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Berkshire Hathaway Code of Business Conduct and Ethics [pdf]
- yosefk 9y agoAnything about unsound investments which are nevertheless likely to be bailed out and so have a great expected ROI? Tax evasion by taking companies off the stock market and canceling dividends? That Berkshire's code of ethics is linked here is an amazing PR achievement, rivaling such jewels as the one-time potent "Don't be evil" (actually beating this one hands down as it has worn out even though Google didn't get $billions of bailout money.)
- tc313 9y agoHow does acquiring a public company evade taxes?
- lefstathiou 9y agoHa, I believe I know what the parent meant. Technically by not distributing a dividend that would otherwise been paid the government does not collect on the taxes that would have been due had the dividend been paid. I see how one could stretch this to consider it "evasion" As the government has not collected taxes by there are a zillion obvious offsets to factor in here that make this a bit of a silly point to make.
- 11thEarlOfMar 9y agoTaxes are paid by the corporation before they pay dividends. Paying dividends does not reduce a corporations tax liability.
- rileymat2 9y agoAre acquisitions pre or post tax. I Don't know. If they are pretax - You very well could evade taxes by spending excess money on acquisitions, allowing the stock price to increase based on future earnings. Then use step up capital gains when you die to avoid capital gains when transferring wealth to offspring.
- gibybo 9y agoAcquisitions are a capital asset and do not offset your tax liability. If a corporation earns $100 million and buys another company for $60 million, they still owe taxes on the full $100 million.
- lefstathiou 9y agoCorrect - apologies for not being clear... if I own a business and receive a dividend, I pay taxes. So that same income was taxed first at the corporate level and second at the personal level. THe evasion - which I consider to be a stretch here - is that by not paying a dividend it becomes trapped in retained earnings and the government doesn't receive its second piece. I'm not saying I agree with the view here but the point is technically correct. A $100 of profit for Apple in the us is taxed 40% at corporate level to become $60 and by the time it gets to me it is worth 32
- walshemj 9y agoBut it probably ought to
- aczerepinski 9y agoSilly indeed. Over the decades when Berkshire has elected to retain earnings vs distributing to shareholders, the capital has been compounded at Warren Buffett rates of return (and taxed when it hits the books as profit). If it were distributed the treasury would get a one-time dividend payment, but then the individual shareholders would be unlikely to compound that money at ~20%.
- mcrad 9y ago> That Berkshire's code of ethics is linked here is an amazing PR achievement PR achievement? How about the tendency for hacker enthusiasts to know nothing (and care less) about business ethics?
- valuearb 9y agoBerkshire wholly owned subsidiaries continue to pay dividends, and Berkshire itself has to pay taxes on those dividends. How can we make ethical declarations if we don't get our facts straight?
- mudil 9y agoBerkshire hires 3G Capital to do the dirty work of layoffs and cost cuttings, because you know, BRK is an ethical business.
- traskjd 9y agoHow is remaining inefficient the ethical outcome? You know what's worse than a few people losing their jobs? Everyone losing their jobs because a competitor is more efficient and drives you out of business.
- HarryHirsch 9y agoMylan and Shkreli are extraordinarily efficient.
- pg314 9y agoNo, they aren't. They are just exploiting an (artificial) monopoly. That has nothing to do with efficiency.
- HarryHirsch 9y agoSo what?! They are operating within the constraints of the market. Before the vulture capitalists swooped in prices were very reasonable for 30 years, the previous owners chose not to exploit their monopoly, then these two increased their efficiency.
- forgotmysn 9y agothey didn't increase efficiency at all, they just increase the amount they were able to squeeze out of the IP. thats not an efficiency vs inefficiency, its n vs n+1.
- johncip 9y agoI think you could make a case that charging the highest price for something that the market will bear corrects an inefficiency in the market. http://www.investopedia.com/terms/i/inefficientmarket.asp http://www.investopedia.com/terms/i/inefficientmarket.asp It's not that they started producing more units, it's that some folks (the ones using the drugs) were taking advantage of a market inefficiency (the insufficiently low price) which when corrected, meant greater returns for Shkreli et al. Just as when a "retail" day trader hits on a system that enables them to make a large amount of money, they're taking advantage of an inefficiency, and, in a way, helping to correct it. It's not pretty, but being ugly doesn't make it inaccurate.
