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Berkshire Hathaway Vice Chairman Ajit Jain sold $139 million of Berkshire stock on Monday, reducing his ownership in the company by more than 50%, a sale that could be viewed negatively by investors.
Jain, a Berkshire vice chairman and head of the company’s large insurance operations, sold 200 Berkshire Class A shares at an average price of $695,418 on Monday, according to a Form 4 filing with the Securities and Exchange Commission late Wednesday.
Jain sold the Berkshire stock near the recent peak of around $725,000 per class A share.
Jain had one of the largest Berkshire holdings among the company’s directors and executives. He now holds 61 Class A shares directly and another 55 A shares through trusts established by himself and his spouse for their descendants, for a total of 116 shares, according to the filing. The nonprofit Jain Foundation holds another 50 Class A shares.
The Indian-born Jain, who turns 73 on Sept. 15, has been a critical figure in Berkshire’s insurance operations for nearly 40 years. He is probably the Berkshire employee closest to CEO Warren Buffett, who has regularly praised Jain in his annual shareholder letters and at the Berkshire annual meeting.
“If you meet Ajit at the annual meeting, bow deeply,” Buffett wrote in his 2012 annual shareholder letter.
Jain is a brilliant insurance underwriter who has been responsible for billions of dollars of profits for Berkshire by accurately assessing the risk of big-ticket events including catastrophes like hurricanes. Jain has benefited from Berkshire’s deep pockets and Buffett’s willingness to take big insurance risks if the premiums are sufficient.
Jain was responsible for what could have been a profit of over $1 billion last year for Berkshire when the company took on about $15 billion of potential exposure for Florida hurricanes and profited from a light storm season.
Jain was promoted to a Berkshire vice chairman and head of overall insurance operations in 2018. He joined the Berkshire board at the time.
He is well paid, earning $20 million last year in total compensation and $19 million in each of the prior two years. It’s believed that Jain purchased his entire Berkshire stake with his own money since the company does not give out stock compensation to any employees—reflecting Buffett’s philosophy that employees should be paid in cash and that every Berkshire share is precious.
Barron’s wrote recently that the stock looked pricey when the A shares topped $720,000. They have declined since then and were off 1.2% Wednesday to $680,040, and are down another 2.6% in after-hours trading.
The sale could be viewed negatively by investors given its size and the timing with Berkshire stock having recently passed $1 trillion in market value and near a record high. Jain sold the stock at almost exactly a $1 trillion market value.
That could be good timing.
Write to Andrew Bary at andrew.bary@barrons.com
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