2003: Do Berkshire's managers benefit from the annual meeting?

AUDIENCE MEMBER: Jack Hurst (PH), Philadelphia. I have a question about the managers, and a comment and a question about the insurance operation.

These meetings are a lot more fun with more subsidiaries and more managers. I also think more educational, because you get to interact with them.

Is there any feed — do you get any feedback from the managers that they enjoy coming here and they get anything out of the meeting?

WARREN BUFFETT: Well, we have a number of our managers here and I — but we don’t require anybody to come. I mean, we have managers that, very, very seldom have come to a meeting.

And I don’t keep names, I can’t even tell you which ones they are. But you know, if they enjoy it, they come.

Many of them, of course, have operations down below, selling you things, and some of them come to help out in that respect. But we’ve got a — you know, we have a sensational group of managers.

They run their own businesses, they’re extraordinary at doing what they do and we don’t get in their way. We don’t demand that, virtually, that they do anything, except work for the owners.

But you will — I hope you meet some of them here today because they — you know, the ones that are here, obviously, enjoy interacting with the shareholders.

And it’s fun to put faces to functions. I mean, it — I enjoy it, I think a lot of them enjoy coming here.

And the people that are working downstairs, you know, they volunteer to come. And they enjoy seeing the shareholders, and they enjoy bragging about their companies, and they’ve got a lot to brag about.

And I hope you thank them when you see them because, you know, it’s a lot of effort for them.

I got here at six o’clock this morning, but there were people that were here a lot earlier than that, and they were working yesterday to get ready for this. And I want to thank them myself.

Charlie? (Applause)

CHARLIE MUNGER: I don’t think our managers who come to this meeting are picking up new tricks. Most of our managers know all the tricks that are related to their businesses.

But this is a very interesting place, and it gets more interesting every year. And part of what makes it interesting is not discreditable, and I think people like being part of it.

WARREN BUFFETT: Yeah, our managers — in a few respects, we’ll occasionally work together.

Sometimes a manager of subsidiary A will check with some of the others, not through Omaha, directly themselves. And they will say, you know, “What are you paying for software?” or “What are you paying for UPS?” or whatever it is, and “Can we make a better deal if we pool our efforts?”

There are times when we have saved money, sometimes pretty real money. But that has never been instituted by Omaha, it’s never been overseen by Omaha.

It’s because manager A decides to call manager B. And you know, they like each other and they can make their own operation better, sometimes by combining purchasing power, and occasionally by just having an idea here or there. But there’s no organized way of going at that in Berkshire and nobody has to play.