- traskjd 9y agoInterestingly, at the AGM this weekend, Warren noted that they receive over 4,000 reports through their BRK hotline per year. He commented that most are not actionable, but that they have made significant investigations and changes based on what has been reported through the hotline. Edit: Added that it was 4k per year.
- fiftyacorn 9y agowould be interesting to see it broken down by company
- dharmon 9y agoI wonder how many are pissed off NetJet union members?* *NetJet (a Berkshire subsidiary) has been in a labor battle, with employees outside protesting the meeting this past weekend.
- tanderson92 9y agoWhy do you describe them as pissed off? Simply because they use their rights to battle for better working benefits? This snide characterization of unionized labor undermines all workers' efforts at fair compensation.
- duncan_bayne 9y agoAnecdata for sure, but it's been a reasonable characterisation of the Unions I've seen. The public sector and construction Unions here are notably corrupt.
- hackuser 9y ago> notably corrupt What about their employers? I think unions are painted with a very broad stereotype by people who don't know them (including most people on HN, I would guess) and held to different standards than businesses, many of whom are notably corrupt.
- elihu 9y agoThis seems like a pretty standard Code of Conduct.
- deleted 9y ago[deleted]
- CPLX 9y agoThe startup crowd has a hard time with a lot of these, especially the "Corporate Opportunities" one. So much so that I'd venture a guess that many are unaware that legally that's a pretty fundamental responsibility for a principal/officer of a corporation.
- gumby 9y agoI don't see why you think that's the case. It's pretty typical language in an offer letter in California and is even specifically called out as legit in the part of the California code that prohibits non-competes. And Waymo seems pretty pissed over a violation of this term. The theft of secrets issue was just the trigger.
- socrates1998 9y agoWhy is this relevant? Am I missing something? Isn't this just typical corporate jargon?
- Steko 9y agoOblique Kushner reference?
- hackuser 9y agoBuffet did just make headlines by criticizing the CEO of Well Fargo, of whom Berkshire Hathaway is the largest shareholder, for their poor handling of the fake account scandal. Perhaps that's why Berkshire's code of conduct is attracting interest. https://www.bloomberg.com/news/articles/2017-05-06/buffett-says-wells-fargo-totally-wrong-in-approach-to-scandal https://www.bloomberg.com/news/articles/2017-05-06/buffett-s...
- themgt 9y agoWarren Buffett is one of the world's most brilliant and skilled virtue-signaling crony, rentier capitalists. https://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-mobile-home-empire-preys-poor https://www.publicintegrity.org/2015/04/03/17024/warren-buff... https://www.thenation.com/article/shelters-clinton-built/ https://www.thenation.com/article/shelters-clinton-built/ However, when Nation reporters visited the "hurricane-proof" shelters in June, six to eight months after they’d been installed, we found them to consist of twenty imported prefab trailers beset by a host of problems, from mold to sweltering heat to shoddy construction. Most disturbing, they were manufactured by the same company, Clayton Homes, that is being sued in the United States for providing the Federal Emergency Management Agency (FEMA) with formaldehyde-laced trailers in the wake of Hurricane Katrina. Air samples collected from twelve Haiti trailers detected worrying levels of this carcinogen in one, according to laboratory results obtained as part of a joint investigation by The Nation and The Nation Institute’s Investigative Fund.
- rexpop 9y agoWhat is this notion of "rentier capitalism"? How is it "crony"? What is a good book about these phenomena?
- ReligiousFlames 9y agoIf he truly cared so much about equality, he'd spend zillions to lobby Congress to massively raise taxes on the rich, publicly-finance political campaigns, commit to real climate change policy, enact single-payer healthcare and address broken justice and mental healthcare systems with reform and compassion of investing in citizens and the public commonwealth. Sure his giving some capital to B&MGF seems like a noble deed, but it doesn't go far enough to change the world for the better in desperately vital ways given his assets, influence and capabilities. Buffett might live in a tiny house in Nebraska and try to seem a "good guy," but actions ultimately speak louder than words. That might seem harsh/entitled/demanding but a few people like him control trillions of dollars and the politics of many countries (which is also partly our fault for not opposing these conditions and demanding a fairer division of profits/labor/representation.), he's in a much better position to act instead of "standing around" as if he's stuck in an economic "bystander effect."