(BRK.A), (BRK.B)
Warren Buffett has made a significant donation by converting a substantial number of his shares in Berkshire Hathaway. In a move aimed at contributing to the greater good, Buffett has converted 9,129 A shares into 13,693,500 B shares. The purpose behind this conversion is to donate 13,693,432 shares of Berkshire Hathaway’s “B” stock to five different foundations.
Among the beneficiaries, the Bill & Melinda Gates Foundation Trust will receive 10,453,008 shares, while the Susan Thompson Buffett Foundation will receive 1,045,300 shares. The Sherwood Foundation, Howard G. Buffett Foundation, and NoVo Foundation will each receive 731,708 shares. These generous donations were finalized and delivered June 21.
This significant act of philanthropy has altered the composition of Mr. Buffett’s ownership in Berkshire Hathaway. His holdings now consist of 218,287 A shares and 344 B shares. Upon making these donations, Mr. Buffett provided insightful comments regarding the mathematics behind his lifetime commitments to these five foundations.
He highlighted that the original schedule for annual grants was established on June 26, 2006, and has since been supplemented by significant additional grants to four of the five recipients. At the time the commitments were made, Mr. Buffett owned 474,998 Berkshire A shares, which were valued at approximately $43 billion. These shares represented over 98% of his net worth. It’s worth noting that he has converted A shares into B shares on previous occasions prior to making philanthropic contributions.
Over the course of the following 17 years, Mr. Buffett has refrained from buying or selling any A or B shares, and he has no intentions of doing so in the future. The five foundations have received Berkshire B shares, with an initial value of around $50 billion, surpassing Mr. Buffett’s entire net worth in 2006. It is important to mention that he holds no debts, and his remaining A shares are currently valued at approximately $112 billion, accounting for well over 99% of his net worth.
Mr. Buffett emphasized that there is nothing extraordinary behind Berkshire Hathaway’s success. It is the result of a combination of factors such as a long runway for growth, sound and straightforward decision-making, the favorable economic conditions in the United States, and the compounding effects of investments. This wealth has enabled him to make substantial contributions to philanthropic causes, as stated in his will, where he has designated that over 99% of his estate will be directed towards philanthropic endeavors.
© 2023 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.