For years, perhaps the biggest question Warren E. Buffett has faced is who is about to replace him as CEO of Berkshire Hathaway, the conglomerate he has built into a colossus. of 631 billion dollars over more than 50 years.
The answer has finally emerged: Gregory Abel, the 59-year-old lieutenant who oversees Berkshire’s non-insurance operations.
“The directors agree that if anything happened to me tonight, it would be Greg taking over tomorrow morning,” Buffett, 90, told CNBC in an interview that aired Monday.
The admission comes at a time of new challenges for Berkshire. At the company’s annual meeting on Saturday, Investors questioned the lucrative business opportunities Berkshire missed during the pandemic and the company’s reluctance to share information on efforts to tackle climate change and increase the diversity of its workforce.
Mr Buffett has said for several years that he and his board have been grappling with who will take over when he steps down. Last year, for example, he wrote in his annual letter to investors: “Berkshire shareholders need not worry: your company is 100% prepared” for his departure.
But this opacity has left corporate governance experts, and a growing number of shareholders, unhappy: BlackRock, which owns a 5% stake in Berkshire, revealed this weekend that it had voted against re-election from the Chairman of the Governance Committee of the Board of Directors of Berkshire in part for “Limited Disclosure of Succession Planning.”
BlackRock declined to comment on Mr. Buffett’s disclosure on Monday.
For many, Mr Abel’s appointment as alleged Berkshire heir confirmed what they had already suspected.
Mr Abel’s star began to rise in 2008 when he was appointed managing director of what was then called MidAmerican Energy, a power company Berkshire had bought eight years earlier. Mr. Abel helped lead a series of acquisitions that transformed the division – since renamed Berkshire Hathaway Energy – into one of America’s largest utility companies.
“We have a lot of comfort in Abel,” said James Shanahan, analyst at Edward Jones. “He has proven to be a really effective leader of Berkshire Hathaway Energy.”
Mr Abel was appointed vice chairman of Berkshire in 2018, alongside Ajit Jain, the longtime head of Mr Buffett’s large insurance operations. Analysts and investors have widely interpreted the move as signaling that the pair were contenders to one day succeed Mr Buffett as chief executive.
Charles T. Munger, Mr Buffett’s longtime business partner, hinted at Berkshire’s annual shareholders meeting on Saturday that Mr Abel could be Berkshire’s next chief. In response to whether the business might become too complex to run, Mr Munger said, “Greg will keep the culture” – a task Mr Buffett has long stressed would be important to the future leader of. Berkshire.