1997: Would Berkshire split its stock if the capital gains tax was cut?
AUDIENCE MEMBER: My name is Bill Turan (PH). I’m from Des Moines, Iowa, and I’m a stockholder.
It would appear that there’s going to be a capital gains tax cut. If it does materialize, would you consider a stock split? (Buffett laughs)
Secondly, is there an extra copy of your annual report available on the premises?
WARREN BUFFETT: My guess is we’ll get you an annual report. In fact, if someone could take it up to zone 10, we’ll be glad to get it to you.
I don’t think — well, I’ll put it this way. If they cut the capital gains tax to zero, we’ll maybe — (Laughter)
I don’t think I’d get Charlie’s vote though, anyway. No, we will not be splitting Berkshire stock. (Applause)
Incidentally, we do not consider splitting the stock a pro-shareholder move. If we did, we’d do it.
We think that net, to take the entire experience, it’s worked out well for shareholders, and we think we have a more investor-oriented — or investment-oriented — audience in this room today than we would have had if we’d split many times.
It is a way of enticing certain types of investors, and perhaps discouraging others. And so it’s worked well.
But I will say this, too. We got pushed into, in effect, issuing the Class B shares last year. Wasn’t our — wouldn’t have been something we would have done, except for the possible formation of the unit trust. And I would say that’s worked out very well from our standpoint. So we’re happy that it happened, and we’re happy that the Class B shareholders have joined us. And we now have something that’s denominated, you know, at a much lower level.
And there have been no bad effects whatsoever from having the Class B out there. So anybody owns the A stock and wants to split, you can split 30-for-1 this afternoon. I mean, how many other companies give you that chance?
Charlie?
CHARLIE MUNGER: I think what he’s trying to tell you is that you’ve had your stock split. (Laughter)