Warren Buffett, fabled investor that he is, has had a lot of success as CEO of Berkshire Hathaway. The Oracle of Omaha took control of the mega-conglomerate back in the 1960’s, and the same shares he purchased for $7.50 ($60 if you factor in inflation) are now worth close to $250,000. Berkshire is a little different than most businesses, though, as it’s considered a holding company and therefore doesn’t offer up its own goods and services.
Because of that, Buffett does some things different with Berkshire than most other businesses— not splitting shares, not paying dividends, and not meeting with shareholders to name a few. As per usual with Buffett, at least he does offer up an explanation for this.
The first reason he offers up is Berkshire is too egalitarian. If he were to meet with some sub-groups of investors, he would want to meet them all, which realistically he doesn’t have time for. Plus, he thinks this could in some cases give shareholders an advantage, again going against Berkshire being egalitarian.
The second reason Buffett offers— which makes more sense to me— is the Berkshire annual meeting and annual shareholder letter. “I really think that if we spend six hours here and spend time writing the annual report, we can convey the information we need to,” Buffett explained at his 2004 meeting. He explains that when writing his letter or answering questions at the shareholder meeting in Omaha, he makes sure he is telling you what he himself would want to know if the situation had been reversed.
Munger also offered some reasoning, and explained it would be more beneficial for shareholders to hear from CEO’s (since they are actually out there trying to generate revenue) but Berkshire tends to promise that they can spend 100% of their time focusing on their businesses.
With a holding company like Berkshire, who invests with the intention of keeping stocks and holdings forever, there isn’t much need to try and appeal to shareholders. Those who are interested in a lifetime investment will look to Berkshire, and those who aren’t, Buffett has no interest in either.