Warren Buffett says Greg Abel would change into Berkshire CEO after he is gone -CNBC By Reuters


© Reuters. Warren Buffett, CEO of Berkshire Hathaway, waits to play table tennis during Berkshire Hathaway’s annual gathering weekend in Omaha, Nebraska


From Jonathan stamp

(Reuters) – Warren Buffett put an end to years of speculation about who would succeed Berkshire Hathaway (NYSE 🙂 Inc by saying that if he resigned, Vice Chairman Greg Abel would take over as Chief Executive Officer.

“Directors agree that if something happened to me tonight, Greg would take control this morning,” Buffett said Monday, according to a CNBC report. The 90-year-old Buffett never gave a schedule for his departure.

Abel, 58, has been responsible for Berkshire’s non-insurance business since 2018 after growing his Berkshire Hathaway Energy unit into a major US utility company.

Many analysts and investors had viewed the Edmonton, Alberta native as Buffett’s most likely successor and advocated upholding Berkshire’s corporate culture.

“Simple, low-key, very knowledgeable, but humble and serious at the same time,” said Steve Haberstroh, partner at CastleKeep Investment Advisors in Westport, Connecticut.

Ajit Jain, 69, vice chairman of the Berkshire insurance business, was another CEO candidate, but Buffett told CNBC that Abel’s relative youth “makes a real difference”.

Buffett’s hand may have been forced after vice chairman Charlie Munger, 97, held a discussion at Berkshire’s May 1 annual meeting about Berkshire’s decentralized business model that “Greg will keep the culture.” He didn’t mention Jain.

“I suspect Buffett was reluctant to disclose this,” although “Abel’s coronation isn’t exactly a surprise,” said Jim Shanahan, an analyst at Edward Jones & Co.

Buffett has grown Berkshire, based in Omaha, Nebraska, into a $ 628 billion empire since 1965 with dozens of companies including Geico Auto Insurance, BNSF Railroad, Dairy Queen Ice Cream, and See’s Candies.

Stocks are doing well in 2021 but have been lagging behind over the past decade, reflecting Berkshire’s size and Buffett’s struggle to provide his now $ 145.4 billion stash of cash.

Succession has been a key issue since 2006, when the then 75-year-old Buffett discussed it in his annual letter to shareholders.

Buffett’s eldest son Howard is expected to become the non-executive chairman, while investment managers Todd Combs and Ted Weschler will be named chief investment officer.

NEVER a stupid thing

While Abel lacked Buffett’s charisma and showmanship, he gained Buffett’s confidence for his commitment to Berkshire’s culture, long-term thinking, and ability to spend wisely.

“Greg has a long history of dealing with regulators and acquisitions, as well as many years of managing many employees,” said long-time Berkshire shareholder James Armstrong, president of Henry H. Armstrong Associates in Pittsburgh.

Buffett called Abel “a first class person” in a 2013 video message.

“There are a lot of bright people in this world, but some of them do some very stupid things,” Buffett said. “He’s a smart guy who will never do anything stupid.”

A lifelong hockey fan, Abel graduated from the University of Alberta in 1984.

He worked at PricewaterhouseCoopers and energy company CalEnergy before joining Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, which Berkshire acquired in 2000.

Abel became head of MidAmerican in 2008, replacing David Sokol, whom many investors believed would replace Buffett, and given a broader role.

Sokol resigned in 2011 after Berkshire learned he had invested in Lubrizol while successfully persuading Buffett to buy the chemical company. The regulators have not taken any action.

Berkshire Hathaway Energy benefited from its ability, unusual in the utility industry, to hold onto profits rather than pay dividends.

This allowed Abel to buy Nevada utility company NV Energy and Alberta power transmission company AltaLink while expanding into renewable energy. The unit also controls one of the largest residential real estate agents in the United States.

Despite appearances, Abel dropped his hair in public.

In 2014 he accepted the Ice Bucket Challenge to raise awareness of amyotrophic lateral sclerosis or Lou Gehrig’s disease. Abel pointed two thumbs at a camera as he was soaked in water.

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