By Andrew Bary
When it comes to corporate governance, Berkshire Hathaway is a throwback to the 1960s and unique among major U.S. companies.
That was evident in Berkshire's 2026 proxy statement released late Friday. It showed that virtually nothing in the how the company is run would change under CEO Greg Abel, who succeeded Warren Buffett at the start of 2026.
The proxy reflects Buffett's governance philosophy. He has controlled the company since 1965.
Berkshire doesn't issue any stock compensation to executives -- or any employee for that matter -- and goes as far as stating it "never intends" to do so. Everyone gets paid in cash. Buffett's salary was $100,000 in 2025 -- the same pay he has had for decades -- while Abel and insurance chief Ajit Jain were each compensated $22 million in cash.
That means no financial games common in the software industry where stock comp -- an expense under GAAP accounting -- is added back to earnings in a dubious "adjusted" earnings calculation. Buffett has been a critic of this financial technique.
Berkshire's directors compensation is straight out of the 1960s, with board members getting paid $900 for an in-person meeting and $300 for a phone meeting. Most directors got paid $3,000 last year (there were four meetings) or $7,000 (audit committee members get an extra $1,000 per quarter). The average board compensation for companies in the S&P 500 index is more than $250,000 a year per director.
Serving on the Berkshire board probably carries more prestige than that of any other major company.
Board members like investment manager Chris Davis have said it amounts to a public trust and honor given the huge number of Berkshire shareholders -- approaching three million -- and the desire of the board to preserve the company's distinctive culture.
Unlike virtually all big companies, Berkshire doesn't provide directors and officers insurance, meaning directors take financial risk being on the board -- although many think the company would stand behind them if there were shareholder lawsuits.
Berkshire employs no complex and incomprehensible compensation formulas for executives like most big companies that use things like "time-based awards" or "performance-based awards."
In 2025, Buffett was in charge of compensating top executives, and the proxy states that he decided in a "subjective" manner based on his view of their performance and other factors.
Berkshire doesn't use compensation consultants. Buffett hates them and so did longtime Berkshire vice chairman Charlie Munger. Both said they hurt shareholders by driving up executive pay. Munger, who died in 2023, once said he'd rather throw an "asp down my shirtfront" than hire a comp consultant.
Berkshire looked out of touch earlier in this decade with its refusal to consider "diversity" when hiring board members but that looks prescient now given the backlash against DEI (diversity, equity and inclusion) policies throughout Corporate America. The company said it doesn't consider "diversity, however defined."
Here is what Berkshire looks for in a board member: "individuals who have very high integrity, business savvy, an owner-oriented attitude, a deep genuine interest in the Company and have had a significant investment in Berkshire shares relative to their resources for at least three years."
It appears that board members adhere to the final requirement of "significant" stock ownership.
Longtime board member Susan Decker -- she has served since 2007 -- has the smallest stock ownership among the 13 directors at about $1.5 million.
Board member Howard Buffett, one of Warren Buffett's two sons, owns about $8 million in stock. Howard Buffett, 71, is expected to be named chairman after the death of his father, who's now 95. Howard's sister Susan Buffett, 72, another board member, owns about $17 million of stock.
Berkshire's board has been criticized by outside board evaluators because of a perceived lack of independence. Warren Buffett dominates it. The board also is old, with every member aged 60 or older. That's viewed as a negative by the consultants, as is the long tenure of many board members -- another negative due the idea that leads to "entrenchment."
Most Berkshire shareholders probably are very happy with the board and the way the company operates.
Warren Buffett's Berkshire stake, which consists of about 196,000 Class A shares and a small amount of B stock, is worth about $146 billion with the Class A stock trading Monday around $745,000. That amounts to a 13.7% economic stake and 30.2% voting interest since the A shares are supervoting relative to the B stock.
The Berkshire proxy is readable and runs less than 20 pages and compares with the 100-plus page tomes that most big companies issue.
Write to Andrew Bary at andrew.bary@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 16, 2026 12:16 ET (16:16 GMT)
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