One of the highlights of the yearly business calendar is the annual meeting of Berkshire Hathaway shareholders. Every spring tens of thousands of the Berkshire faithful make the haj to Omaha, to hear the wisdom of Berkshire’s Chairman, Warren Buffett, and his long-standing side-kick and straight man, Charlie Munger. How did this assembly become such a widely attended and closely watched event, and why do so many people attend year after year? These questions are interestingly examined in a recent book of short essays edited by the wife and husband team of George Washington University Law School Professor Lawrence Cunningham and New York attorney and real estate developer Stephanie Cuba. The book, entitled “The Warren Buffett Shareholder: Stories from Inside the Berkshire Hathaway Annual Meeting” (here), provides a series of interesting glimpses of what the Berkshire shareholder meeting means to a number of different regular attendees, along the way illustrating how and why the meeting has become the phenomenon that it now is.
Even those who do not closely follow Berkshire know some of the standard features of the company’s annual meeting, including the hours-long Q&A session in which Buffett and Munger field questions from the audience on a wide range of subjects. Other perennial features for many attendees include, for example, the obligatory jewelry shopping trip at Borsheim’s or steak dinner at Gorat’s, Buffett’s newspaper throwing contest, and a host of other campy or corny features and events. The Berkshire shareholder meeting is not your typical shareholders’ meeting. In the annals of corporate America, Berkshire’s meeting is unique.
On reading this book of essays, it becomes clear that while these well-known features of the meeting are valued and even treasured by many of the essays’ authors, for many, these aspects of the meeting are not their most important reasons for attending. Rather, for many, the value of the meeting is the opportunity to encounter and to get to know other like-minded people who have also re-arranged their lives to spend a few days in Omaha.
The book’s 40 essays include contributions from a wide range of prominent and not so prominent authors, including, for example, the journalist Jason Zweig; Vanguard founder John C. Bogle; and Berkshire subsidiary CEOs Tony Nicely, of Geico, and Bruce Whitman, of Flight Safety.
While all of the essays are interesting, there are a few gems. I particularly liked the contribution from Tom Gayner, who has been credited with running Markel Corporation, the company of which he is co-CEO, as a “baby Berkshire.” Gayner recounts how early in his career he became a Buffett devotee, and how he came to organize what has become one of the many satellite events, the Markel brunch, which now regularly attracts hundreds of attendees. The book’s essays also include charming accounts from two local Omaha booksellers and how they and their businesses became a regular part of the shareholder meeting, in order to service the shareholders’ demand for books about Buffett or that Buffett or Munger mention from the stage.
The essays also include a number of anecdotes about funny or interesting things that happened over the years at the shareholder meetings. My favorite anecdote in the book is recounted in the essay by University of Nebraska Omaha business professor Robert P. Miles. As Miles recounts, an elderly women approached the microphone on the floor at the shareholder meeting and said “Mr. Buffett, I only own one B share. May I ask a question?” Miles reports that Buffett answered, “Ma’am, between you and me, we own half the company. What’s your question?”
The one thing that comes through from reading all of the essays is the fervor that each of the authors feels about the annual meeting. Many of the authors describe their feelings about the meeting using the vocabulary of religion or spirituality. Numerous authors refer to their attendance at the event as a “pilgrimage.” In the same vein, many of the authors say that attending the meeting has not only made them better investors, but better people, as it has helped them to gain insight into the right way to live. In his essay, Whitney Tilson, the CEO of Kase Learning, expressly describes the feelings of the Berkshire faithful as “like a religion” (adding, perhaps aware of how over-the-top this sounds, “I’m only sort of joking.”)
There is no doubt that Buffett’s and Berkshire’s accomplishments are remarkable, and the fact that Buffett has accomplished all he has while retaining a well-deserved reputation for integrity is extraordinary, but some of the pseudo-religiosity expressed in the essays is excessive. Let’s be honest, none of this would be happening if Buffett had not made Berkshire shareholders a lot of money. As attorney Simon Lorne admits in his essay, “if Berkshire had not been so financially successful, the other endearing qualities would quickly wear thing.”
But while the zeal of some of the authors may be excessive, their enthusiasm for the meeting seems genuine enough. Over and over, the authors mention how rewarding it has been over the years getting to know the other Berkshire shareholders. A number of the authors’ essays emphasize that the reason they come back year after year is not just the meeting itself, but the various satellite gatherings, side meetings, lunches, and post-meeting events, many of which have become annual occasions just like the shareholder meeting itself. The one thing is clear is that the meeting has created its own ecosystem in which a broad community of like-minded people enjoy each other’s company.
A number of authors note that there is a certain sameness to the meeting itself. More than one author notes that over time, you do start to hear the same questions and answers over and over again. Several authors attempt to suggest that the sameness is part of the event’s reassuring familiarity and charm. Others suggested that it may be time for some changes.
For example, investment manager and author Robert Hagstrom suggests in his essay that the time may have come to change the line-up a little bit. He suggests that Berkshire assistant investment managers Ted Weschler and Todd Combs should get some airtime, or that Ajit Jain and Greg Abel, the company’s Vice Chairman, would be popular additions to the program. For Berkshire shareholders nervous about Buffett’s and Munger’s mortality, these suggestions have merit – better to introduce the back-up squad now, before the day comes when they have to be rushed into the lineup.
One thing reading these essays did for me is that it made me reflect on my own experience in attending a Berkshire shareholders meeting. (I own BRK.B shares although not nearly as many as I wish I did.) I attended the 2003 event. I did the whole thing. I went to Borsheim’s and ogled the jewelry I couldn’t afford. I stood in line for hours in the hoping of getting a good seat. I managed to meet Buffett, as he was walking into the entrance of the Omaha Marriott. I met Ajit Jain. I also got to hang out and spend some quality time with the CEO and CFO of the parent company of my then-employer.
It was all great, I enjoyed it and I am glad I did it. But once was enough for me. I feel about the Berkshire shareholders meeting the same way I feel about Mardi Gras or Octoberfest; they are all great events and worth doing, but doing it once is enough to get the idea. Having done the shareholders meeting once, I feel no need to do it again.
The authors of the essays clearly had a different experience. By contrast to my experience, they seem to feel almost compelled to return for the meeting every year. Perhaps the difference is that I didn’t connect the same way with the community of the Berkshire people. Or maybe it is that the meeting attracts a certain kind of person, consistent with the way that Buffett has set about systematically trying to attract a certain kind of shareholder as his owner/partners.
The meeting itself is an expression of the company’s personality and culture. The most devoted of the Berkshire faithful – and all of the authors represented in this book are nothing if not devoted – see themselves in the company’s personality and culture. It is not too much to say that the company’s personality and culture has become part of who they are – perhaps just as they are part of what the company has become as well.
I highly recommend this book for anyone who wants to understand the whole Berkshire phenomenon. The essays are well-chosen and readable, and collectively they help explain why Berkshire is a unique company, in so many ways.