has faced criticism for maintaining these coal operations until at least 2049 due to concerns over environmental impact and public health risks.
See also
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