Thread

Warren Buffett Steps Down as Berkshire Chairman, Names Son to Replace Him

323 points · 221 comments · saimiam

dugmartin · 1789732295 · focus · HN ↗
I guess Warren’s quote only applies to other people, not him. "It’s like choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics." (<a href="https://www.nytimes.com/2001/02/14/us/dozens-of-rich-americans-join-in-fight-to-retain-the-estate-tax.html" rel="nofollow">https://www.nytimes.com/2001/02/14/us/dozens-of-rich-america...)
1. nlitened · 1789734152 · focus · HN ↗
  As I understand, the son is there not to lead the company (Greg Abel is the CEO), but to oversee their family's share in the enterprise.
  1. yuuu · 1789734967 · focus · HN ↗
    I thought he was giving away 99% of his wealth?
    sarjann · 1789735944 · focus · HN ↗
    Probably in a charitable trust that will be managed by the family. With the trust owning the shares.
    nostrademons · 1789744140 · focus · HN ↗
    He was giving it to the Gates Foundation for Bill & Melinda Gates to manage, but that deal went into limbo when Bill showed up in the Epstein files and Melinda divorced him.
    csdreamer7 · 1789744709 · focus · HN ↗
    The money he is giving away is going to foundations managed by his children (last I read).
    bluGill · 1789745950 · focus · HN ↗
    Though unlikely the case here, family foundations should always be looked at as a likely source of corruption.
    You cannot bribe me directly - that would be caught. However you can donate money to my family foundation and my kids (or spouse) will draw a large salary from it while doing almost nothing and they do some good for the world so it looks like a charity. Of course the kids/spouse will support me in various ways that all rich kids will.
    Again, probably not what is happening here, but every time you hear of a family foundation you should ask who they are using it to corruption in some form. Even when it doesn't seem to be you should still look.
    aetherson · 1789748656 · focus · HN ↗
    Even very large salaries are probably not a very significant amount of wealth for these people. I think this is a case where "all large numbers look the same."
    If Warren just directly gave his money to his three children equally, and paid 40% inheritance tax on that money, and then the children each just used 1% of that wealth per year, then they'd each get:
    144000000000 * 0.6 / 3 / 100 = $288 million each year.
    No foundation pays its CEO 10% of that much money. I think we may have to accept that in fact this is a way to give money to charitable causes, not just horde it.
    paleotrope · 1789755360 · focus · HN ↗
    I wonder if they could even unwind the fortune to pay 40% in cash.
    aetherson · 1789827506 · focus · HN ↗
    I believe they wouldn't have to because of the stepped-up-basis, but my point is that even if somehow they were paying the full 40%, it's still an inconceivably large amount of money.

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