A Legacy of Hospitality, Charity and More
When hotel magnate Barron Hilton died September 19, 2019 at age 91, the lead story was his pledge to follow his father’s example by giving 97 percent of his wealth to the humanitarian work of the Conrad N. Hilton Foundation. In round numbers, Barron’s $3 billion gift was projected to increase the foundation’s endowment to over $6 billion. The foundation’s mission is to relieve the suffering, the distressed, and the destitute. That’s a big way to spell relief! The legacy of this remarkable family is worth reviewing.
Conrad Hilton was born in 1887, served in the first New Mexico State Legislature in 1912, served in the US Army during World War I, then became a banker. In 1919, he tried to buy a Texas bank, but when that deal fell through he bought his first hotel in Cisco, Texas. He kept buying and building hotels. He did well enough to establish the Conrad N. Hilton Foundation in 1944 as a family charitable foundation. He formed Hilton Hotels Corporation in 1946 and eventually owned 188 hotels in 38 U.S. cities and 54 hotels in other countries. Conrad was married 3 times and had 4 children. In 1966 at age 79 Conrad retired, and his son Barron became president, CEO and chairman of Hilton Hotels.
When Conrad died in 1979 at age 91, he left 97% of his estate (including 13.5 million shares of Hilton Hotels stock) to the family foundation. Conrad signed more than 30 different wills in his lifetime, consistently reducing the amount left to his children and grandchildren. His last will was not perfect. The problem: Conrad owned 27.4% of Hilton Hotels; federal tax law allowed a private foundation to own no more than 20% of a public corporation. However, in the will Barron was given the right to purchase the excess shares. Instead, Barron wanted to buy all 13.5 million shares for $139 million. Based on the corporation’s valuation of its assets, the stock was worth $780 million. Barron and the foundation board disagreed on the interpretation of the will terms and the valuation of the hotel stock. They litigated for ten years before reaching a settlement. As a result, Conrad’s hotel stock was divided among Barron, the foundation and Barron’s charitable remainder unitrust. Barron paid nothing for the 4 million shares he received.
Barron Hilton was born in 1927, learned to fly when he was 17, served in the US Navy during World War II, then became an entrepreneur in citrus products, oil, and aircraft leasing. He joined Hilton Hotels in 1954 as vice president. Also, Barron was founding owner of the AFL’s Los Angeles Chargers, now the San Diego Chargers. He paid a $25,000 franchise fee to form the team in 1959. As a condition to becoming president and CEO of Hilton Hotels, Barron relinquished his football responsibilities and sold his majority interest in the Chargers in 1966 for $10 million. Barron was married for 57 years to wife Marilyn until her death; they had eight children and fifteen grandchildren. Barron retired from Hilton Hotels in 1996 at age 69. Hilton Hotels and Harrah’s Entertainment were sold to private equity firms in 2006 and 2007. His son, Steven, served as president and CEO of the foundation until retiring in 2015 at age 65. Steven is chairman of the foundation board, where he serves with 5 other Hilton descendants and a number of independent directors.
Upon Barron’s death the Hilton family fortune built by his father returned to the foundation, together with the fortune Barron accumulated on his own. What about the remaining 3% of Barron’s estate? His children, grandchildren (including Paris and Nicky) and great-grandchildren will enjoy sharing $90 million.
~ Randy Hooper