Warren Buffett names Greg Abel as next CEO
Billionaire investor Warren Buffett has confirmed that the vice-chairman of his Berkshire Hathaway investment conglomerate, Greg Abel, will succeed him as chief executive. The 90-year-old’s succession plan was teased out of him – apparently by accident – by his longtime business partner, 97-year-old Charlie Munger, at the company’s annual meeting over the weekend. Buffett, speaking to CNBC in an interview broadcast on Monday, confirmed the choice.
“The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” he said.
From humble beginnings, Buffett, known to millions as the ultimate no-nonsense value investor, has amassed a $100bn fortune leading Berkshire Hathaway, a $644bn investment group. The business owns stakes in a wide range of companies, ranging from Apple to railway interests to the battery-maker Duracell and the ice-cream fast-food chain Dairy Queen.
Described as “a model of sobriety” – a tycoon who prefers Cherry Coke over champagne, and drives a midrange car with a number plate reading “thrifty” – Buffett has long been seen as a counterpoint to the unbridled wheeling and dealing of Wall Street.
Buffett is also apt to quote Munger: “Charlie says there is only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is – the first two he just added because they started with L – it’s leverage.”
Some of America’s wealthiest men, including Bill Gates, have entrusted him with dispersing their fortunes.
“He’s a fellow who’s brilliant but he needs people around him who can take care of some needs,” Andy Kilpatrick, a biographer of Buffett, told the Guardian in 2006 after Buffett married his longtime partner, Astrid Menks. “He doesn’t really do household chores, he’s got no mechanical brain. He can barely even turn on a light switch.”
Buffett has teased investors about Berkshire Hathaway’s succession plans for years. In 2012, he revealed that the board had identified the company’s next CEO and said it was someone the board knew well.
In choosing 55-year-old Abel, whose responsibilities include stakes in railway companies, utilities, manufacturers, retailers and car dealerships, Buffett said: “He does a far better job of that than I was doing previously.”
If Abel cannot do the job, he added, another vice-chairman, Ajit Jain, who oversees Berkshire’s retail and re-insurance businesses, would become CEO.
“We have a great deal of comfort with Abel as CEO and with the overall future leadership of the company. I think he has proven to be a really effective leader,” said Jim Shanahan, analyst at investment firm Edward Jones. Shanahan noted that Abel handled questions about the company’s efforts to respond to climate change at the weekend meeting.
The company has long planned to split Buffett’s job into three parts when he is gone: a CEO to oversee capital allocation and Berkshire’s operations, investment managers to handle Berkshire’s share portfolio and a separate board chairman.
Between 1965 and 2020, Berkshire returned compounded annualised gains of 20%, outperforming the S&P 500’s 10.2% gains including dividends during the period. But over the past several years, the company’s returns have fallen below the index, according to figures compiled in the Wall Street Journal.
Buffett has also fretted that Berkshire couldn’t find a big acquisition to put its nearly $145bn cash pile into. Over the weekend, he warned against the boom in SPACs – special purpose acquisition companies – calling it “a killer” that “won’t go on for ever, but it’s where the money is now and Wall Street goes where the money is”.
Buffett also remarked on what described as a “casino” stock market that, he said, millions of people have entered over the past year.
“The gambling impulse is very strong in people worldwide and occasionally it gets an enormous shove and conditions lead to this place where more people are entering the casino than are leaving every day,” Buffett said. “And it creates its own reality for a while and nobody tells you when the clock’s going to strike 12 and it all turns to pumpkins and mice.”
Microsoft co-founder Bill Gates and his wife, Melinda, announced Monday that they are parting ways after nearly three decades of marriage. “After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage,” the pair said in a statement.
Bill Gates has never been a farmer. So why did the Land Report dub him “Farmer Bill” this year? The third richest man on the planet doesn’t have a green thumb. Nor does he put in the back-breaking labor humble people do to grow our food and who get far less praise for it. That kind of hard work isn’t what made him rich.
In his annual letter to shareholders of Berkshire Hathaway (BRKB), investing guru Warren Buffett disclosed that the company took an $11 billion writedown last year on its 2016 purchase of Precision Castparts, describing it as "a mistake." The 90-year-old billionaire, Berkshire's chairman since 1970, said in the company's annual letter to shareholders that the "ugly" writedown had a simple explanation.
The already vast fortunes of America’s 643 billionaires have soared by an average of 29% since the start of the coronavirus pandemic, which has at the same time laid waste to tens of millions of jobs around the world. The richest of the superrich have benefited by $845bn , according to a report by a US progressive thinktank, the Institute for Policy Studies. The report calculated that 643 billionaires had racked up $845bn in collective wealth gains since 18 March.