Day to Day
The new structure allows Page, 42, to offload some of the day-to-day operational responsibilities of running the company, while remaining in charge of overseeing the allocation of resources to the different businesses. It’s a similar role that Buffett plays from Berkshire’s headquarters in Omaha, Nebraska.
Buffett has never been a command-and-control-type CEO. The decentralized structure has allowed him to keep the staff at the company’s headquarters to about two dozen, even as Berkshire has grown to employ more than 300,000 people across more than 80 subsidiaries like auto insurer Geico and railroad BNSF.
Capital Deployment
His main charge has been figuring out how to deploy the company’s capital. Berkshire doesn’t pay a dividend and it rarely repurchases stock, which supplies Buffett with billions of dollars annually to put back into existing businesses or to make new investments. On Monday, he announced one of his biggest deals ever, a $37.2 billion takeover of Precision Castparts Corp., a manufacturer of parts for the aerospace industry.
“Warren says, ‘Send the money to Omaha,’” said Wallman, the money manager. “They’re saying send the money here and we’ll do capital deployment in the same fashion -- in the spirit of Warren Buffett, but in the areas that they understand.”
In an October interview with the Financial Times, Page said he looks to Buffett for ideas. “One thing we’re doing is providing long-term, patient capital,” Page told the FT.
Still, there are differences. Buffett has avoided technology investments for most of his career and focused on buying businesses with durable competitive advantages. And he’s rarely built businesses from scratch.
Driverless Cars
Under the new structure, Alphabet will still get almost all its revenue and profit from Google. The company has been using the cash from the business to fund its other investments, whether it’s acquisitions such as Nest, or research efforts in driverless cars, high-speed Internet service or health-care products.