(Fortune) - Warren Buffett has laid out plans for Berkshire Hathaway and his fortune in the event of his death in a letter published on the global conglomerate’s website.
The legendary investor, dubbed “the Oracle of Omaha,” released the statement alongside news that he had donated millions of Berkshire Hathaway shares to four charitable trusts associated with his family.
Buffett, 93, converted 1,600 Class A shares into 2,400,000 Class B shares according to a regulatory filing seen by Fortune, submitted to the SEC on Nov. 21.
Of those shares, 1,500,000 were gifted to the Susan Thompson Buffett Foundation, and 300,000 shares were given to the Sherwood Foundation, the Howard G. Buffett Foundation, and NoVo Foundation, respectively.
According to calculations by news agency Reuters, this amounts to a total donation of $866 million in Berkshire Hathaway funds—supplementing a $759 million donation made at the same time last year.
Buffett has made a habit of making such moves at Thanksgiving, last year making contributions to the charities run by his three children and the Susan Thompson Buffett Foundation, named after his late wife.
In the unexpected letter to Berkshire Hathaway shareholders, the man worth $121 billion according to the Bloomberg Billionaires Index began by reassuring readers: “I feel good but fully realize I am playing in extra innings.”
Buffett’s letters are usually limited to an annual message to shareholders, and less frequently relate to large donations of Berkshire Hathaway stocks.
Buffett is showing no signs of slowing, having spent a portion of the year traveling. This spring he visited Japan and held intense meetings with the country’s top five trading houses: Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp., and Marubeni.
Since then a stock rally has ensued across Japan, leading analysts to agree Buffett is still “at the top of his game.”
An ‘awesome responsibility’
Buffett, who has invested in the likes of Coca-Cola, McDonald’s, and more recently the Japanese trading houses, also doubled down on his well-reported beliefs about wealth and philanthropy.
Since 2006 Buffett has donated an estimated $52 billion to charitable causes, a large sum of which—$39 billion—has been donated to his friend Bill Gates’ charitable foundation.
Buffett wrote that he and his children agree that dynastic wealth is “not desirable,” adding: “Moreover, we have had many opportunities to observe that being rich does not make you either wise or evil. We also agree that capitalism—whatever its weaknesses, including the vast disparities in wealth and political influence that it delivers somewhat capriciously to its citizens—has worked wonders and continues to work wonders.”
He added that “99%-plus” of his wealth will be donated to his charitable trust, while confirming his three children—now between ages 65 and 70—are the executors of his current will.
“They were not fully prepared for this awesome responsibility in 2006, but they are now,” Buffett noted.
In the letter Buffett revealed some details of how his fortune will be handled, saying his three children must act unanimously.
“Because of the random nature of mortality, successors must always be designated,” he added. “Laws in respect to philanthropy will change from time to time, and wise trustees above ground are preferable to any strictures written by someone long gone. Whatever the rules—and rules are necessary—private philanthropy will always have an important place in America.”
Buffett’s will upon his death will be an “open book,” he added, with no “‘imaginative’ trusts or foreign entities.” Instead it is “rather simple” and will be available for public inspection at the Douglas County Courthouse.
The future of Berkshire Hathaway
It was in 1962 that Buffett’s name was first attached to Berkshire Hathaway, back then a troubled textile manufacturer operating out of Massachusetts.
Since then the business has grown to a market cap of more than $780 billion with reportedly more than 380,000 employees.
Its CEO seems confident the company will continue to thrive in his absence though admitted, like any business, mistakes will inevitably be made.
“Berkshire—one of the largest and most diversified companies in the world—will inevitably encounter human errors in judgment and behavior. These occur at all large organizations, public or private,” Buffett wrote. “But these mistakes are unlikely to be serious at Berkshire and will be acknowledged and corrected. We have the right CEO to succeed me and the right board of directors as well. Both are needed.”
He added that in the short term Berkshire’s characteristics and behaviors will be supported by Buffett’s holdings, but “before long” will become an independent entity earning “whatever reputation it then deserves.”
“Decay can occur at all types of large institutions, whether governmental, philanthropic, or profit-seeking,” Buffett wrote. “But it is not inevitable. Berkshire’s advantage is that it has been built to last.”
By Eleanor Pringle
November 22, 2023
