What Is Berkshire Hathaway Inc Class B (BRK.B) and How Does It Differ from Class A Shares?

Berkshire Hathaway Inc Class B (BRK.B) offers a more accessible entry point for investors compared to its Class A counterpart, but the differences extend far beyond just price. BRK.B shares were deliberately created in 1996 to provide retail investors with an affordable stake in Warren Buffett’s conglomerate, while maintaining the structural integrity of the original Class A shares. At the time of writing (as of 2026-08-18), BRK.B shares represent 1/1,500th of the economic value of BRK.A shares and carry just 1/10,000th of the voting rights, according to Berkshire Hathaway’s official documentation. This disparity creates fundamentally different shareholder experiences that go beyond simple affordability, affecting voting influence, conversion rights, and long-term strategic positioning within the company’s governance structure.

Key Takeaway: BRK.B was created to provide a more accessible investment option for retail investors while preventing mutual fund competition. Class A shares (BRK.A) have significantly higher voting power than Class B, with BRK.B priced to cater to retail investors and BRK.A targeting institutional or high-net-worth individuals. The historical creation of BRK.B aimed to prevent mutual fund competition and maintain control over the company’s direction. Choosing between BRK.A and BRK.B depends on your investment goals, budget, and whether shareholder voting influence matters to your investment thesis.

Is it better to buy BRK-A or BRK-B?

Overview of Berkshire Hathaway

Berkshire Hathaway stands as one of the world’s largest and most respected conglomerates, with holdings spanning insurance, energy, railroads, manufacturing, and retail. Under Warren Buffett’s leadership since 1965, the company has delivered exceptional long-term returns through a value-investing philosophy and disciplined capital allocation. The company’s share structure reflects this disciplined approach: Class A shares have never undergone a stock split, maintaining their original 1964 pricing structure adjusted only by market performance, while Class B shares were introduced later to serve a different investor base.

The conglomerate’s reputation rests on transparency, long-term thinking, and shareholder alignment. Buffett and Vice Chairman Charlie Munger (until his passing in 2023) built a culture that prioritizes intrinsic value over short-term market sentiment. This philosophy extends to the share structure itself—the two-class system was not designed to extract value from retail investors, but rather to preserve the company’s governance while broadening ownership access.

Why Two Share Classes?

The creation of two share classes in 1996 was a defensive strategic move, not a capital-raising exercise. In the mid-1990s, several mutual fund companies planned to create unit trusts that would buy BRK.A shares and resell fractional interests to retail investors at marked-up prices with ongoing fees. Buffett viewed these schemes as value-extracting intermediaries that would profit from Berkshire’s reputation without adding shareholder value.

Rather than allow third parties to fragment ownership and charge fees, Berkshire introduced BRK.B shares directly. According to Investopedia’s analysis, the Class B offering was explicitly designed to provide a lower-cost entry point while maintaining the voting and economic structure that protected existing Class A shareholders. The move successfully prevented the mutual fund trusts from launching, as investors could now buy Berkshire shares directly at fair value without intermediary fees.

This decision reveals Buffett’s core belief: shareholders should own the business directly, not through expensive wrappers. The two-class structure serves operational purposes—affordability and accessibility—while preserving the governance concentration that has defined Berkshire’s decision-making for decades.

What happened if I invested $1000 into BRK 20 years ago?

The Creation of BRK.B

BRK.B shares were introduced on May 9, 1996, initially priced at approximately 1/30th the value of a Class A share. The offering prospectus made clear that Class B shares carried reduced voting rights and could not be converted back to Class A shares, though Class A shares could be converted to Class B at a 1:30 ratio (later adjusted to 1:1,500 after a 50-for-1 stock split in 2010).

The 1996 introduction was not about raising capital for acquisitions or expansion. Berkshire had ample retained earnings and borrowing capacity. Instead, the Class B offering addressed a structural market inefficiency: third-party funds were preparing to charge retail investors fees for access to a security that could be made directly available. Buffett’s solution eliminated the middleman and set a precedent for how large-cap companies could democratize ownership without diluting governance.

The 2010 stock split of BRK.B from 1:30 to 1:1,500 (a 50-for-1 split of the already-split shares) was driven by Berkshire’s acquisition of Burlington Northern Santa Fe Railway. The split made BRK.B shares more accessible for BNSF shareholders receiving stock consideration, further broadening the retail investor base. As of 2026-08-18, this structure remains in place, with BRK.B trading at a price point accessible to individual investors while BRK.A remains in the six-figure range per share.

Historical Performance of BRK.B

A hypothetical $1,000 investment in BRK.B at its May 1996 introduction would have purchased approximately 30 shares at roughly $33 per share (adjusting for the 2010 split). As of 2026-08-18, BRK.B shares trade significantly higher, reflecting three decades of compounded intrinsic value growth, though exact historical return data varies by the specific entry and exit dates chosen.

Over the 20-year period from 2006 to 2026, Berkshire’s book value per share and market price have generally tracked upward, though with notable volatility during the 2008 financial crisis and the 2020 pandemic. The company’s diversified holdings—ranging from Apple and Bank of America equity stakes to wholly-owned subsidiaries like GEICO and BNSF—have provided resilience during market downturns and consistent growth during expansions.

