Dive Brief:
- Berkshire Hathaway disclosed Thursday it will pay its incoming CFO Charles Chang an annual cash salary of $8 million in his new role which he will assume June 1, according to a securities filing. The pay is nearly double the $4.3 million salary received last year by the company’s longtime finance chief Marc Hamburg, according to the company’s March 13 proxy statement.
- The Omaha, Nebraska-based conglomerate also disclosed that it will provide Hamburg, or his spouse if he predeceases her, with “up to 30 flight hours per year on a mid-sized NetJets aircraft” starting June 1 and extending for roughly 11 years, ending no later than May 31, 2037, according to the Thursday filing with the Securities and Exchange Commission. Berkshire noted the benefit is “in recognition of Mr. Hamburg’s many decades of service.” Berkshire is the parent of Columbus, Ohio-based NetJets.
- While the jet perk is somewhat notable outside the airline industry, Chang’s higher pay suggests a more significant compensation strategy shift that could be tied to the company’s founder — legendary investor Warren Buffett — retiring from the CEO post, according to Josh Crist, co-managing partner of Crist Kolder Associates, an Illinois-based executive search firm. “This may be an effort internally to step things up,” Crist said, adding the company’s management could be thinking, “‘We’ve got to flank our new CEO with the best people we can find and that’s going to cost more.’”
Dive Insight:
Hamburg’s departure is one of the high-profile leadership changes at the firm coinciding with the recent change at the top that marks the end of an era: In January Buffett, the 95-year-old nicknamed “The Oracle of Omaha” by some for his skill in finding valuable investments, handed over the Berkshire CEO and chairman reins that he has held since 1970.
Greg Abel — the chairperson of the conglomerate’s Berkshire Hathaway Energy — took the CEO seat in a move coming several years after Buffett first named him as his successor in 2021. The company’s new finance chief hails from BHE, where he has served as SVP and CFO for about two years. Previously, Chang was a partner at PricewaterhouseCoopers.
The salaries of both Abel and Chang are higher than those of their predecessors. The famously frugal Buffett drew a salary of $100,000 last year, though his compensation totaled $389,488, of which $289,488 represented the cost of personal and home security services provided by the company.
Buffett is among the richest people in the world. But, his slim pay reflects his view that CEOs should be incentivized to deliver long-term success for their companies and that big salaries, bonuses and short-dated stock options lead to short-term thinking, Business Insider reported.
In contrast, Berkshire bumped Abel’s salary up to $25 million when he took the CEO seat, according to a Jan. 6 securities filing. Last year, as vice chairman for non-insurance operations, his salary was $22 million.
Usually the compensation for a new C-suite executive is either in line with that of their predecessor or, if higher, more in the range of a 10% to 20% bump, Crist said.
“The only real time you see a massive discrepancy is when you have a long-time internal [executive] that has been given raises year after year that may not have spoken to the market,” Crist told CFO Dive in an interview.
Hamburg, who joined the company in 1987, has been finance chief since 1992. His total compensation last year was almost entirely salary, except for $17,500 in other compensation that represented contributions to subsidiary defined contribution plans. In 2024, he earned a total of $4.1 million, including a salary of $4.06 million and $18,546 in other compensation that included $1,296 related to “personal aircraft use.”
Looking ahead, Berkshire estimated that the cost of providing the NetJets benefit to Hamburg would be about $490,000 annually, according to this week’s filing.
Berkshire Hathaway did not immediately respond to requests for comment.
