Buffett’s pledge to give away 99% of his wealth could later test Berkshire
The carefully choreographed plan Warren Buffett has laid out for his fortune could eventually expose Berkshire Hathaway to a risk it has avoided for six decades: shareholder activism. In Buffett’s Giving Pledge letter in 2010, the “Oracle of Omaha” said the proceeds from 99% of his Berkshire shares will be spent on philanthropy within 10 years after his estate is settled. It marks a timeline that implies a gradual unwinding of the voting control that has long insulated the conglomerate from outside pressure. The issue came into the spotlight after Buffett’s son Howard, who is tasked with distributing the wealth along with his siblings, acknowledged the challenge of balancing his father’s wish to see the money allocated relatively quickly with the loss of control over Berkshire’s voting shares. “The biggest challenge will be … that he wants to see this money spent in 10 years more or less and then balancing that with how you lose control over Berkshire voting shares,” he said in a special interview with Becky Quick aired this week. ( CNBC’s “Warren Buffett: A Life and Legacy” can be viewed on demand here. ) Lifelong desire While the approach reflects Buffett’s lifelong desire to address social needs, investors and analysts say it also raises longer-term questions about how Berkshire will be governed once his influence — and that of his heirs — is diluted. “I believe that as the voting power among Buffett and his heirs becomes diluted, the risk of activism increases,” said Cathy Seifert, an analyst at CFRA. “My sense at this juncture is that there is a growing chorus of investors who will likely start pressing Greg Abel for a more specific capital allocation strategy considering Berkshire’s growing cash hoard, lack of a cash dividend and of any meaningful buybacks.” Berkshire’s ability to repurchase its own shares could partially offset the impact on voting control of estate-related selling. Buybacks would reduce the public float and concentrate ownership among remaining shareholders, potentially slowing the erosion of control even as Buffett’s stake is monetized for philanthropic purposes. The Omaha-based conglomerate is awash in cash, swimming in a record $381.6 billion at the end of the third quarter. Buffett was willing to pull off an elephant-sized deal at the end of his tenure as Berkshire CEO, but found no opportunities large enough to move the needle at prices he considered sensible. Multibillion fortune Buffett owned about $148 billion of Berkshire stock at the end of 2025, far and away the largest shareholder. Most of his wealth is in the original Class A shares, which today change hands at $740,750 each. The 95-year-old sage laid out a plan in November to “step up” the pace at which he gives away his estate to his children’s foundations, citing their own ages. He stressed that he would like to keep a “significant amount” of A shares until shareholders grow comfortable with new CEO Greg Abel. Bill Stone, chief investment officer at Glenview Trust and a Berkshire shareholder, said the gradual dilution of voting power would in the long run usher Berkshire into a more conventional era of shareholder accountability. “The voting shares get low enough that technically, it’ll become more like every other company,” Stone said. Buffett “wanted to make sure there was enough voting support for Abel at the beginning so that he earned the trust of shareholders, and then hopefully it would just move on smoothly from there.” Distant concern Activist pressure could remain a distant concern as long as Buffett remains chairman. Berkshire is unlikely to be receptive to activism while Buffett is still in place, said Meyer Shields, a property and casualty insurance analyst at Keefe, Bruyette & Woods, citing his vocal opposition to breakups and the loyalty he commands among shareholders. That dynamic is likely to change over the longer term, said Shields. “Over the long-term (subject to valuation, of course), I’m sure someone somewhere will push for a break-up, or at least the divestiture/spin-off of a few key assets to unlock value,” Shields said. “I doubt it will be soon, but part of giving away the stock is giving away the voting rights.” Stone said that chance is part of a healthy transition. “If Abel does poorly, you’d want that,” he said. “You want the ability to pressure some sort of change.” Stone added that he does not expect such a scenario to materialize. Difficult Target Buffett himself has long argued that Berkshire’s size makes it a difficult target for activists. “The market value of Berkshire is going to be so great that, even if all the activists got together, they couldn’t do much about it,” Buffett said at the shareholder meeting in 2015. With Berkshire’s market capitalization now exceeding $1 trillion, the scale itself presents a powerful deterrent. BRK.A YTD mountain Berkshire Class A shares closed Friday above $740,000 each.
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