Four family foundations will receive shares worth more than $1 billion
2 min
At age 94, Warren Buffett is reflecting on life, wealth and mortality.
The legendary investor’s company, Berkshire Hathaway , said Monday that Buffett will again give a portion of his Berkshire shares, in this case worth about $1.15 billion, to four family foundations. The donations leave him holding 206,363 Class A shares worth about $148 billion.
As he did last November, Buffett is converting 1,600 Class A shares into 2.4 million Class B shares, which hold less voting rights, before donating them to the Susan Thompson Buffett Foundation, named for his late first wife, and to foundations led by his children.
The Thanksgiving-time donations supplement annual gifts to the four foundations, as well as to the Bill & Melinda Gates Foundation, that Buffett has made since 2006, when he unveiled plans to make major gifts throughout his lifetime.
In a message accompanying Monday’s news of the donations, Buffett discussed his plans for his three children, Susie, Howard and Peter Buffett , to distribute the Berkshire shares he owns at his death. Buffett told The Wall Street Journal in June that the Gates Foundation had no money coming after he dies.
The three Buffett children, now in their 60s and 70s, will need to decide unanimously what philanthropic purposes their father’s money serves. Buffett said in his new comments to shareholders that the requirement will give his children some degree of protection from an expected bombardment of requests.
“Those who can distribute huge sums are forever regarded as ‘targets of opportunity,’ ” Buffett wrote. “This unpleasant reality comes with the territory. Hence, the ‘unanimous decision’ provision. That restriction enables an immediate and final reply to grant-seekers: ‘It’s not something that would ever receive my brother’s consent.’ And that answer will improve the lives of my children.”
Buffett wrote that while potential successor trustees have been chosen, he hopes that Susie, Howard and Peter Buffett are themselves the ones to distribute all of his assets.
“I know the three well and trust them completely,” he wrote.
Buffett’s huge position in Berkshire means a rapid selling of his stock could jolt the share price. He wrote that his children should distribute his holdings gradually, and in a manner that “in no way betrays the exceptional trust Berkshire shareholders bestowed upon Charlie Munger and me.”
Buffett offered a suggestion for all parents, wealthy or not: “When your children are mature, have them read your will before you sign it.” He said it is better for children to be able to ask questions when a parent is still able to respond.
In discussing his fortune, Buffett, ever the teacher, highlighted the importance of compounding, especially after many years of investing.
“The real action from compounding takes place in the final twenty years of a lifetime,” he wrote. “By not stepping on any banana peels, I now remain in circulation at 94 with huge sums in savings—call these units of deferred consumption—that can be passed along to others who were given a very short straw at birth.” undefined undefined Berkshire’s Class B shares have rallied 34% this year, compared with a 26% gain by the S&P 500. Earlier this year the company joined a small club of U.S. businesses worth more than $1 trillion.
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The Murdoch family has reached a deal to end its years long battle over control of its media empire.
2 min
Lachlan Murdoch is set to take control of his father’s media assets as part of an agreement announced Monday between the patriarch and his children. Lachlan will control all the votes in a new trust that will hold sizable stakes in Fox Corp. and News Corp once the deal is completed.
The Murdoch trust, which currently holds roughly 40% voting stakes in Fox and Wall Street Journal parent News Corp, was initially designed to give each of his four oldest children an equal voting share.
As part of the settlement announced Monday, Rupert Murdoch’s children James, Elisabeth and Prudence will give up their claims to the existing trust. They will instead receive new trusts with cash funded in part by sales of some of the existing trust’s Fox and News Corp stock.
The three children will also be subject to a long-term agreement preventing them from buying shares in the companies.
Fox and News Corp shares fell slightly in after market trading.
The new agreement caps a tumultuous succession drama atop media companies whose holdings include cable giant Fox News, major newspapers in the U.S., U.K. and Australia; digital real-estate companies and HarperCollins Publishers. It also brings to a close a conflict that potentially threatened the futures of both News Corp and Fox Corp.
Murdoch, 94 years old, had sought to amend the family trust to put control in the hands of Lachlan. James, Elisabeth and Prudence opposed the change.
An acrimonious family battle has played out largely behind closed doors and in sealed court proceedings in recent years. Last December, a Nevada probate commissioner ruled against Murdoch’s efforts to amend terms of the trust and give control to Lachlan.
Murdoch sought the change, in part , because Lachlan is the one most aligned with his conservative political views as well as the best manager to run the companies.
New trusts will also be created for Lachlan, who is executive chair and chief executive officer of Fox Corp. and chair of News Corp, as well as the two children that Rupert Murdoch had with Wendi Deng. Grace and Chloe Murdoch are beneficiaries of the original trust .
A holding company owned by Lachlan, Grace and Chloe Murdoch’s new trusts will control about 36% of Fox and 33% of News Corp.
Rupert and Lachlan Murdoch had no comment beyond the announcement. A spokesman for Elisabeth Murdoch and Prudence MacLeod declined to comment. Deng and a representative for James Murdoch couldn’t be reached for comment. A spokesman for Anna dePeyster, mother of Elisabeth, James and Lachlan, declined to comment.
