Berkshire Hathaway is structured as a holding company: a small parent entity in Omaha that owns dozens of operating businesses outright and holds large minority stakes in publicly traded corporations. The headquarters runs with roughly 25 people. The subsidiaries collectively employ nearly 400,000. That contrast, between a skeletal parent and a sprawling portfolio, defines everything else about the company.
The Parent-Subsidiary Setup
A holding company exists to own controlling interests in other companies rather than to produce goods or services itself. Berkshire’s parent does not run GEICO’s claims operation, manufacture bricks, or dispatch freight trains. It does two things: allocate capital and choose the people who run the businesses. Everything operational happens one level down.
The legal structure separates the parent from the operational liabilities of each subsidiary. If one business faces a lawsuit or financial trouble, the damage is generally contained within that entity rather than reaching across the whole conglomerate. That firewall is one of the practical reasons holding companies exist.
Cash generated by the subsidiaries flows upward to the parent, where senior leadership decides how to redeploy it. Options include acquiring new businesses, buying equity stakes in public companies, repurchasing Berkshire’s own stock, or simply holding cash and Treasury bills until a better opportunity appears. The structure is built around this centralized capital allocation function.
There is also a tax dimension. When a corporation receives dividends from another domestic corporation, it can deduct a portion of that income before calculating its tax bill: 50% for stakes below 20%, and 65% at 20% or more by vote and value.1Office of the Law Revision Counsel. 26 USC 243 – Dividends Received by Corporations Dividend income flowing into Berkshire from its equity portfolio is partially shielded from corporate tax in a way it would not be for an individual holding the same stocks directly.
Two Classes of Stock
Berkshire’s capital structure centers on two classes of common stock: Class A (BRK.A) and Class B (BRK.B). Both represent ownership in the same underlying businesses, but they differ sharply in price, voting power, and flexibility.
Class A shares carry the highest per-share price of any publicly traded stock in the world. Class B shares were created in 1996 to give smaller investors direct access to Berkshire without going through unit trusts. After a 50-for-1 split in 2010, each Class B share represents one-fifteen-hundredth (1/1,500) of the economic interest of a Class A share.2U.S. Securities and Exchange Commission. Certificate of Amendment of Restated Certificate of Incorporation of Berkshire Hathaway Inc.
The voting gap is wider. Each Class A share carries one vote. Each Class B share carries one-ten-thousandth (1/10,000) of a vote.2U.S. Securities and Exchange Commission. Certificate of Amendment of Restated Certificate of Incorporation of Berkshire Hathaway Inc. A holder of one Class A share has voting power equivalent to someone holding 15 million Class B shares. The disparity is deliberate: long-term Class A holders retain effective control over governance even as the B float grows.
Conversion runs one way only. Any Class A shareholder can convert a single share into 1,500 Class B shares at any time, which is useful for gifting or estate planning. The reverse is not permitted. Accumulating 1,500 Class B shares does not let a holder convert them back into one Class A share, which would otherwise manufacture the superior voting rights of the A class.
Who Runs the Company
Greg Abel became Chief Executive Officer on January 1, 2026. Warren Buffett announced the transition at the annual shareholder meeting in May 2025, and the board unanimously approved Abel’s appointment. Buffett remains chairman.
Abel had served as vice chairman overseeing all non-insurance operations since 2018, and before that ran Berkshire Hathaway Energy for nearly two decades. Ajit Jain serves as vice chairman for insurance operations, overseeing GEICO, the reinsurance group, and Berkshire’s primary insurance businesses. This two-pillar arrangement, with one leader for insurance and another for everything else, has been in place since 2018. Designated investment managers handle portions of the equity portfolio, but the CEO retains final authority over capital allocation, which is the function that matters most in a holding company.
How Decentralized the Operating Businesses Are
Berkshire operates with an extreme form of decentralization that is unusual among companies of its size. The Omaha headquarters handles capital allocation, executive selection, tax planning, and audit oversight. It does not impose centralized human resources, legal, marketing, or IT functions on its subsidiaries. Each business runs itself.
The CEOs of Berkshire’s wholly-owned subsidiaries make their own operational decisions on hiring, pricing, marketing, organizational structure, and internal compensation. Oversight from the parent comes mainly through monthly financial reporting. Most large conglomerates layer corporate functions on top of their operating units. Berkshire skips that layer.
The tradeoff is real. Minimal central oversight means problems at individual subsidiaries can go undetected longer than they might at a company with a more hands-on corporate structure. The check on this risk is a code of business conduct that applies to all directors, officers, and employees across every subsidiary, with an anonymous reporting hotline operated by a third-party organization.3Berkshire Hathaway. Code of Business Conduct and Ethics Subsidiary CEOs and CFOs must disclose any transaction or relationship that could create a conflict of interest to Berkshire’s Audit Committee chair.