Comparing BRK.A and BRK.B performance over the same period shows identical percentage returns, as the economic value ratio is fixed. A 10% gain in BRK.A translates to a 10% gain in BRK.B. The only performance difference comes from trading costs and liquidity: BRK.B’s lower per-share price and higher trading volume often result in tighter bid-ask spreads, benefiting retail investors who trade in smaller position sizes.

It is worth noting that Berkshire Hathaway has never paid a cash dividend, reinvesting all earnings into acquisitions, buybacks, or retained capital for future opportunities. This policy has remained consistent across both share classes, meaning total return comes entirely from price appreciation rather than income distributions.

What are the voting rights differences between BRK.A and BRK.B?

Price Comparison

The price disparity between BRK.A and BRK.B is the most visible difference. As of 2026-08-18, BRK.A shares trade in the mid-to-high six-figure range per share, while BRK.B shares trade in the mid-three-figure range per share. This 1:1,500 economic value ratio means that owning 1,500 shares of BRK.B provides the same economic exposure as owning one share of BRK.A.

For retail investors with limited capital, BRK.B is the only practical option. Purchasing even a single BRK.A share requires significant capital commitment, while BRK.B allows for smaller position sizes and easier portfolio rebalancing. Institutional investors and high-net-worth individuals may prefer BRK.A for its voting rights and the ability to convert to BRK.B if liquidity or estate planning needs arise.

Voting Rights

Voting rights represent the most significant structural difference between the two share classes. Each BRK.A share carries one vote per share on shareholder matters, while each BRK.B share carries 1/10,000th of one vote. This means 10,000 BRK.B shares provide the same voting power as one BRK.A share, even though 10,000 BRK.B shares represent approximately 6.67 times the economic value of one BRK.A share (10,000 / 1,500 = 6.67).

This voting disparity is intentional. It preserves concentrated voting control among long-term Class A shareholders, including Warren Buffett, who holds the majority of his Berkshire stake in Class A shares. The structure prevents activist investors from accumulating voting influence through large BRK.B purchases without committing equivalent capital on a per-vote basis.

For most retail investors, this voting disparity is irrelevant. Berkshire’s annual meetings rarely feature contested votes, and management’s track record has earned shareholder trust. However, for investors who value shareholder activism, proxy influence, or governance participation, the voting dilution in BRK.B is a meaningful limitation.

Shareholder Influence

The voting rights structure creates a clear hierarchy of shareholder influence. Class A shareholders effectively control all major decisions, including board elections, executive compensation, and extraordinary corporate actions. Class B shareholders have nominal voting rights but lack the practical ability to influence outcomes unless they coordinate with Class A holders.

This governance structure aligns with Buffett’s philosophy that long-term, high-conviction investors should have disproportionate influence. By requiring significant capital commitment per vote in BRK.A, the structure discourages short-term traders and activist funds from disrupting the company’s long-term strategy. Class B shareholders benefit economically from this stability, even if they lack direct governance power.

The following table summarizes the key differences:

Why is BRK-B not performing well?

Pros and Cons of BRK.A

BRK.A shares offer maximum voting influence and the flexibility to convert to BRK.B if liquidity or estate planning needs arise. For investors who value governance participation or who plan to hold Berkshire as a core, multi-generational position, Class A shares provide structural advantages. The ability to convert to 1,500 BRK.B shares offers optionality for portfolio rebalancing, tax-loss harvesting, or charitable giving strategies.

However, BRK.A shares require significant capital commitment, limiting accessibility for most retail investors. The high per-share price also creates challenges for dollar-cost averaging, automatic investment plans, and fractional share platforms. Additionally, lower trading volume can result in wider bid-ask spreads, increasing transaction costs for investors who need to enter or exit positions quickly.

Pros and Cons of BRK.B

BRK.B shares provide affordable access to Berkshire’s diversified portfolio and long-term value creation. The lower per-share price allows for flexible position sizing, easier portfolio rebalancing, and compatibility with fractional share platforms. Higher trading volume typically results in tighter bid-ask spreads, reducing transaction costs for retail investors.

The primary drawback is the lack of voting influence. BRK.B shareholders are economic participants but not governance participants. For investors who prioritize shareholder activism or who want to influence board composition and executive decisions, this limitation is significant. Additionally, BRK.B shares cannot be converted back to BRK.A, eliminating the optionality that Class A holders enjoy.

Factors Affecting Performance

When investors ask why BRK.B is “not performing well,” they often conflate absolute price movement with relative underperformance. As of 2026-08-18, BRK.B’s performance must be evaluated in context: Berkshire’s portfolio is heavily weighted toward financials, energy, and industrials, sectors that may underperform during periods when technology and growth stocks dominate market returns.

Berkshire’s performance is also affected by its size. With a market capitalization exceeding $800 billion (as of 2026-08-18), the company faces challenges deploying capital at high rates of return. Large acquisitions are rare, and the company’s cash position often exceeds $150 billion, leading some investors to question whether Berkshire can continue compounding at historical rates.

