Perhaps the biggest question Warren E. Buffett has faced for years is who should replace him as CEO of Berkshire Hathaway, the conglomerate he built into a $ 631 billion colossus over more than 50 years.
The answer has finally surfaced: Gregory Abel, the 59-year-old lieutenant who oversees Berkshire’s non-insurance business.
“Directors agree that if something happened to me tonight, Greg would take command this morning,” the 90-year-old Buffett told CNBC in an interview that aired Monday.
The approval comes at a time of new challenges for Berkshire. At the company’s annual meeting on Saturday, investors questioned the lucrative business opportunities Berkshire had missed out on during the pandemic and the company’s reluctance to share information about efforts to combat climate change and increase the diversity of its workforce.
Mr Buffett has said for several years that he and his board of directors would have considered who would take over if he resigned. Last year, for example, in his annual letter to investors, he wrote: “Berkshire shareholders needn’t worry: your company is 100 percent prepared for its departure.”
This opacity has made corporate governance experts and, increasingly, shareholders dissatisfied: BlackRock, which owns a 5 percent stake in Berkshire, announced this weekend that it was partially voting against the re-election of the head of Berkshire’s board of governance committee had “Limited Disclosure of Succession Planning.”
BlackRock declined to comment on Mr. Buffett’s disclosure on Monday.
For many, the naming of Mr. Abel as Berkshire’s heir apparently confirmed what they had already suspected.
Mr. Abel’s star rose in 2008 when he was named CEO of what was then MidAmerican Energy, an energy company that Berkshire had bought eight years earlier. Mr. Abel led a number of acquisitions that have made the division – since then renamed Berkshire Hathaway Energy – one of America’s largest utility companies.
“We have a lot of comfort in Abel,” said James Shanahan, an analyst at Edward Jones. “He has proven to be a really effective leader at Berkshire Hathaway Energy.”
Mr. Abel was named Berkshire Vice Chairman in 2018 alongside Ajit Jain, longtime head of Mr. Buffett’s extensive insurance operations. Analysts and investors widely interpreted the move as a signal that both men would one day run for chief executive to succeed Mr. Buffett.
Charles T. Munger, Mr. Buffett’s longtime business associate, hinted at the Berkshire annual general meeting on Saturday that Mr. Abel could be Berkshire’s next boss. When asked if the company could get too complex to manage, Mr. Munger replied, “Greg will keep the culture” – a job Mr. Buffett has long insisted would be important for Berkshire’s future leaders.
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