8-KOther EventsExhibits & Filings

BERKSHIRE HATHAWAY INC 8-K Report, Corporate Update (Jun 27, 2006)

Filed June 27, 2006For Securities:BRK-BBRK-A

Summary

This 8-K filing from Berkshire Hathaway Inc. reports on irrevocable pledges made by CEO Warren E. Buffett on June 26, 2006, to donate Berkshire Hathaway Class B Common Stock annually throughout his lifetime to various charitable foundations. The most significant pledge is to the Bill and Melinda Gates Foundation, which will receive 10,000,000 Class B shares (equivalent to 401,666 Class A shares). A total of 12,050,000 Class B shares are earmarked for contribution to the Gates Foundation and the private foundations of Mr. Buffett's three children. This event, announced via Fortune magazine, has implications for the long-term distribution of Berkshire Hathaway's stock and its charitable impact. These pledges represent a substantial commitment of Berkshire Hathaway's stock and highlight Mr. Buffett's ongoing philanthropic endeavors. Investors should note the conditions attached to the gifts, particularly for the Gates Foundation, which include the continued activity of Bill and Melinda Gates and the foundation's adherence to a minimum annual spending rate. Importantly, Mr. Buffett also affirmed in a related Schedule 13D filing that he has no current plans to step down from his roles as Chairman and CEO. This filing provides transparency regarding a significant charitable distribution plan that will unfold over time.

Key Highlights

  • 1Warren E. Buffett made irrevocable pledges on June 26, 2006, to donate Berkshire Hathaway Class B stock annually throughout his lifetime to charitable foundations.
  • 2The Bill and Melinda Gates Foundation is the primary beneficiary, earmarked to receive 10,000,000 Class B shares.
  • 3A total of 12,050,000 Class B shares are committed to the Gates Foundation and the private foundations of Mr. Buffett's three children.
  • 4The pledge to the Gates Foundation is contingent on Bill or Melinda Gates remaining active in its administration and the foundation maintaining a minimum annual spending rate.
  • 5Mr. Buffett retains voting power over the pledged shares until they are contributed to the foundations.
  • 6The pledges were announced through an article in Fortune magazine on June 25, 2006.
  • 7In a concurrent filing (Amendment to Schedule 13D), Mr. Buffett stated he has no current plans to step down as Chairman and CEO.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report on irrevocable pledges made by Berkshire Hathaway CEO Warren E. Buffett to donate a significant amount of Class B Common Stock annually throughout his lifetime to several charitable foundations, most notably the Bill and Melinda Gates Foundation.

A total of 12,050,000 shares of Class B Common Stock are earmarked for contribution. The primary beneficiary is the Bill and Melinda Gates Foundation, which is designated to receive 10,000,000 of these shares. The remaining shares will go to the private foundations of Mr. Buffett's three children.

Yes, there are conditions. For the Gates Foundation pledge, it requires at least one of Bill Gates or Melinda French Gates to remain active in the foundation's policy-setting and administration. It also requires the annual gift to be fully additive to the foundation's annual spending, with a two-year ramp-up period. Pledges to the children's foundations are contingent on the children remaining alive and active in their respective foundations' activities. All pledges also require the foundations to continue meeting legal requirements for charitable qualification.

No, quite the opposite. In a related filing (Amendment to Schedule 13D) referenced in this 8-K, Warren Buffett explicitly stated that he has no plan or desire to step down from his position as Chairman and Chief Executive Officer of Berkshire Hathaway.