Warren Buffett’s Secret Successor
Berkshire Hathaway’s (NYSE:BRK.A) Chief Executive Officer Warren Buffett continues to assure investors that despite his recently diagnosed Stage 1 prostate cancer, his company’s CEO succession plans will not change. According to CNBC, both Buffett and his doctors are confident that the cancer is not life-threatening and treatable.
However, investors have wondered for years now who Buffett’s successor will be and the news has brought the succession issue back into the spotlight. The mogul is keeping quiet like always but offering a few hints. Well, not really hints. More like necessary criteria that few people meet.
The Atlantic Wire reports that according to Buffett, Berkshire Hathaway’s board is “solidly in agreement” on a successor. Buffett said, “The key is preserving a culture and having a successor, a CEO that will have more brains, more energy, more passion for it than even I have.” The company’s operating income climbed 32 percent last year. The fear among investors is that a botched CEO changeover could send the company’s stock price down…
Buffett said recently, “The person who’s going to become CEO of Berkshire is probably a CEO of some operation within Berkshire Hathaway.” That greatly narrows down the list of eligible candidates. CNBC‘s leading candidate is Greg Abel — chairman and chief executive officer of MidAmerican Energy, a Berkshire company. Abel has been CEO of MidAmerican since 2008 and receives praise in Buffett’s annual letters to shareholders. Another member of the short list is Ajit Jain — Buffett’s head of insurance. Tony Nicely — president, CEO and treasurer of GEICO — is another possible candidate. All these of these men are regularly praised by Buffett and have been with the company long enough to meet Buffett’s criteria of preserving Berkshire Hathaway’s corporate culture.
Berkshire Hathaway has had the same person in mind to take over for Buffett for at least the past five years, according to Buffett in an interview with CNBC in February. Matthew Rose, Todd Combs and Ted Weschler are also considered front-runners. No one outside of Buffett and the Berkshire Hathaway board know who will become the company’s next CEO but rest assured, if Buffett is half as good at picking a successor as he is at picking stocks, the company will be in good hands.