OMAHA, Neb. (AP) — Warren Buffett said Saturday that his designated successor, Greg Abel, will have the final say Berkshire Hathaways Investment decisions when the Oracle of Omaha is no longer at the helm.
“I would leave capital allocation to Greg, and he understands business very well,” Buffett told a hall full of shareholders at Berkshire’s annual meeting. “If you understand corporations, you understand common stocks.”
Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger accidentally made the revelation at the shareholder meeting. Abel has overseen much of Berkshire’s sprawling empire, including energy, railways and retail.
Buffett offered the clearest glimpse yet into his succession plan after years of speculation about the exact roles of Berkshire’s top executives following the eventual transition. The investment icon, who turns 94 in August, said his decision would be influenced by how much Berkshire’s fortunes had grown.
“I used to think differently about how this should be handled, but I think the responsibility should be on the CEO and whatever that CEO decides can be helpful,” Buffett said. “The sums have become so large at Berkshire and we don’t want to try to have 200 people around us each managing a billion. This just doesn’t work.”
Berkshire’s cash holdings rose to nearly $189 billion at the end of March, while its gigantic stock portfolio includes stocks worth a whopping $362 billion based on current market prices.
“I think when you deal with the amounts that we’re going to have, you have to think very strategically about how you do very big things,” Buffett added. “I think the responsibility should lie entirely with Greg.”
Although Buffett made it clear that Abel would take over as CEO, there were still questions about who would control the public stock portfolio at Berkshire, where Buffett has built a large following through investments such as: B. has generated enormous returns Coke And Apple.
Berkshire investment managers Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of the stock portfolio (about 10%) over the last decade. There has been speculation that they could take over this part of Berkshire’s CEO role if he is no longer able to do so.
However, based on Buffett’s recent comments, it appears that Abel will make the final decisions on all capital allocation – including stock selection.
“I think the CEO should be someone who can weigh buying companies, buying stocks, all sorts of things that might come up at a time when no one else is willing to do anything,” Buffett said.
Abel is known for his strong expertise in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Abel became the company’s CEO in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
Correction: Berkshire’s stock portfolio is worth $362 billion. The number was incorrect in an earlier version.
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2024-05-04 19:06:09
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