Let’s start with the Hershey Trust Company, a Pennsylvania bank created in 1905, wholly owned by Milton S. Hershey. In 1909, Mr. Hershey created his Deed of Trust. In it, among other things, he put all of his business assets into trust and made the Hershey Trust Company its trustee. It is now referred to simply as the Hershey Trust.
Included in this trust was his ownership interest in the Hershey Chocolate Company, (now called the Hershey Company), his 100% interest in Hershey Estates, (now called Hershey Entertainment and Resorts), and all of his real estate holdings, which now totals 12,000 acres.
Today, the Hershey Trust, which totals more than $12 Billion holds as assets of the Trust, has voting control of the Hershey Company, 100% of Hershey Entertainment and Resorts and all of the real estate assets. Additionally the Trust holds a portfolio of assets in stocks and bonds totaling several billion.
The Hershey Trust Company controls these assets through its voting of the shares it owns in the Hershey Company and Hershey Entertainment and Resorts. Primarily it votes on shareholder action items, the biggest of which is the election of a board of directors for both companies. As the CEO of the Hershey Trust Company, I replaced the board of directors of the Hershey Company, but we’ll devote a later blog for that subject. The management of the Hershey Trust Company largely manages the Real estate and the portfolio of stocks and bonds.
So it is through the Hershey Trust Company that these large companies remain in the Hershey Trust portfolio and cannot be sold or spun off without its approval.