Berkshire Hathaway 2012 Annual Report Download - page 104

On my death, Berkshire’s ownership picture will change but not in a disruptive way: None of my stock will have to be sold to take
care of the cash bequests I have made or for taxes. Other assets of mine will take care of these requirements. All Berkshire shares will be
left to foundations that will likely receive the stock in roughly equal installments over a dozen or so years.
At my death, the Buffett family will not be involved in managing the business but, as very substantial shareholders, will help in
picking and overseeing the managers who do. Just who those managers will be, of course, depends on the date of my death. But I can
anticipate what the management structure will be: Essentially my job will be split into two parts. One executive will become CEO and
responsible for operations. The responsibility for investments will be given to one or more executives. If the acquisition of new
businesses is in prospect, these executives will cooperate in making the decisions needed, subject, of course, to board approval. We
will continue to have an extraordinarily shareholder-minded board, one whose interests are solidly aligned with yours.
Were we to need the management structure I have just described on an immediate basis, our directors know my
recommendations for both posts. All candidates currently work for or are available to Berkshire and are people in whom I have total
confidence. Our managerial roster has never been stronger.
I will continue to keep the directors posted on the succession issue. Since Berkshire stock will make up virtually my entire estate
and will account for a similar portion of the assets of various foundations for a considerable period after my death, you can be sure
that the directors and I have thought through the succession question carefully and that we are well prepared. You can be equally sure
that the principles we have employed to date in running Berkshire will continue to guide the managers who succeed me and that our
unusually strong and well-defined culture will remain intact. As an added assurance that this will be the case, I believe it would be
wise when I am no longer CEO to have a member of the Buffett family serve as the non-paid, non-executive Chairman of the Board.
That decision, however, will be the responsibility of the then Board of Directors.
Lest we end on a morbid note, I also want to assure you that I have never felt better. I love running Berkshire, and if enjoying
life promotes longevity, Methuselah’s record is in jeopardy.
Warren E. Buffett
Chairman
STOCK PERFORMANCE GRAPH
The following chart compares the subsequent value of $100 invested in Berkshire common stock on December 31, 2007 with a
similar investment in the Standard and Poor’s 500 Stock Index and in the Standard and Poor’s Property—Casualty Insurance Index.**
DOLLARS
2011 20122010200920082007
60
80
70
100
90
110
120
S&P 500 Property & Casualty Insurance Index*
S&P 500 Index*
Berkshire Hathaway Inc.
H
E
B
85
63
80
92 94
E
E
E
E
109
E
71
86
104
B
BB
B
86
68
H
70
H
H
81
H
95
H
100
H E
B
79
B
*Cumulative return for the Standard and Poor’s indices based on reinvestment of dividends.
** It would be difficult to develop a peer group of companies similar to Berkshire. The Corporation owns subsidiaries engaged in a
number of diverse business activities of which the most important is the property and casualty insurance business and,
accordingly, management has used the Standard and Poor’s Property—Casualty Insurance Index for comparative purposes.
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