- Greg Abel is the heir to Warren Buffett in Berkshire Hathaway.
- Abel, 58, is the vice chairman of Non-Insurance Business Operations.
- Ajit Jain, 69, vice chairman of Insurance Operations, would succeed Abel if necessary.
- Age was a key factor in choosing Abel over Jain.
The later successor to the 90-year-old Warren Buffett as Chairman and Chief Executive Officer (CEO) of Berkshire Hathaway Inc. (BRK.A, BRK.B) will be Greg Abel, 58-year-old vice chairman of Non-Insurance Business Operations. The disclosure came not in a formal announcement by the company, but rather in a stray comment from Buffett’s longtime lieutenant, the 97-year-old vice chairman Charlie Mungerwhile Annual Meeting 2021 in Berkshire.
While discussing the strengths of Berkshires Munger remarked during the meeting, “Greg will keep the culture.” In an interview with CNBC released on Monday, May 3, 2021, Buffett stated, “Directors agree that if something happened to me tonight, Greg would take control tomorrow morning.”..
Abel’s huge challenge
Buffett hasn’t made it clear exactly when he will step down as CEO. But Buffett and the board’s decision to join Abel would eventually put him at the top of one of the world’s largest companies, a giant conglomerate that had sales of $ 245.5 billion last year, from insurance to railways to to power generation and manufacturing. The company is now valued at approximately $ 645 billion..The company outperformed the stock market for decades and its CEO Buffett has been referred to as the “Oracle of Omaha” in relation to the company’s headquarters. Abel’s biggest challenge, however, would be to improve the performance of the company, which has lagged far behind the market in recent years.
Meanwhile, Buffett also announced that 69-year-old insurance vice chairman Ajit Jain is next in line after Abel. “If anything happened to Greg tonight, it would be Ajit,” added Buffett...
“We always had a unanimous agreement” on the successor
Buffett and Berkshire have been criticized in recent years for failing to publicly announce an official succession plan, given Buffett and Munger’s advanced age. However, Buffett claims that the board always had such a plan, even if it wasn’t made public. As he told CNBC, “We always agreed in Berkshire who should take over the next day. The world is paying more attention now.”..
Importance of age
Buffett stated that age is an important consideration for the board, which resulted in the younger Abel nodding over Jain. “They’re both wonderful types. However, the likelihood of someone having a 20 year old runway makes a real difference.”..
During the 2021 annual meeting, Buffett jokingly noted that Berkshire probably has the slowest aging senior management team ever, as each year adds just over 1% to Mungers and his age. In contrast, a 25-year-old manager from another company will be 4% older in one year...
“First class person”
In 2013, Buffett called Abel “a first-class person”. Buffett continued, “There are a lot of smart people in this world, but some of them do some very stupid things. He’s a smart guy who will never do a stupid thing.”..
Long-time Berkshire shareholder James Armstrong, president of investment management firm Henry H. Armstrong Associates, said, “Greg has a wealth of regulatory and acquisition experience and a track record of managing many people. The board of directors has had plenty of time with him see in action. “..