I agree! Where did I read that the remaining, estate shares would be distributed over 10 years after settlement of the estate. A 50:1 split would also make good sense. I’m sure there are numerous investors who would buy A shares to help preserve Berkshire’s culture.
I just checked the Gates’ website and couldn’t find any statement about sunsetting. With Warren stepping down, but still holding substantial pledged asset, and Melinda’s role under discussion, the foundation might be reworking the language of the Foundation’s intent. Both Warren and Bill are very much following Julius Rosenwald who was against giving in perpetuity: the Rosenwald Fund was dissolved 10 or so years after Julius’ death.
He discusses the procedure in some detail in the 2019 letter (starting bottom of page 11). His current plan is to convert the As to Bs prior to giving shares to the foundations, but I hope he reconsiders at least for the shares going to the Buffett Foundation.
"Today, my will specifically directs its executors – as well as the trustees who will succeed them in administering my estate after the will is closed – not to sell any Berkshire shares. My will also absolves both the executors and the trustees from liability for maintaining what obviously will be an extreme concentration of assets.
The will goes on to instruct the executors – and, in time, the trustees – to each year convert a portion of my A shares into B shares and then distribute the Bs to various foundations. Those foundations will be required to deploy their grants promptly. In all, I estimate that it will take 12 to 15 years for the entirety of the Berkshire shares I hold at my death to move into the market."
I don’t know what the intended lifespan of the Susan T. Buffett Foundation is. The Gate says on webpage that it would dissolve within 10 years after the death of the last founding trustee. Now, I read that before the divorce and Warren’s stepping down. I doubt that Warren has any desire to turn the STB foundation into an endowed monument to his first wife.
From what I have read, he does not want a permanent foundation to be funded with his shares and intends the money to be spent within a decade. This would limit the amount of time that voting power would be exercised by the Foundation but I think it could still help to some degree. If the Foundation receives A shares, they would probably be instructed to convert to B shares prior to selling to fund operations.
The nature of the A shares, with the high price, means that in a few decades only institutions are going to own the dwindling number that remains. Individual shareholders who own A shares will end up converting to Bs to sell slowly/tax efficiently over time. One potential idea is for Berkshire to split the A shares 50:1 (the same ratio as the B split in 2010). This would bring the A share price down to under $10,000 and encourage individual investors with an interest in preserving Berkshire's culture to buy A rather than B shares. It would also be under the gift tax exemption allowing shareholders to gift A shares without tax consequences.
I agree! Where did I read that the remaining, estate shares would be distributed over 10 years after settlement of the estate. A 50:1 split would also make good sense. I’m sure there are numerous investors who would buy A shares to help preserve Berkshire’s culture.
I just checked the Gates’ website and couldn’t find any statement about sunsetting. With Warren stepping down, but still holding substantial pledged asset, and Melinda’s role under discussion, the foundation might be reworking the language of the Foundation’s intent. Both Warren and Bill are very much following Julius Rosenwald who was against giving in perpetuity: the Rosenwald Fund was dissolved 10 or so years after Julius’ death.
He discusses the procedure in some detail in the 2019 letter (starting bottom of page 11). His current plan is to convert the As to Bs prior to giving shares to the foundations, but I hope he reconsiders at least for the shares going to the Buffett Foundation.
https://www.berkshirehathaway.com/letters/2019ltr.pdf
Excerpt:
"Today, my will specifically directs its executors – as well as the trustees who will succeed them in administering my estate after the will is closed – not to sell any Berkshire shares. My will also absolves both the executors and the trustees from liability for maintaining what obviously will be an extreme concentration of assets.
The will goes on to instruct the executors – and, in time, the trustees – to each year convert a portion of my A shares into B shares and then distribute the Bs to various foundations. Those foundations will be required to deploy their grants promptly. In all, I estimate that it will take 12 to 15 years for the entirety of the Berkshire shares I hold at my death to move into the market."
I don’t know what the intended lifespan of the Susan T. Buffett Foundation is. The Gate says on webpage that it would dissolve within 10 years after the death of the last founding trustee. Now, I read that before the divorce and Warren’s stepping down. I doubt that Warren has any desire to turn the STB foundation into an endowed monument to his first wife.
From what I have read, he does not want a permanent foundation to be funded with his shares and intends the money to be spent within a decade. This would limit the amount of time that voting power would be exercised by the Foundation but I think it could still help to some degree. If the Foundation receives A shares, they would probably be instructed to convert to B shares prior to selling to fund operations.
The nature of the A shares, with the high price, means that in a few decades only institutions are going to own the dwindling number that remains. Individual shareholders who own A shares will end up converting to Bs to sell slowly/tax efficiently over time. One potential idea is for Berkshire to split the A shares 50:1 (the same ratio as the B split in 2010). This would bring the A share price down to under $10,000 and encourage individual investors with an interest in preserving Berkshire's culture to buy A rather than B shares. It would also be under the gift tax exemption allowing shareholders to gift A shares without tax consequences.
You don't want Larry Fink voting the shares.
Berkshire would become just like any other mega-cap with people like Fink calling the shots.