The subsidiaries are expected to send excess cash flow up to the corporate level. They do not keep large idle cash balances. This is the one area where the parent exercises tight control, and it is the mechanism that turns the decentralized structure into a capital allocation machine.
The Operating Segments
Berkshire’s most recent 10-K breaks the conglomerate into seven reportable business segments.4U.S. Securities and Exchange Commission. Berkshire Hathaway Business Segment Data
- Insurance, covering GEICO, the Berkshire Hathaway Primary Group (commercial property and casualty), and the Berkshire Hathaway Reinsurance Group (excess-of-loss and quota-share reinsurance worldwide). This segment is the structural backbone of the enterprise.
- Burlington Northern Santa Fe (BNSF), one of North America’s largest freight rail networks.
- Berkshire Hathaway Energy (BHE), covering regulated electric and gas utilities, power generation and distribution, and real estate brokerage.
- Manufacturing, spanning dozens of industrial, consumer, and building-products businesses, including homebuilding and related financial services.
- Pilot Travel Centers, which operates travel centers across North America and wholesales fuel. Berkshire completed its full acquisition of Pilot in January 2024, and the business now reports as its own segment.
- McLane Company, a wholesale distributor of food and non-food products to retailers and restaurants.
- Service and Retailing, a catch-all segment including NetJets, FlightSafety, electronic components distribution, automobile dealerships, and furniture leasing.
Beyond these operating segments, Berkshire holds a large portfolio of non-controlling equity investments in publicly traded companies, including Apple, American Express, and Coca-Cola. These do not constitute an operating segment in accounting terms, but they are a critical piece of the overall structure.
Insurance Float as the Engine
The insurance segment is not just the largest grouping. It is the financial mechanism that makes the rest possible. “Float” is the money insurance companies hold between collecting premiums and paying claims. In reinsurance, that gap can stretch a decade or more.
As of December 31, 2024, Berkshire’s insurance float stood at approximately $171 billion.5Berkshire Hathaway. Berkshire Hathaway Inc. Earnings Release That money will eventually go to policyholders as claims, but in the meantime Berkshire invests it. If the insurance operations break even on underwriting, the float functions as an interest-free loan funding the investment portfolio. In years when underwriting is profitable, Berkshire is effectively paid to hold other people’s money.
State insurance regulators impose restrictions on how insurers can invest their float, limiting how much can go into common stocks and lower-grade obligations. The specific limits vary by state and by insurer type. Berkshire’s scale and the diversity of its insurance subsidiaries across jurisdictions give it meaningful flexibility in how the capital gets deployed.
What Berkshire Does With the Cash
Berkshire has not paid a cash dividend since the 1960s. The entire structure is built on the premise that retained earnings redeployed by the parent’s capital allocators will generate more value than dividends distributed to shareholders. Every dollar of profit stays inside the company, available for acquisitions, equity investments, or share repurchases.
On buybacks, the board adopted an amended policy in 2018 allowing repurchases whenever the chairman and CEO believe the stock trades below intrinsic value, conservatively determined. The policy also requires that repurchases not reduce Berkshire’s consolidated cash, cash equivalents, and Treasury bill holdings below $20 billion.6Berkshire Hathaway. Berkshire Hathaway Amends Share Repurchase Program The prior threshold was tied to a specific premium over book value (120% of book). The current approach relies on management judgment rather than a published formula. Repurchases are not announced in advance; shareholders learn about them through quarterly SEC filings.
Disclosure Obligations
Berkshire files an annual 10-K and quarterly 10-Q reports with the SEC, breaking out financial results by segment.
Because Berkshire exercises investment discretion over a portfolio of publicly traded securities worth far more than $100 million, it must also file Form 13F with the SEC within 45 days after the end of each calendar quarter.7U.S. Securities and Exchange Commission. Form 13F These filings disclose Berkshire’s holdings of U.S. exchange-listed equities, ETFs, and certain options and convertible securities. Analysts watch them closely to track what Berkshire is buying and selling, though the data lags by up to 45 days and sometimes longer when the SEC grants confidential treatment requests that let Berkshire delay disclosing a position it is still building.
Berkshire’s insurance subsidiaries face an additional layer of regulation at the state level. Each insurer must comply with the insurance laws and capital requirements of the states where it operates, including restrictions on investment portfolios and mandatory reserve levels. These rules ensure that the float being invested by the parent’s subsidiaries remains available to pay future claims.