However, “underperformance” is often a matter of time horizon and comparison benchmark. Over rolling 10-year and 20-year periods, Berkshire has consistently outperformed the S&P 500 on a total return basis, though with lower volatility. Short-term underperformance during bull markets driven by speculative growth stocks does not invalidate the long-term value proposition.

Is it better to buy Class A or B?

Investor Profiles

Class A shares suit institutional investors, family offices, and high-net-worth individuals who prioritize voting rights, governance influence, and conversion optionality. These investors typically hold Berkshire as a core, long-term position and value the ability to participate in shareholder decisions. The high per-share price is not a barrier, and the lower trading volume is acceptable given the long holding period.

Class B shares suit retail investors, retirement accounts, and dollar-cost averaging strategies. These investors prioritize affordability, liquidity, and ease of portfolio management over voting influence. For most individual investors, the economic exposure to Berkshire’s intrinsic value is the primary consideration, and the voting dilution in BRK.B is an acceptable trade-off for accessibility.

Final Thoughts

The choice between BRK.A and BRK.B is not about which share class is “better” in absolute terms, but rather which aligns with your investment goals, capital availability, and governance preferences. Both share classes provide identical economic exposure to Berkshire’s diversified portfolio and long-term value creation. The differences lie in voting rights, price accessibility, and conversion optionality.

For retail investors building diversified portfolios, BRK.B is the practical choice. For institutional investors and high-net-worth individuals who value governance participation and conversion flexibility, BRK.A offers structural advantages that justify the higher capital commitment. In either case, the decision to invest in Berkshire should be based on conviction in the company’s intrinsic value, management quality, and long-term business model, not on the share class structure alone.

Key Takeaways

The debate between BRK.A and BRK.B ultimately reflects broader questions about shareholder democracy, governance concentration, and the trade-offs between accessibility and influence. Berkshire’s two-class structure is not unique—many companies use dual-class shares to preserve founder control or long-term strategic vision—but it is unusually transparent and shareholder-friendly in its design.

Investors should focus on the following practical implications:

• BRK.B provides affordable access to Berkshire’s portfolio without meaningful governance participation.
• BRK.A offers voting influence and conversion optionality at the cost of high capital commitment.
• Both share classes deliver identical economic returns over time, with performance driven by Berkshire’s intrinsic value growth.
• The voting disparity protects long-term strategic decision-making but limits retail shareholder influence.
• Liquidity and transaction costs favor BRK.B for smaller, more frequent trades.

FAQ

What is the minimum investment for BRK.A and BRK.B?

As of 2026-08-18, BRK.A shares trade in the mid-to-high six-figure range per share, requiring significant capital for even a single share. BRK.B shares trade in the mid-three-figure range, making them accessible to retail investors with smaller account sizes. The 1:1,500 economic value ratio means that $1,000 invested in BRK.B provides the same economic exposure as $1,000 invested in BRK.A, though with far less voting influence.

Do BRK.B shareholders receive dividends?

No. Berkshire Hathaway has never paid a cash dividend on either Class A or Class B shares. Warren Buffett’s capital allocation philosophy prioritizes reinvesting earnings into acquisitions, share buybacks, and retained capital for future opportunities. This policy applies equally to both share classes, meaning total return comes entirely from price appreciation rather than income distributions.

Can I convert BRK.B shares to BRK.A?

No. BRK.B shares cannot be converted to BRK.A under any circumstances. However, BRK.A shares can be converted to BRK.B at a ratio of 1:1,500. This one-way conversion structure preserves voting control among Class A shareholders while providing liquidity optionality for those who need to rebalance portfolios or manage estate planning considerations.

How does Warren Buffett view BRK.B shares?

Buffett has consistently described BRK.B shares as a mechanism to provide retail investors with direct, low-cost access to Berkshire’s intrinsic value without intermediary fees. In his 1996 shareholder letter, he explained that the Class B offering was designed to prevent mutual fund trusts from extracting value through unnecessary fees. He views BRK.B as a shareholder-friendly solution that broadens ownership while preserving governance structure.

Are there tax implications for owning BRK.A versus BRK.B?

From a U.S. federal income tax perspective, BRK.A and BRK.B shares are treated identically. Both are subject to capital gains tax upon sale, with long-term rates applying to shares held for more than one year. Neither share class pays dividends, so there are no dividend tax considerations. The one-way conversion from BRK.A to BRK.B is typically treated as a non-taxable exchange, though investors should consult a tax professional for specific guidance based on their jurisdiction and circumstances.

Cryptocurrency prices are highly volatile. This article is for educational purposes only and does not constitute financial, investment, legal, or tax advice. Always do your own research and consider your financial situation and risk tolerance before making any decision. The information in this article reflects sources available at the time of writing (as of 2026-08-18) and may change rapidly. Past performance of any asset, including Berkshire Hathaway shares, does not guarantee future outcomes. Investors may experience significant losses. The evaluation of Berkshire Hathaway’s share structure is based on publicly available information and official company disclosures. Share class features, voting rights, and conversion terms are subject to corporate governance rules and may vary by jurisdiction. Always review official company filings and consult a qualified financial advisor before making investment decisions.